Filipino generations lost 41 trillion pesos due to COVID-19 – Manila Bulletin
The long-term economic cost of the coronavirus and pandemic-induced lockdowns would be more than three times the government’s multibillion-peso debt, the National Economic and Development Authority (NEDA) has estimated.
Socio-Economic Planning Secretary Karl Kendrick T. Chua said on Saturday, September 25 that the continued impacts of the protracted health crisis and several quarantine measures have already cost present and future generations of Filipinos an estimated $ 41.4 trillion. pesos.
The massive estimate released by NEDA overshadows the total accumulated debt of the Philippine government, which the Treasury Office said stood at a record 11.6 trillion pesos in July 2021.
Chua said the estimated losses from the COVID-19 crisis were the result of a six-month study conducted by NEDA and its related agencies as well as the country’s development partners.
“The current and future costs are estimated at 41.4 trillion pesos in terms of net present value. Broken down, in 2020 we lost 4.3 trillion pesos; in the next 10 to 40 years, we estimate that we will lose up to 37 trillion pesos, ”Chua said in a statement.
Chua added that consumption and investment are expected to be lower over the next 10 years due to declining demand in sectors requiring social distancing, such as tourism, restaurants and public transport.
Therefore, tax revenues will be lower if businesses cannot operate at 100%, the NEDA chief warned.
According to Chua, the estimated total loss due to the drop in consumption is 4.5 trillion pesos. Meanwhile, the loss of private investment and returns over the same period is about 21.3 trillion pesos.
Chua also warned that the country’s gross domestic product (GDP) recovery would progress at a snail’s pace. “We expect the economy to converge on the pre-pandemic growth path by the tenth year.”
“While we will return to pre-pandemic levels by the end of 2022 or early 2023, it will be several more years before we converge on our original growth path,” Chua added.
Another key finding of the study is that worker productivity will also be lower due to premature death, illness and lack of face-to-face training.
The impact of these on productivity is likely to be permanent over the next 40 years or the average number of years a person is expected to work in their lifetime, he said.
Based on the NEDA study, the loss of productivity resulting from investment in human capital and returns is estimated at 15.5 trillion pesos for the next 40 years.
Of that, 4.5 trillion pesos are losses due to premature death, loss of productivity due to disease, and inability to access treatment for other illnesses and illnesses associated with recovery from COVID-19.
“Moreover, it also represents additional health costs associated with these various diseases and illnesses,” Chua said.
Meanwhile, the remaining 11 trillion pesos represents reduction in future wages and productivity, due to the suspension of face-to-face classes during the 2020-2021 school year, and the loss of parents’ wages. who give up or reduce working hours to accompany their children in online courses.
The loss of future wages is based on the impact of lower quality online learning education and other types of distance learning during the pandemic.
According to the Asian Development Bank, every year of schooling lost results in a permanent 10% drop in future wages.
Using US data adjusted for educational levels in the Philippines, NEDA estimated that online and modular learning in the country is only 37% as effective as face-to-face learning.
While this tempers the full impact of total school closings, Chua said prolonged use of distance learning will lead to lower future productivity and, as a result, lower wages.
“The one-year closure of the school cost the economy 230 billion pesos in 2020, and its impact over the next 40 years of student life on the labor market is estimated at 10.7 trillion. pesos. This impact on productivity is likely to be permanent throughout a person’s life, ”explained Chua.
To deal with the impact of the COVID-19 pandemic and alleviate the long-term effects of the scars on the economy and the population, Chua stressed the importance of the three-pillar strategy.
This includes accelerating the immunization program by expanding immunization sites and taking advantage of new technologies, safely opening the economy through localized lockdowns and face-to-face pilot courses, and fully implementing implement the stimulus program, in particular the 2021 budget.
“Let’s use this pandemic to get everyone to work more urgently to solve the problems we have now. Our recommendations have not changed, ”said Chua.
“We can still get back to pre-pandemic levels by late 2022 or early 2023, with a growth rate of 4-5% this year and 7-9% next year, if we do these three things. “, he concluded.
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