GDP loss in Covid-19 mass transmission higher than lockdown

A lawmaker on Tuesday said a mass transmission of the coronavirus disease could cost the Philippine economy up to 4.13 percent of the gross domestic product (GDP), which is significantly higher than the economic cost of a Luzon-wide quarantine.

In an aide-memoire submitted to the House leadership, Albay Rep. Joey Salceda said the estimated GDP loss of a lockdown is at 2.95 percent.

“Limiting economic activity in Luzon would result in significant losses for the economy. Nonetheless, a mass transmission would cost the economy even more significantly; above all, the state would be remiss in its moral obligation to protect its citizens,” Salceda said, noting that Luzon accounts for around 71.9 percent of the country’s GDP.

He said the lockdown in Luzon would also lead to job losses, as well as revenue losses for local and national governments.

He cited that seasonal job losses, which come primarily from the informal sector, are estimated at 251,000, while losses on structural jobs will be at 85,000.

“This emphasizes that interventions will have to be broad-based and not wage-based, as the latter will only assist those who earn from formalized establishments,” he said.

In terms of government revenues, the estimated total losses of national internal revenue taxes and local business taxes are expected to reach PHP68 billion.

On Monday night, President Rodrigo Duterte announced that an enhanced community quarantine will be implemented in the whole of Luzon until April 12.

Placing Luzon under quarantine compels over 53 million people residing in Luzon to follow “strict” home quarantine and limit their movement to accessing basic necessities.

The provision for food and essential health services is regulated, and the presence of uniformed personnel is heightened during the month-long enhanced community quarantine in Luzon.

Source: Philippines News Agency