MANILA -- Drastic quarantine measures imposed on the Philippine capital Manila left many of the city's busiest shopping centers virtually empty over the weekend, dealing a major blow to the country's $330 billion economy.
As of Monday, major malls and shopping centers in the National Capital Region were ordered closed until April 14, with mass gatherings also banned.
With hundreds of flights into the city cancelled daily, gambling in Manila's four resort casinos suspended, and restrictions on the trading of financial securities, the main Philippine Stock Exchange plunged 8% on Monday with heavy losses across all key sectors.
Manila's bourse saw 14% of its market capitalization erased last week, with all listed companies ordered to file COVID-19 risk mitigation plans by Monday.
Metropolitan Manila makes up nearly 40% the national economy and is closely linked to production hubs to in the northern and southern regions. Gross domestic product growth will be hit hard in the first half of the year, said Alvin Ang, director at the Ateneo Center for Economic Research and Development.
Jonathan Ravelas, chief market strategist at BDO Unibank, sees up to a 1 percentage point reduction in the first quarter, but conceded that accurate forecasting is difficult.
"This is a different ball game," Ravelas said.
Ang, for his part said, “with the lockdown, I think even posting a positive growth will be a challenge," added that the measure was a "necessary pain."
Days before the Manila lockdown took effect on Sunday, the Philippines reported a spike in the number of COVID-19 cases, bringing the total to 140 with 12 fatalities as of Sunday.
A further rise could up the pressure on local governments to finally implement a proposed region-wide curfew from 8 p.m. to 5 a.m. to curb people movements within the 16 cities which comprise the entire National Capital region.
"The situation is difficult," said Charo Logarta-Lagamon, spokesperson at Cebu Air, the county's largest low-cost airline, which was forced to cancel over 200 daily domestic flights and is processing 2 billion pesos ($40 million) worth of refunds. Philippine Airlines has halted over 60 daily routes.
Cebu Pacific announced on Monday that it will lay off over 150 newly hired staff.
Major malls in Manila, a focus for daily routines such as dining, leisure and attending religious services, were all closed on Monday, leaving normally jammed locations empty.
Ayala Land, a unit of major investment house Ayala Corp., as well as SM Prime Holdings and Robinsons Land, subsidiaries of conglomerates SM Investments and JG Summit Holdings, have all announced that they will comply with the lockdown order. Grocery stores, pharmacies, banks and some restaurants will be allowed to remain open.
On Sunday, armed military and police personnel manned checkpoints at major entry points to the metropolitan area, demanding commuters show identification cards proving they had a reason to enter the capital, and implementing body temperatures checks before permitting entry, and violators threatened with arrest.
Amid protests against the drastic measures, government officials appealed to the public to comply, warning that the Philippines cannot afford to suffer the fate of wealthier Western economies which have experienced a surge in the number of coronavirus cases and rising death tolls.
"We were like Italy two months ago. They were arguing whether to impose a lockdown or not," Interior Secretary Eduardo Ano, a retired military general, told reporters over the weekend.
"If you'll go to work, go. If you need medical treatment, go. If you'll buy food, go, but other than that, stay home," Ano said.
With over a million people from nearby areas commuting daily to the national capital region, the Department of Labor and Employment has urged companies to allow staff to work from home.
Vital business process outsourcing companies have been told set up flexible work and transport arrangements.
But US-based call center Concentrix, one of the largest in Manila, said while establishing work from home protocol was a "complex process," it was looking at ways to make it happen.
Hanica Jane Pacis, the company's director of marketing and communication in the Philippines, told Nikkei Asian Review the company has to consider not only the agents' capability and high-speed internet connection at home but also the "immense level of data security required overall."
Small business owners are also starting to feel the pain.
Elmer Mendivel, who owns a vegetable cart in the normally crowded Divisoria market in downtown Manila, said Sunday that he was struggling to sell all his produce.
"By this time, I should have sold everything. Now they are rotting" Mendivel said removing rotten leaves from his cabbages. "People are afraid to go out."
Panic-buying hit major supermarkets in the capital days before the lockdown, with people hoarding sanitizers and food supplies.
With masses in the predominantly Catholic city also suspended, sellers of rosaries and flowers outside the huge Baclaran church were pleading with the few church visitors to buy something.
"I haven't sold anything," said Elvira Alcantara, a flower seller. "How can we eat?"
Public transport operators were also ordered to carry fewer passengers, while popular motorcycle ride-hailing apps Angkas and Joyride suspending services.
Emerson Arado, a driver of one of Manila's tens of thousands of jeepneys, the city's famous minibuses which ferry millions of people across short distances, said the new social distancing measures will halve his income. "We can't afford that. I have a rent to pay and a family to feed," he said.
While government officials have urged companies to still pay employees during work suspension, Employers Confederation of the Philippines Chairman Edgardo Lacson said companies must be allowed to support their staff within their means.
"Mandating humanitarian act or forcing charity is oppressive, cruel, and can bring more harm," Lacson said told Nikkei. "No one should be compelled to share from an empty cup.
Central bank Gov. Benjamin Diokno, who is under self-quarantine after possible exposure to the coronavirus, is set to preside at a monetary board meeting on Thursday, with a growing number of analysts betting an aggressive easing to boost the economy.
"I won't be surprised if they go with 50 basis points," said BDO Unibank's Ravelas. "But fiscal stimulus is more important than monetary."