President Duterte extends ECQ in key regions

PHILIPPINES - In Brief 24 Apr 2020 by Romeo Bernardo

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President Rodrigo Duterte today announced the extension until May 15 of Enhanced Community Quarantine (ECQ) in key parts of Luzon island deemed “high-risk”, including the three top contributors to GDP, Metro Manila (36%), Calabarzon (17%) and Central Luzon (9.8%). He also decided to transition several “moderate-risk” provinces to General Community Quarantine (GCQ) with slightly laxer rules. Given the size of regions still under ECQ (including other key cities in the Visayas and Mindanao), the decision today would have very minimal impact on raising domestic output. However, today’s announcement is important in that it bares government’s ECQ exit strategy, which will likely apply to Metro Manila and[1] the other regions once their health situations qualify as “moderate-risk.” Based on the announced guidelines, conditions under GCQ will remain far from normal. Aside from requiring certain age groups to remain at home, work and businesses allowed to resume will only be for certain sectors (non-leisure), on a restricted basis (in phases) and subject to mandatory precautionary measures (e.g., physical distancing, masking, temperature checks). Local government units will also enforce curfews. Overall, this tells us that GDP will take a much deeper dive in 2Q, something we are looking into for our quarterly outlook update. That said, given the amount of public subsidies required to help vulnerable groups, the odds that the ECQ will be extended beyond May is, we think, small. As it is, despite several proposals in congress to provide more budget for economic recovery efforts, the executive has been reticent, with Finance Secretary Carlos Dominguez eyeing to keep this year’s de...