​Lockdown watch

PHILIPPINES - In Brief 29 Mar 2021 by Romeo Bernardo

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Metro Manila and 4 surrounding provinces (“NCR plus”) went into the most stringent lockdown classification (“ECQ”[1]) today that will last a week. Checkpoints have been set up, a long curfew (6pm to 5am) imposed and only one person per household allowed to go out for essential procurements. The lockdown affects about 25 million people and is intended to temper the current surge in covid19 cases (over 10k new cases today) and help the healthcare system recover.Experts are saying that a one-week lockdown is not enough to control the surge or reduce daily cases by 25%, government’s target. Expectations are forming that tight restrictions will continue beyond Easter, whether an extension of the ECQ or a shift to the slightly looser modified ECQ (mECQ), possibly for another week or two, before reverting to GCQ. The presumption that the hard lockdown would be kept relatively short (weeks vs months) may be driven in part by limited public funds for food subsidies which we gather will be spread out more thinly this time to assist more people. More broadly is the expressed desire to limit the damage to the economy from a long and strict lockdown. In our brief last week before the ECQ lockdown[2], we capped our GDP forecast to 5%, anticipating that rising fears and travel / dining limits under the “NCR plus” bubble setup will check expected increases in discretionary spending. We think that a one-week ECQ during Holy Week, with public transportation continuing to operate at 50% capacity, will not by itself dent economic output much more vs. the bubble setup. However, we worry that unless covid19 cases fall dramatically in the coming weeks, fear of infection and curbed consumer s...