"The global economy is not out of the woods yet."
The global economic recovery could have been just a matter of time. Financial markets across the globe had sensed it—the Dow Jones in the US was registering new highs and oil prices were surging past $60 per barrel in anticipation of increased demand and the worldwide rollout of vaccines.
But the global economy, it turned out, is not out of the woods yet. A resurgent COVID-19 and the slow vaccine rollout in Europe have prompted Germany and France to introduce new lockdown measures that threaten to stall economic recovery in the continent and elsewhere in the world.
Here in the Philippines, the new COVID-19 spike is certain to derail the economic recovery effort, with some analysts saying the rebound has been pushed back to the fourth quarter of 2021.
The resumption of stricter lockdown measures in Metro Manila and some provinces surrounding it will further weaken the fragile Philippine economy. Consumer confidence is taking another beating while the ranks of the unemployed are certain to increase with the restrictions on dine-in and other mall activities.
The slow vaccine rollout and the inadequate supply doses, as well as the daily spike in COVID-19 cases, have combined to push back Philippine economic recovery. The economy is expected to contract again in the first quarter of the year as a result of a regional bubble centered in Metro Manila and the industrial provinces of Cavite, Laguna, Rizal and Bulacan. These provinces and the capital region account for about two-thirds of the country’s gross domestic product.
The country’s policy makers and health authorities by now realize that a blanket community quarantine is no longer an option. Past measures only restricted economic activities and did not succeed in containing the virus spread.
Local government units, meanwhile, have failed miserably in their contract tracing activities and in implementing social distancing and targeted lockdowns. Many restaurants and bars in Metro Manila, for instance, did not limit the number of their diners and customers, and were lax in implementing basic health protocols.
The Philippine economy will ultimately recover. But without health discipline and the enforcement of strict rules, the road to recovery could be long and bumpy.
