The National Economic and Development Authority has said the total cost of the COVID-19 pandemic and the implementation of the community quarantines is estimated at P41.4 trillion in the next four decades.
This is according to a presentation made last week by Socioeconomic Planning Secretary Karl Kendrick Chua, with the cost being in terms of net present value at P4.3 trillion in 2020 alone, and P37.0 trillion in the next 10 to 40 years.
Sources of losses over the next 40 years include foregone wages from premature deaths, lost productivity due to COVID-19 and non-COVID-19 illnesses, and medical expenses.
The NEDA estimates considered lower consumption and investment in the next decade due to weak demand in sectors where social distancing is mandated, such as amusement, tourism, restaurants, and public transportation.
These will in turn drag tax revenues lower, with the economy expected to converge to the pre-pandemic growth path only after 10 years.
“Foregone consumption and investments in 2020 will result in lower capital accumulation in the future,” Chua said in the presentation.
In terms of foregone tax revenues, NEDA estimates P782 billion lost in 2020 — P271 billion in value-added tax, P144 billion in corporate income tax, P86 billion in personal income tax, and P282 in all other taxes.
This is projected to worsen in the next 10 years, with total foregone tax revenues pegged at P1.206 trillion — P409 billion in value-added tax, P286 billion in corporate income tax, P229 billion in personal income tax, and P282 billion in all other taxes.
“Lower capital accumulation will result in lower financial returns and lower economic benefits for the people,” Chua said.