As the Covid-19 is rapidly spreading across the world, the World Health Organization has already declared it a pandemic. This sparked a global panic. With institutions shut down, private and public gatherings canceled, and tours and concerts postponed— the world has become a more quiet and desolated area. If we take a step back and look locally, it seems like the Philippines is dealing with its own set of issues in this crisis.
Despite the hazards of going out, it seems like the Philippines is still a bustling country. Even with the imposed community quarantine, some people, like my parents, still choose to go to work. They usually have this reasoning of “no work, no money.” That’s the sad reality for not just Filipinos, but for everyone else. Many people’s number one concern is whether they would have enough to eat tonight.
What’s worse in this situation is that these businesses would have to grasp every single penny. Sure, you open and still have money banked in, but fewer people go outside, which means lesser potential customers.
My family owns three stores. Since people diverted their attention to the virus, they prefer to spend their money on stocking extra food and other products such as alcohol. They used to earn a lot but now, they only earn up to less than one-fourth of their daily earning. Not to mention that a lot of people also lost their purchasing power because the enterprise they work for is closed and they don’t earn any salary.
Looking into this on a wider scale, the Philippine economy is expected to contract, and we can already see that happening now.
We have already seen it with the Philippine Stock Exchange. Stocks and shares of several companies dropping from 2019 prices to retract back to 2013 prices. This enables the valuation of these companies to be cheaper to buy shares for the consumer. However, this is critical for the producer as their assets have significantly decreased.
Tourism also hit a new low, dropping by large margins due to fear induced by panic and clamor. Not to mention, the travel ban from certain countries reduces potential visitors.
Panic buying, for the local economy, will lead to higher inflation in the long run. Rest assured, this virus would not probably last forever and eventually, it would stop, however, its effects could last a lifetime. Since people are continuing to spend, companies have to raise prices on a lot of products to stabilize the money supply. To flush it out, however, is when they also have to raise prices so people will spend less and save, they would just leave the money unspent. This will lead to inflation to gradually increase in the long run.
As seen today, the environment of the country is based on survivability. People are scared of a possible full lockdown, so they will be driven to spend more on essential goods rather than excessive spending. This will impact local businesses like my family’s. However, there’s no need to fret. All this is only a temporary issue and people would gradually go back to excessive spending.
Story by Elisha Rael Ordonez
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