Duterte Expands Philippine Lockdown to 60 Million People
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Philippines President Rodrigo Duterte on Monday widened a month-long lockdown in the capital region to cover the main Luzon island to contain an outbreak of the new coronavirus.
An “enhanced quarantine” of the island with a population of at least 57 million people will be implemented until April 12, Duterte said in a televised address. Mainland Luzon will be on a strict home quarantine that the police and military will oversee, and workers must work from home to “significantly” limit movement, he said.
“Everyone must stay at home, leaving their houses only to buy food, medicine and other basics necessary for survival in the coming days,” Duterte said. He also asked private companies to advance workers’ pay.
The Philippine Stock Exchange announced late Monday night that it will suspend trading from Tuesday “until further notice” after Duterte expanded the month-long lockdown. “Mass transport suspension and work suspension in the private sector plus the mandate of the government to stay at home constrained us to suspend trading and clearing & settlement for now,” the bourse’s Chief Operating Officer Roel Refran said.
The move to contain the virus, which has infected at least 140 people in the Philippines and killed a dozen, will come at a cost to an economy that draws more than 70% of its output from the main island of Luzon which includes the capital region. Bangko Sentral ng Pilipinas will consider a deeper policy rate cut of 50 basis points at its March 19 meeting, Governor Benjamin Diokno said after the expanded quarantine was announced.
Fluid and uncertain
“It’s like slamming the breaks on the economy,” said Nicky Franco, head of research at Abacus Securities Corp. in Manila. Duterte’s move will further damp economic activity and markets, he said, forecasting a further slump in the main stock index to as low as 4,500.
Gross domestic product growth this quarter may slip to 5% year-on-year and slow to 5.4% for the entire 2020, said Carlo Asuncion, an economist at Union Bank of the Philippines. That forecast may have to be revised again “because everything is very fluid and uncertain,” Asuncion said.
The Philippine Stock Exchange index shed a further 7.9% to 5,335.37 at close, before Duterte’s latest announcement while the peso extended its decline against the dollar for the fourth straight session.
Philippine Markets Cut Trading Hours Amid Manila Lockdown
“Growth will likely take a hit, that much is certain,” said Howie Lee, economist at Oversea-Chinese Banking Corp. Ltd. in Singapore. “But BSP still has a lot of monetary policy room and the consolation is that the Philippines has a lower reliance on exports than other regional peers. An aggressive monetary policy is expected this week to partially offset the effects from this quarantine of Luzon,” Lee said.
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