COVID-19 Delta Variant a bigger threat than “downgraded” credit ratings

The opposition will surely make a mountain out of a molehill about this issue of the Philippines’ “downgraded” credit rating again.

A negative outlook means the debt watcher could downgrade the Philippines’ credit rating in the next 12 to 18 months if the country fails to recover from the pandemic. https://t.co/a0mbFbW8Ih

— The Philippine Star (@PhilippineStar) July 12, 2021

There is, however, no basis for worry. The debt-to-GDP (gross domestic product) ratio is still manageable. The budget deficit increased but the gross international reserves of the Bangko Sentral ng Pilipinas (BSP) are at a historic high.

The rate of vaccination is supply-driven though there are definitely bottlenecks in the logistics chain which need to be addressed and local government units (LGUs) have to improve on implementation. We are the only country in the region not experiencing a Delta variant driven surge. This can change the minute there is a community transmission.

The Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID or IATF) has not addressed the need for a unified contact-tracing system. Both private and government offices are still lax in their enforcement. There is no wide use of QR code scanners. The health declaration is still filled out manually. The security guards were lax in temperature checks. The IATF-EID and the LGUs are falling into a false sense of complacency with talk about allowing children above 5 years old to go out to select establishments. With our vaccination rate, this is not advisable. It is better to be safe than sorry.

The Delta variant has proven that the vaccinated can still be infected but the risk of mortality is manageable. The economic recovery will be derailed by a new surge fueled by the Delta variant. The IATF-EID should be formulating policy on the basis that COVID-19 is endemic as what Singapore is doing. It should speed up vaccination as best as it can despite the supply constraints and make a bold push for adapting to the new normal under the assumption that COVID-19 is endemic.

Both goverment and the private sector should push for digitization in order to minimize risk and prevent another surge resulting in a lockdown which will paralyze the economy again.

Ramon Ortoll

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