The face of the nation, our economy, is our people, our workers

By: Fernando Fajardo - Columnist/CDN Digital | April 22,2020 - 07:00 AM

It is not banks, money, GDP (gross domestic product), or anything that makes up our nation or the economy; it is our people, our workers. Therefore, until the people or our workers are still being locked-up at home away from work, the nation and the economy will continue to sink.

What we need immediately, therefore, is not a multi-trillion peso stimulation fund but life jackets to save our people, our workers, from drowning to death from COVID-19 (coronavirus disease 2019) and to put this deadly virus from China to death itself. 

I am not saying that we should lift the lockdown immediately and totally, far from it. What I am saying is that even with an extended or modified lockdown, we should also greatly enhance our efforts to find the infected individuals, trace the source and their subsequent contacts, and isolate them away from everyone and treat the sick ones.

Most of all, we must be sure that all those locked-up at home are provided with basic necessities to survive or they will go out on their own in order to find their means for survival to avoid hunger or death from hunger. Less than that, we risk prolonging our sufferings. No amount of fiscal or monetary stimulation will work to refloat our sinking economy that is devoid of workers, supplies, and demand.

Unless we reach the point, in which the number of those who recovered daily exceeds those newly infected daily, the curve will not be flattened, and that we are still not safe. And as long we continue the lockdown in order to be safe from COVID-19, the economy will continue to sink. 

When made to report on the economy by the President during his second “midnight chat’ with the nation on the implementation of the Bayanihan to Heal as One Act, Finance Secretary Carlos Dominguez stated that before the coming of COVID-19 and the ensuing lockdown, the GDP growth averaged 6.4 percent annually from 2016 to 2019. With COVID-19, his estimate is that the GDP is expected to grow only by minus one to zero percent, adding that consequently temporary unemployment would reach up to 1.2 million workers.

The fact is that a one and a half month of total lockdown of the economy from the middle of March up to the end of this month will cause the economy to lose an equivalent of 12.5 percent of the GDP or 6.25 percent if half of the economy is allowed to function, which is what I think is actually happening now with the enhanced community quarantine.

Therefore, unless everything returns to normal beginning next month, it is impossible that the economy will only experience minus one percent or zero growth for the whole year especially in light of the global economy that is also suffering from what the IMF describes as the Great 2020 Lockdown.

With the fall in the GDP also goes the fall in employment. The proof of this was just given by Labor Secretary Silvestre Bello last week when he said that as of April 13, we have recorded the displacement of 1,428,841 workers as reported by 52,993 establishments. More than one million of those were due to temporary closures while the rest were affected by various flexible work arrangements. This, according to Secretary Bello, is not even counting yet the affected workers in the informal sector of the economy that are themselves counted by the hundreds of thousands or millions.

If I may add, the report of Secretary Bello from the formal sector is not even complete yet given that in 2018 alone, the Philippine Statistics Authority (PSA) recorded a total of 1,003,111 business enterprises in the country, of which 998,342 (99.52 percent) were MSMEs and 4,769 (0.48 percent) were large enterprises. The MSMEs group consisted of 887,272 micro enterprises, 106,175 small enterprises, and 4,895 medium enterprises.

The Philippines Statistics Authority classifies an enterprise as a micro enterprise if it has less than 10 employees, small if it has 10-99 employees, medium with 100-199 employees, and large if it has 200 or more employees.

In 2018, all the listed business establishments employed 9,043,063 workers, divided into 5,714,262 (63.19 percent) in MSME and 3,328,801 (36.81 percent) in large enterprises. Among the MSMEs, micro enterprises produced the biggest share (28.86 percent), closely followed by small enterprises (27.04 percent) while medium enterprises were far behind at 7.29 percent.

In all in 2018, the total labor force of the country was measured at 43,445 million, with 94.7 percent or 41,143 million employed and 2.302 or 5.3 percent unemployed. Last year, the total labor force increased to 44,706 million of which 42.427 million or 94.9 percent were employed and 2.279 or 5.1 percent unemployed. What these numbers will be this year is hard to know given that we are not even sure yet how long the lockdown in any form will be with us./dbs

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TAGS: COVID-19, Dominguez, GDP, Great 2020 Lockdown, lockdown, workers

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