BUSINESSMAN Enrique Razon Jr. yesterday warned a second lockdown – resulting from a relapse or second surge of coronavirus diseases 2019 (COVID-19) cases – could lead to a depression.
Razon told television channel ANC government may have to spend another trillion pesos for small businesses as a response to the pandemic to get the economy moving if the lockdown is extended.
He said government could consider a gradual restart of businesses to just 15 to 20 percent of their capacities after the enhanced community quarantine that ends April 30, but cautioned against opening public transportation which will spread the virus.
Razon said a second lockdown is disastrous to the economy and will turn the current recession into a depression.
Razon noted testing is key and needs to be ramped up to curb the spread of the virus.
He said the capability of industries in areas where infections are down to test and transport their own employees and test even their customers could be considered a factor in allowing them to reopen.
“I think those who can manage this process broadly could start operating. (They could) start with something like 15 to 20 percent (of capacity), then see how it goes,” Razon said.
He said big companies in manufacturing factories, hotels and construction may have this capability.
“The one concern I really have is public transportation because we cannot allow this virus to freely move around society and that’s probably what will happen if public transportation is allowed. So it’s really a tough choice. My main worry really is public transportation and the areas where there is no physical distancing… (if) there are four or five people to a small house that’s 10 square meters you really cannot keep people indoors in this manner. So, there are certain parts of the city that is very difficult to really lock down,” Razon said.
But if the lockdown is extended, government has to rethink the package of money and goods it is giving to the people.
“Congress has to come up with a second package for small businesses, and (government) cannot just be giving people money and food… small businesses especially, which is the vastly the biggest employer will start going under,” he added.
Razon said the country will have to spend at least P1 trillion over and above what has been allotted in the 2020 budget.
He said this will bring the Philippines’ debt-to-GDP to just under 50 percent which is better than 99 percent of the countries in the world.
Razon said the era of globalization is over due to the pandemic.
“The entire world now is in a recession, a deep one. Each country has been hit at different times in the first quarter. They’ll probably start opening up their economies of different stages, but within close proximity to other countries,” Razon sad.
