Forecasting in a time of radical uncertainty

PHILIPPINES - In Brief 13 Mar 2020 by Romeo Bernardo

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Last night, President Rodrigo Duterte, upon the recommendation of health officials, announced that for 30 days starting March 15, Metro Manila will be put under “community quarantine”, a term that he said means a lockdown. The measure was in response to the rapidly rising number of covid-19 infections in the last 10 days, increasing from only 3 (with one dead) to 52 (5 deceased) per the latest count. The quarantine of Metro Manila is accompanied by guidelines that may lead to a widening of quarantines to other local government units and/or their smaller political subdivisions depending on the spread of covid-19 cases. Other “stringent social distancing measures” have also been imposed including the suspension of classes and mass gatherings and most work in the executive branch of government. Nevertheless, it will not be a total lockdown as retail outlets will remain open and public transportation systems will continue to operate. Also reported excluded are deliveries in and out of Metro Manila, and workers who live outside Metro Manila will be allowed entry/exit. The measures at first glance are quite drastic considering the relatively low number of covid-19 infections but on further thought appear necessary given the high likelihood that many more cases remain undetected and the fact that the health department has only a limited supply of test kits. Panic buying in supermarkets has also become the norm this past week although the impending lockdown has so far only made checkout lines longer. Clearly, our last brief downgrading our 2020 economic growth forecast had not anticipated a lockdown situation and of Metro Manila no less, which accounts for close to 40% of Phil...