BORDER control is crucial at this time in order to prevent the entry of the Omicron variant of Covid-19 into the Philippines, according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Karl Kendrick T. Chua told BusinessMirror “guarding” the country’s borders will allow domestic economic activities to continue.
On Monday, local economists called for the closing of the country’s borders to prevent the spread of Omicron in the Philippines. (See story here: https://businessmirror.com.ph/2021/11/29/close-borders-cut-omicron-exposure-risk/)
“Priority is to guard our borders so all domestic activity can continue. So border control will determine the level of threat and alert level,” Chua told this newspaper.
Chua said the government has set up a color coding system which can be used to guard the country’s borders from potential travelers that could bring in the Omicron variant.
Under this system, Green List countries include those classified by the IATF as “Low Risk” countries/jurisdictions/territories while those under the Red list are classified as “High Risk” countries/jurisdictions/territories.
The Yellow list countries, meanwhile, are those countries/jurisdictions/territories classified by the IATF as “Moderate Risk.”
Chua said the protocols associated with these classifications will help the country better prevent the entry of individuals who could be carriers of the Omicron variant.
“It [guarding borders] will [have an] impact of course, but as a preemptive move, it will save us future lockdowns,” Chua noted.
Volatile recovery
In a Research Brief, Oxford Economics said that while it is still too early to pass judgment on the Omicron Covid-19 variant on the global economy, the situation showed the volatility of economic recovery at this time.
Oxford Economics Director of Global Macro Ben May said currently, there is no definitive evidence that Omicron is more transmissible and causes more or less severe symptoms than Delta or that it affects vaccine efficacy.
However, if Omicron becomes the dominant Covid-19 strain and causes more serious side effects as well as reduces vaccine efficacy, it is possible for global economic growth to only hit 2.3 percent, significantly lower than its baseline forecast of 4.5 percent.
“In our upcoming December 6 forecast we envisage lowering next year’s world GDP forecast by a considerably more modest 0.3 percentage points [ppts] or so,” Oxford Economics said.
“This is based on Omicron inflicting a similar scale of disruption at the turn of the year to that seen in Q3 [third quarter], and most of the economic weakness being caught up in Q2 [second quarter] and Q3 2022,” it added.
The best-case scenario for the global economy, Oxford’s May said, is for Omicron to be a less virulent strain than Delta and speed up the transition toward “normalcy” through the rapid deployment of better vaccines.
The worst-case scenario, meanwhile, is for Omicron to trigger the increase in restrictions and the disruption of global trade. This will cause GDP to slow to 2.3 percent in 2022 with advanced economies being particularly hit.
The US and eurozone GDP growth in 2022 is around 2 ppts below their current baseline forecasts of 4.5 percent and 4.2 percent, respectively.
Faster recovery
In the Philippines, Chua said the effective management of Covid-19 risks will allow the economy to recover to the pre-pandemic level in early 2022.
Chua said interventions enabled the effective management of Covid-19 risks and the country’s continuous economic recovery.
These include the shift to the alert level system and granular lockdowns, removal of age restrictions on mobility and pilot opening of face-to-face schooling, and the increase in transport capacity to 75 to 100 percent.
Moreover, the Philippine economy grew by 7.1 percent in the third quarter of 2021. Improvements in the manufacturing production, external trade, public infrastructure spending, employment, and mobility also point to the recovery of key sectors.
“If we can perform at this level in the third quarter despite the ECQ and MECQ, we can expect even better performance in the fourth quarter of 2021.
Our economic growth remains promising and we need to build on these gains to accelerate recovery, and prevent long-term scarring and productivity losses,” Chua said.
To solidify the country’s economic performance and to further accelerate economic recovery, the Neda proposed five key actions:
First, reducing artificial barriers to vaccination, and expanding the vaccination drive to children from age 5 and above in the appropriate time.
Second, moving to Alert level 1 by January 2022, which will require everyone’s adherence to minimum health standards especially during the holidays.
Third, resuming face-to-face classes for all schools in January 2022, with consideration of the lessons learned during the pilot classes conducted in selected areas.
Fourth, increasing public transport capacity to 100 percent for all transport types to ease public transport stations.
And last, streamlining all requirements for local and international travel to improve mobility.
“The data on our progress is likely to improve further if we focus on the safe reopening of the economy alongside the intensified vaccination drive, and reduce the barriers to mobility to allow the free movement of people,” Chua said.