Alert Level 1 will benefit 62% of Philippine economy – Neda chief

MANILA, Philippines — Eased restrictions under Alert Level 1 since Tuesday will benefit more than three-fifths of the economy and restore millions of jobs lost to the COVID-19 pandemic, but the country’s chief economist said much more economic output would be regained once in-person classes are in full swing.

Socioeconomic Planning Secretary Karl Chua told a Palace press briefing on Tuesday that the least stringent alert level now in place in Metro Manila and 38 other areas covered 62 percent of the economy, where 48 percent of the country’s workforce or 20.3 million would benefit from eased restrictions.

The rest of the country under Alert Level 2 accounts for 38 percent of gross domestic product (GDP) but had the bigger 52-percent share of workers nationwide, equivalent to 21.7 million Filipinos, said Chua, who heads the National Economic and Development Authority (Neda).

Citing Neda estimates, Chua said areas under Alert Level 1 will add P9.4 billion in gross value-added or output per week, of which P3 billion will be for workers’ salaries. As such, Chua said there will be about 170,000 fewer jobless Filipinos over the next quarter.

Chua said that if the entire Philippines moved to the lowest alert level, a bigger P16.5 billion in economic activity a week, of which P5.2-billion worth would be workers’ pay, would likely slash unemployment by a larger 297,000 in the next three months.

Tourism to benefit most

“We hope that next week, the entire country will be under Alert Level 1. We can do that if we cooperate and follow the minimum health standards,” Chua said.

The Neda chief said tourism would benefit the most from Alert Level 1 — P750 billion, or half of the P1.5 trillion shed by the sector in 2020 at the height of the most stringent lockdowns, were expected to be recovered as transportation, hotels, malls, and restaurants raise their capacity to 70 to 100 percent.

But Chua said resuming in-person classes would have a bigger contribution to the country’s economic recovery.

Chua noted that only 13.1 percent or 7,939 schools were holding in-person classes or ready for in-person instruction, citing the latest Department of Education data as of Feb. 22.

“As children get vaccinated, this is the opportunity to open more schools for [in-person] learning, so that we can boost the economy and improve the learning opportunity of children,” Chua said.

‘Alert Level 1 not enough’

Chua said an additional P12 billion would be added to the economy weekly when services around schools like transport, dorms, food stalls, and school materials resume operations.

With two years of distance learning — through modules or online — an estimated P22 trillion or P11 trillion per year in long-term productivity losses among students who were unable to learn well would be inflicted into the economy, Chua said, citing Neda’s estimates on the pandemic’s scarring effects last year.

As in-person classes are more effective, school children’s learning outcomes would also improve by about 50 percent, Chua added.

Chua added, however, that the shift to Alert Level 1 will have a limited impact on jobs if adults still had to stay at home to help their kids study.

“If we want a full recovery, then Alert Level 1 is not enough. [In-person] learning must also resume, because 40 percent of our population are in the school age, so that is a big contributor to the economy,” he said.

Chua said the Philippine economy shed P3.8 trillion in output in the past two years due to the pandemic.