UP economists push key lockdown measures
MANILA, Philippines — Deliver food and other basic goods, rather than cash, right at the doorstep of households. gradually and selectively lift lockdown measures once the healthcare system has been adequately provisioned. Harness the Bangko Sentral ng Pilipinas (BSP) as the “lender of last resort” in funding the war against the new coronavirus disease (COVID-19).
These are some of the actions a group of University of the Philippines (UP) economists proposed in a discussion paper, titled “Surviving the Lockdown and Beyond” dated April 2020, amid the quarantine of Luzon, which accounts for over 70 percent of the country’s economic output, and other areas in the country.
‘No one goes hungry’
The paper was written by UP economists Toby Monsod, Orville Jose Solon, Maria Socorro Gochoco-Bautista, Emmanuel de Dios, Joseph Capuno, Ma. Joy Abrenica, Agustin Arcenas, Ma. Christina Epetia, Laarni Escresa, Karl Jandoc, Aleli Kraft, Cielo Magno, and Renato Reside Jr.
“We must ensure that no one goes hungry,” the economists said, urging local government units (LGUs) to take the lead in targeting and distributing basic goods while the national government manages supply chains and bulk procurement.
This means allocating resources to and targeting barangays rather than individual households, the paper said, and temporarily shelve cash transfers in favor of in-kind transfers of food and other basic goods, like medicine, cooking and cleaning supplies.
“Under normal circumstances, cash transfers would be better than transfers of specific goods, since they give the consumer a choice over the types and amounts of goods to buy. But in-kind transfers are superior to cash transfers when there are supply constraints (physical barriers to delivery, severe shortages) for relevant goods,” the paper said.
“Transfers in kind are especially recommended under mandatory home quarantine conditions; having thousands venture out to queue at ATM (automated teller machines) or scrambling in markets defeats the purpose of social distancing.”
“LGUs have the most at stake in terms of managing the quarantine and ensuring social peace, and have unique knowledge of constituents and neighborhoods … LGUs also know the extent of their own logistical capacities,” the paper said.
Gradual lockdown lifting
The economists also said a gradual lifting of the lockdown would be the more prudent approach and would provide more time to equip the health system with the necessary infrastructure and staff which requires the smooth flow of funds.
“To this end, there must be a shift away from prepandemic procurement regulations to allow for exigencies as needed under emergencies of this magnitude,” the paper said.
“The unprecedented scale of the problems in health, work, and incomes created by the pandemic also dictate that the government’s macroeconomic tools must themselves set unconventional goals and be used in unconventional ways,” the paper read.
“In our view, the central bank’s ability to act as a ‘lender of last resort’ is a crucial role it must take on precisely during a crisis … in order to reduce risk and uncertainty,” the economists.
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