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How Much Will COVID-19 Cost the Philippines?

Over the next 10 to 40 years.
ILLUSTRATOR WARREN ESPEJO
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The total cost of the COVID-19 pandemic on the Philippines from the time it started in 2020 up to the next 10 to 40 years is estimated to reach a total of P41.4 trillion, according to the National Economic Development Authority (NEDA). 

In a report obtained by Esquire Philippines, NEDA broke down the estimated cost into P4.3 trillion in 2020 and P37 trillion in the "long run," or over the next 10 to 40 years.

Based on NEDA’s calculations, consumption and investment will also be lower in the next 10 years “due to lower demand in sectors that require social distancing (such as amusement tourism, restaurants, public transportation), which means tax revenues will also be lower.

Photo by NEDA.

“Workers productivity will also be lower due to death, illness, and lack of schooling. The impact on productivity is likely to be permanent (i.e. over 40 years of working age).”

NEDA also presented some sobering facts about the impact of COVID-19 on the country’s economy and the people:

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1. There are now over 2.3 million cases of COVID-19 and 35,500 deaths in the Philippines as of September 16, 2021.

2. Community quarantines (of varying levels) have now been enforced for 18 months.

3. Economic growth for the Philippines was at -9.6 in 2020.

4. Of about 1,000,506 businesses in the country, 111,052 (10.1 percent) reported to have closed temporarily, while 3,807 (0.4 percent) reported to have closed permanently.

5. At the peak of the health crisis, 8.7 million workers lost their jobs; and unemployment rate reached a sky-high of 17.6 percent.

6. Total household wage and income loss reached P1.04 billion in 2020, with an average of P23,806 per worker.

7. At the peak, one in four people in the National Capital Region was hungry.

According to NEDA, from P19.5 trillion in 2019, the Philippine economy (GDP) would have grown 9.5 perent to P21.4 trillion in 2020. Instead, because of the pandemic, the economy shrank 8.1 percent to just P17.9 trillion. The agency points to a sharp decline in productivity for the contraction: from an average increase of about 1.8 percent from 2010 to 2019, to -7.1 percent in 2020.

Tourism, which was one of the hardest-hit sectors of the pandemic, plummeted 61.2 percent—from P2.5 trillion (or 12.8 percent of the country’s GDP) in 2019, to just P973 billion (5.4 percent of GDP) in 2020. 

Impact on education

NEDA paid particular attention to the effects of the pandemic to education. 

“School year 2020-21 did not have face-to face-learning,” the report said. “To our knowledge, no other country in East Asia closed their school for face-to-face learning for an entire year.

“Globally, there is evidence that children are only mildly affected by COVID-19 and rarely infet their teachers.” 

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The report further said that only some three million households (or about 12.5 percent of total households) have children and seniors living together, and that enrollment has declined by 1.1 million “due to the lost income of parents and the inability of some students to engage in distance learning.”

Some 865 private schools have reportedly shut down because of the pandemic, the report added. 

Citing studies in the U.S., NEDA notes that online learning is only around 52 percent as effective as face-to-face learning, and that other forms of learning (such as modules) may be less effective and is estimated at 37 percent as effective as face-to-face learning.

Photo by NEDA.

In NEDA’s own survey, nearly 60 percent of families have at least one parent who skips work to teach their children, which results in 25 percent foregone income. 

Finally, NEDA notes that the current school year will begin with still “no face-to face learning and there is still uncertainty when we will allow students to go to school physically.”

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Highlighting the consequences of the closure to face-to-face schooling—including less learning, lower future income and lower productivity, and lower competitiveness—NEDA says “the pandemic and school closure are exacerbating the already unequal access and lower quality of education in the Philippines.” 

All in all, NEDA estimates the total cost of te face-to-face school closure at P11 trillion in lost wages—P230 billion in 2020 and P10.795 trillion over a 40-year period (or the average working life of a person).

Impact on health

NEDA also released data and estimates on the state of health in the country. The most troubling findings include the following:

1. Philhealth claims for high-burden diseases such as cancer, diabetes, and hypertension have dropped by 75 percent during the pandemic, which means that people are deferring health treatments due to the lack of resources for healthcare, mobility restrictions, or the fear of getting infected in hospitals.

2. Around one in three children below five years old are stunted (short for their age), one in five are underweight, and one in 17 are wasted (low weight for their height).

3. Unwanted pregnancies increased by 320,000 over the 16-month quarantine period. The share of pregnant women receiving pre-natal care also dropped from 99 to 61 percent.

4. More than half of Filipino workers faced a mental health challenge and 23 percent of workers thought about quitting their job.

Photo by NEDA.
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Due to the pandemic, life expectancy for Filipinos could be cut short by one year to as much as four years, NEDA said, citing studies by the World Health Organization, the U.S. Centers for Disease Control, and various universities. The Philippine Statistics Authority says the current life expectancy of Filipinos is 71 years for males and 77 for females.

“Many people who recover from COVID-19 experience other health concerns (e.g., brain fog, weakness, respiratory damage),” the NEDA said. “Many more people will become unable to work fully due to the inability to get treatment from other diseases. Both of these lead to lower productivity.

“In addition, there are also additional healthcare costs associated with these various diseases and sickness,” the agency added.

What needs to be done

To ensure a strong recovery in 2021 and 2022 with growth rates of four to five percent and seven to nine percent, respectively, NEDA, which ic currently headed by Karl Kendrick T. Chua, recommended the following:

1. Accelerating vaccination of all adult Filipinos to reach 70 million by end-2021 by expanding vaccination sites, including work sites, removing artificial barriers, and using technology to reduce the wait and processing time.

2. Managing risks better, opening the economy safely, allowing selected family activities to resume, allowing limited face-to-face schooling, and imposing localized lockdowns in highest risk areas, which is currently being piloted in NCR. Remember: the most restrictive community quarantines only postpone the surge. What will reduce the surge is the PDITR (Prevent-Detect-Isolate-Treat-Reintegrate).

3. Implementing the recovery program, in particular the timely use of the 2021 budget, and reprioritizing the budget to the most important programs.

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NEDA also said it would work “with Congress to refine the 2022 budget allocation and future budgets to address deficiencies in investments in physical and human capital to close the gap faster.”

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Paul John Caña
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