(Bloomberg) -- The Philippines has extended a lockdown on Luzon island until the end of April, idling its economic engine and home to most of its population to counter the spread of coronavirus.
The quarantine that began in mid-March was set to end April 12, but given the sustained growth in virus cases the lockdown will have to stay, the government said Tuesday. The country will need to put more funds toward virus relief, as the 200 billion pesos ($3.9 billion) set aside so far for cash aid to poor families won’t be enough, President Rodrigo Duterte said Monday.
“The economy is not moving, it’s at a standstill,” Duterte said, as he directed economic officials to find more funds to support citizens.
The president said he’s considering further tweaking this year’s 4.1 trillion-peso budget to shift more funds toward virus response. About 30 billion pesos meant for infrastructure could be diverted for efforts to counter the virus impact, Public Works Secretary Mark Villar told ABS-CBN News Channel.
The Economic Planning Agency said last month that even the low-end of its growth estimate -- a full-year contraction of 0.6% -- “is still too high” if restrictions to movement on Luzon, an island of 60 million people that accounts for 70% of the country’s output, extend beyond one month without government intervention.
Hundreds of factories and business establishments have been closed in the lockdown, placing tens of thousands of wage earners in financial peril. Remittances from Filipinos working overseas, which account for about one-tenth of the economy, may decline by as much as 30% this year as thousands of workers return home, Economic Planning Secretary Ernesto Pernia told ABS-CBN News.
Pernia said he will propose opening more shops for basic needs and resuming manufacturing and agriculture operations to lessen the lockdown’s blow. The Philippines had 3,660 confirmed coronavirus cases, including 163 deaths, as of Monday.
Central bank Governor Benjamin Diokno said Tuesday that slowing inflation gives the monetary authority more room to ease policy, after it cut its key interest rate by 50 basis points last month and reduced banks’ reserve ratio to 12% to bolster the economy. The bank also has bought 300 billion pesos of government debt and said it’s open to more.
Late last month, the legislature granted Duterte extraordinary powers to refocus the budget toward virus response, with a package to support businesses currently being drafted.
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