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‘Contagion’ writer, scientific adviser reflect on film’s newfound relevance amid coronavirus crisis



Nothing spreads like fear.

Nine years after the release of Contagion, a Steven Soderbergh-directed epidemiology thriller bearing that tagline, an outbreak of novel coronavirus in China’s Wuhan province—declared a global health emergency by the World Health Organization (WHO), which has since renamed it COVID-19—has sent shockwaves through the world’s economy and incited panic far from the disease’s apparent point of origin.

It’s also led to a resurgence of public attention to Contagion, which recently hit No. 10 on iTunes and has been the subject of numerous articles comparing its fictional pandemic to the real one. Both outbreaks originated in China, with the virus most likely passing from a bat to another animal before it spreads to humans.

Given these surface-level similarities, screenwriter Scott Z. Burns isn’t surprised the 2011 film might be of particular interest to those rattled by COVID-19’s spread—its death toll surpassed 1,100 this week, almost entirely in China. But he questions whether viewers are keying into the film’s larger points about social panic during infectious disease outbreaks.

“The similarities between our contagion and the coronavirus are immaterial, accidental, and really not that important,” Burns tells Fortune via phone. “What is more important and accurate is the societal response and the spread of fear and the knock-on effects of that. That is proving to be accurate.”

The 2011 film “Contagion” experienced a surge in popularity on iTunes amid coronavirus fears.
Warner Bros/courtesy Everett Collection

If Contagion‘s virus bears tangible similarities to COVID-19, there’s a simple reason for that: Burns did his research.

In writing the script for Contagion, Burns always set out to make the most scientifically accurate version of a pandemic thriller he could, enlisting doctors W. Ian Lipkin and Larry Brilliant to help create an imaginary virus based on both science and their firsthand experiences within the field of epidemiology. It was through speaking with the scientists that Burns also hatched ideas about how society might react to such a virus, from looting of storefronts to a messianic “fake news” vlogger played by Jude Law.

“When I originally pitched this idea to Steven Soderbergh, I said I wanted Contagion to be as grounded in science as it possibly could be,” he recalls. “I didn’t want to do a Hollywood disaster movie that played loose with the science. The heroes needed to be scientists.”

Luckily, in Brilliant and Lipkin, Burns had two “hero scientists” at his disposal. In the 1970s, Brilliant was one of the epidemiologists who finally drove smallpox off the map. He later became the first CEO of the Skoll Global Threats Fund, funded by eBay founder Jeff Skoll to combat theats against humanity.

Lipkin, meanwhile, is known in his field as a “master virus hunter,” a reputation earned across three decades of working against time to identify and combat new viruses, from West Nile virus to the 2003 SARS outbreak. (Lipkin, the John Snow Professor of Epidemiology at the Mailman School of Public Health at Columbia University, is currently on a 14-day self-quarantine at his home in New York after traveling to China to advise local health officials on COVID-19.)

One aspect of epidemiology that fascinated Burns was experts’ widespread consensus that infectious disease outbreaks aren’t “a matter of ‘if,’ but ‘when,’” he says. “I’m not surprised that what they told me was a possible occurrence came to pass.”

“If you look at human history and go back to the Spanish flu, we get these outbreaks, and they occur constantly, and there’s no reason to believe that will change,” explains Burns. “What’s particularly disconcerting is when it’s called a ‘novel virus,’ meaning no one on Earth that we know of has ever had to deal with it before. It’s a new challenge for the human immune system. It takes time for our species to figure out.”

Burns, pictured in 2019, says he “didn’t want to do a Hollywood disaster movie that played loose with the science” when he wrote “Contagion.”
Vera Anderson—WireImage/Getty Images

Burns also consulted with Lipkin’s Columbia colleagues, as well as Pulitzer Prize-winning journalist Laurie Garrett (author of The Coming Plague). Says Brilliant: “We wanted to reset people’s ideas of what a real pandemic could look like, and to do it with impeccable science. What we gathered together was a team of the best scientists in the world to make sure that we, by accident or design, did not engage in hyperbole.”

To concoct the fictional MEV-1 virus that infamously felled Gwyneth Paltrow at the beginning of Contagion, the scientists—working on computers at Columbia—mimicked characteristics of two related viruses primarily found in bats but occasionally transmittable to humans: Nipah, from Southeast Asia; and Hendra, from Australia. Splicing those two together with influenza, they genetically engineered the fictional virus to spread through bodily fluids or coughing. In pursuit of something more cinematic than an agent that only causes respiratory distress, they leaned on Nipah’s classification as a paramyxovirus that infects the lungs and the brain.

“[MEV-1] swelled up out of Gwyneth Paltrow’s brain,” notes Brilliant. “It had people vomiting or going into seizures, captured on video. That’s the kind of stuff that creates more fear.”

It’s here that Brilliant stresses one key difference between MEV-1 and the real-life COVID-19. “This [coronavirus outbreak,] for most people, has been a much more mild disease,” says Brilliant. “This may be a disease that turns out to be widespread, but with a low death rate.”

“Most viruses that are airborne are odorless, tasteless, and invisible,” continues Brilliant. “That doesn’t make for good theater. The symptoms we wrote about, that we concocted, are not the same symptoms as this disease.” 

A culture of fear

Contagion charts the spread of two distinct viruses: the fictional MEV-1 pandemic, and the culture of fear its spread gives rise to, causing society to splinter and stymieing the international community’s ability to respond to the outbreak. Currently, Burns is preoccupied with headlines he’s seen about public responses to COVID-19, many by people making fear-based decisions that go against counsel from health experts.

Face masks are flying off shelves as healthy consumers seek to get ahead of coronavirus, creating a potential shortfall for medical workers more likely to come into contact with it. While face masks are relatively effective at preventing sick people from transmitting their illness, experts say they’re far less effective at keeping healthy people from getting sick.

People are seen lining up outside a Hong Kong pharmacy on Feb. 6 in order to try purchasing surgical masks, which have ben in short supply in the city.
Geovien so—SOPA Images/LightRocket via Getty Images

Petitions seeking to close districts and universities across the United States, citing the coronavirus as a reason to keep students home, are racking up signatures, while other school districts are erupting in panic without any confirmed cases of the virus in their communities. And though only a dozen cases of the novel virus have been confirmed inside the U.S., ride-sharing platforms are already experiencing an uptick in bigoted complaints, and Chinatowns across the country are struggling to retain business, two grim reminders of xenophobic and racist tensions that often become inflamed in times of crisis.

“Beyond the science of the virus,” says Burns, “what Steven Soderbergh and I were interested in was using it to trace a bullet through our society, and how the pre-existing conditions in our society make us susceptible to fear as well as the virus.”

The key to the film, he says, is a scene in which Laurence Fishburne’s CDC official, Dr. Ellis Cheever, appears on CNN to debate the character of Alan Krumwiede (Jude Law), a conspiracy theorist who rises to fame by stoking anti-government sentiment as the pandemic spreads. At one point, Krumwiede fakes contracting MEV-1 so that he can “cure” himself on his popular video blog with a simple homeopathic remedy derived from forsythia. The public responds by overwhelming pharmacies in search of it, causing the virus to spread as infected individuals come into contact with healthy people.

“In order to become sick,” says Fishburne’s Cheever in that scene, “you have to first come into contact with a sick person or something that they touched. In order to get scared, all you have to do is come into contact with a rumor, or the television, or the Internet. I think what Mr. Krumwiede is spreading is far more dangerous than the disease.”

Jude Law plays a conspiracy theorist in 2011’s “Contagion.”
Claudette Barius—Warner Bros/courtesy Everett Collection

Public overreaction and panic, inflamed by social media platforms and eroded trust in media institutions, has been on Burns’ mind a lot lately, as it was when he first sat down to write Contagion. Burns points out that the United States is already in the midst of its own health crisis: seasonal flu. According to CDC estimates from Oct. 1, 2019 up until Feb. 1, there have been between 22 and 31 million cases of flu in the U.S.

“We have limited capacity for what Dr. Brilliant called risk assessment,” explained Burns. “If you read the paper every day, you might see a lot of stories about people dying in car accidents. There aren’t stories about people dying of high blood pressure and heart attacks. Journalists don’t really write stories about these more mundane things.

“That people are terrified of coronavirus and don’t care at all about seasonal flu comes to this large point of our inability to differentiate risk,” he added. “People don’t go swimming because of Jaws but will do things much riskier than swimming in the ocean. That’s a problem for people in the public health sector, because once people become terrified, it’s hard to manage.”

For his part, Burns advises washing your hands, avoiding touching your face, and trusting experts within the scientific community, as well as being wary of misinformation being spread on social media, by fear-mongering outlets, or by politicians with other agendas.

Late last month, U.S. Commerce Secretary Wilbur Ross commented that the coronavirus outbreak in China would help “accelerate the return of jobs to North America,” insinuating that he saw the disease as a business opportunity.

“If he said that, he’s unfit for public office, and for public trust,” says Brilliant. “Those of us in public health have a custodial and fiduciary duty to the health of the public. We can’t profit off it. But we’re in a time of rising nationalism, and you can’t make this into a political event; but I can’t not comment on the fact smallpox was only eradicated because scientists from dozens of countries—every religion, race, and language—came together against it.”

Burns added that it “terrified” him to hear Ross so dehumanize the suffering of Chinese people. “Everyone has a different socioeconomic circumstance,” says Burns. “Everyone has their own tribal views, their own confirmation biases, and preconceived notions. But fear doesn’t make us better-equipped to be rational.”

Weak health care systems complicate the battle

Brilliant specializes in risk assessment, envisioning a spectrum of scenarios and preparing for each that has a “non-zero probability” of occurring. His work depends on acknowledging what no one yet knows: for example, which coefficient of risk to put on each probability—the virus could evolve to become deadlier, or die out altogether, to outline two scenarios.

He and others fear the preparedness of countries that have far fewer resources to identify and treat infectious diseases. When it comes to treating pandemics, the world’s defenses are only as strong as those established in its poorest communities, he says. Even if cities from Boston to San Francisco are well-equipped to contain COVID-19, the virus could continue to spread in lower-resource countries. And if it does, the harm to those countries could be catastrophic, especially if the virus continues to evolve, in which case it could theoretically become deadlier.

“The problem is that two dozen countries have received importations of that disease, but only two people have died outside of China,” Brilliant says. “That means the disease has been met in Thailand and the United States with a speed of detection that’s prevented the disease from becoming a second, full-blown locus of disease.”

“Think about a fire raging, that spews sparks everywhere, but it’s landing on fire-prepared land,” adds Brilliant. “But if you go through that list of 25 countries, what’s missing from that list? Where’s Venezuela? Where’s Zimbabwe? Where are the mining communities in Africa so many Chinese workers go to? Five million people left Wuhan before they went into isolation. They didn’t not go to Venezuela. My fear is what we don’t know. Are there countries with weak immunity systems where the virus has been there for five weeks, spreading unseen?”

Brilliant’s aware that he sounds less than reassuring. That’s just the gig. “Epidemiologists like myself have predicted 10 of the last two pandemics,” he says, chuckling. “We have to be careful what we say. But I do worry which of those countries might propagate this disease and don’t have testing labs and facilities, or adequate health infrastructure.”

While technologies that exist to help identify infectious diseases have advanced considerably since Contagion‘s release, funding for public health infrastructure has not been increased, especially in less developed nations. But even in the United States, under the Trump administration, funding to the CDC has been cut, hamstringing researchers as they race to protect civilians against biological threats. This, say both Burns and Brilliant, puts humanity at risk in a profound, preventable manner.

“Public health infrastructure is something we don’t pay attention to, until it’s way too fucking late,” says Burns. “We don’t go in very much for prevention. Then, suddenly, we’ve underfunded this important part of our society, and a situation needs attention but you’re already way behind.”

More must-read stories from Fortune:

—Stock scammers are using coronavirus to dupe investors, SEC warns
Credit Suisse making a comeback, but spying scandal drags down outlook
Why China is still so susceptible to disease outbreaks
A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade warsCatch up with Data Sheet, Fortune’s daily digest on the business of tech.

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People Are Rushing to Buy 100-Ounce Bars of Gold



People Are Rushing to Buy 100-Ounce Bars of Gold(Bloomberg) — There are few corners of the global financial market that have been upended as spectacularly, or as oddly, by the coronavirus pandemic as gold trading.Not only are prices swinging in an erratic fashion — surging one moment and crashing the next — that is undermining the metal’s vaunted status as a haven in times of crisis, but unprecedented logistical disruptions have also kicked off a frantic hunt for actual bars of gold.At the center of it all are a small band of traders who for years had cashed in on what had always been a sure-fire bet: shorting gold in the futures market. Usually, they’d ride the trade out till the end of the contract when they’d have a couple of options to get out without marking much, if any, loss.But the virus, and the global economic collapse that it’s sparking, have created such extreme price distortions that those easy-exit options disappeared on them. Which means that they suddenly faced the threat of having to deliver actual gold bars to the buyers of the contract upon maturity.It’s at this point that things get really bad for the short-sellers.To make good on maturing contracts, they’d have to move actual gold from various locations. But with the virus shutting down air travel across the globe, procuring a flight to transport the metal became nearly impossible.If they somehow managed to get a flight, there was another major problem. Futures contracts in New York are based on 100-ounce bullion bars. The gold that’s rushed in from abroad is almost always a different size.The short-seller needs to pay a refiner to re-melt the gold and re-pour it into the required bar shape in order for it to be delivered to the contract buyer. But once again, the virus intervenes: Several refiners, including three of the world’s biggest in Switzerland, have shut down operations.Signs of distress picked up on Friday, March 20, when the cost to swap New York futures and spot physical gold in London — the world’s biggest market — rose to about $2. Typically, this trade cost almost nothing. After the close of the next session on Monday, that premium had jumped further to $6.75.When traders in Asia entered Tuesday morning, there weren’t many sellers or offers, and suddenly they were scrambling to buy whatever gold they could get their hands on. By the time London came in, most of the market was squeezed and nobody wanted to sell.“I realized it was going to be an extremely volatile day,” Tai Wong, the head of metals derivatives trading at BMO Capital Markets in New York, said of Tuesday. “We watched this panic develop literally over the course of 12 hours. Having seen enough market dislocations, you recognize that the frenzy wasn’t likely to last, but at the same time you also don’t know how long it would extend.”By the time the panic finally subsided Tuesday night, major investors and decades-old veterans were reeling. At the peak of the carnage, potential total losses were estimated at as much as $1 billion, according to market participants. That’s even though the people involved in the trade represented less than 4% of total open interest — or the amount of outstanding contracts.Traders in need of physical metal went as far as to cold-call holders of gold bars in hopes that they’re in possession of exchange-approved metal. Some investors paid massive fees to have the remaining operating refineries to mint new gold bars, according to people with knowledge of the matter.The spread between April and June futures contracts on Tuesday jumped to $20 an ounce, meaning it cost that much more to buy metal for April than it did for two months later. That signaled more near-term demand for bullion and the need to soon have physical supply in hand.By the end of the week, though, the situation had flipped. The June contract cost almost $30 more than the April contract, suggesting that traders appetite for physical gold has subsided for now.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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What to watch on Disney+ while social distancing during the coronavirus pandemic



Subscribe to Fortune’Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.

Disney+ is rolling out in Europe just as the coronavirus has caused nations to urge citizens to stay indoors. But it has already spent months racking up subscribers in the United States, thanks to a jam-packed catalog spanning Pixar classics, the Marvel Cinematic Universe, Star Wars, National Geographic documentaries, ’90s animated cartoons, and much more.

With so many options to stream, families surfing Disney+ might find themselves understandably overwhelmed. Fortune’s here to help, breaking down the major services’ offerings into a few distinct recommendations based on whatever mood our current global crisis might have you in (all of which are completely valid). And if nothing in the Mouse’s new House strikes your fancy, here are our Netflix and Amazon Prime guides, for your continued perusing pleasure.

For a badly needed laugh:

Heath Ledger in the 1999 teen movie “10 Things I Hate About You.”
Buena Vista Pictures/Courtesy Everett Collection

10 Things I Hate About You A romantic-comedy classic you might be surprised to discover on Disney+, this ’90s touchstone featured one of the best non-clown-related performances by the late, great Heath Ledger, as the bad boy tricked into dating a smart-mouthed classmate (Julia Stiles), so that her sister (Larisa Oleynik) can get around their father’s strict dating rules and make out with the new kid (Joseph Gordon-Levitt). Twenty years later, it’s remarkable how smart and fresh its script still feels, piled high as it is with quotable one-liners and endlessly clever turns of phrase.

Meet the Robinsons A whiz-bang animated outing that heads to some surprisingly dark places—as well as a wondrously bright future of flying cars, cookie-baking grandmas, and musical gangster frogs—this 2007 effort came at a time when Disney’s animated output was seen to be running low on imagination, after a few high-profile misses. But even if that hadn’t been the case, this thoroughly hilarious and heartwarming story, not to mention its bedeviled bowler hats, would have been met with open arms.

Who Framed Roger Rabbit Pioneering and peculiar, this Robert Zemeckis–directed classic from 1988 renewed public interest in animation technology while crafting a delightfully skewed noir playground in which its mixture of animated cartoon characters and real actors could trade barbs and blows. Surprisingly, its off-kilter look holds up today; there’s something sneakily surreal yet effortless about its balancing of cartoon antics and the 1940s Hollywood sleuthing that brings private eye Eddie Valiant (Bob Hoskins) into Toontown’s heart of unlikely darkness.

Additional picks

The Emperor’s New Groove
Home Alone
The Nightmare Before Christmas

For the whole family:

Nala and Simba in the original animated “The Lion King.”

Inside Out Pixar’s most towering achievement, this 2015 animated insta-classic takes audiences inside the mind of an 11-year-old girl named Riley, introducing us to the five basic emotions responsible for informing and influencing behaviors in her everyday life. Those would be Joy (Amy Poehler), Sadness (Phyllis Smith), Anger (Lewis Black), Fear (Bill Hader), and Disgust (Mindy Kaling). Cubicle colleagues in the office of Riley’s brain, all five hover around a control console, eager to help their little human navigate the turbulence of a destabilizing move. More than just a brilliantly imagined tale and a beautifully animated family adventure, Inside Out invents a radically visual language for emotions, gently teaching it in terms children grappling with their many feelings will understand. The doors that open to deeper dialogue between children and the adults around them cannot be undervalued. Inside Out is at once an important public service and a work of true filmmaking wizardry all at once.

Sky High Too many missed this 2005 superhero comedy, but it demands revisiting in the age of the Marvel industrial complex. Refreshingly light on its feet and unironically enamored of comic-book sagas, the Mike Mitchell–directed movie split the difference between high-school comedies (especially Mean Girls and The Breakfast Club) and the save-the-world stakes found in most caped-crusader concoctions. As a result, its breezy, in-on-the-joke tone feels like more of a revelation now than it did then, amid the ongoing glut of too-big-to-fail blockbusters. And its characters—from Steven Strait’s adorably broody Warren Peace to Mary Elizabeth Winstead’s shifty upperclassman Gwen Grayson—are as memorably sub-Hughesian as ever.

The Lion King (1994) Sure, I’m highlighting this one in part as an opportunity to sucker-punch last year’s abysmal live-action remake. Is that petty? Absolutely. But there’s nothing like a soulless cash-grab from the more modern, mega-corporate Disney to remind everyone what a dream factory its animation studio once was. This emotionally potent, exquisitely drawn masterpiece still plays like Shakespeare in the Serengeti. Its songs remain the classics they always were, heartwarming and soul-stirring. And through its traditionally hand-drawn approach to realizing its world, The Lion King brings a measure of expressive, ecstatic humanity to its animal kingdom.

Additional picks

Black Panther
Atlantis: The Lost Empire
Flight of the Navigator
Frozen II
A Wrinkle in Time

To find your next binge-watch:

“The Child” and Pedro Pascal as the title character in “The Mandalorian,” which follows the travails of a lone gunfighter in the outer reaches of the galaxy, far from the authority of the New Republic.
Courtesy of Disney+

The Mandalorian The flagship series for Disney+, this surprisingly rich, impressively mounted Star Wars spinoff is a space western on the level that television hasn’t seen since Firefly went off the air. Its masked protagonist offers that perfect shade of Clint Eastwood cool, and its outer-reaches setting grants him an appropriately lawless sandbox to play in, complete with sea slugs and saloon shootouts. But let’s be real: The biggest draw of The Mandalorian (at least out of the gate, in the eight episodes currently available) is the presence of The Child, more commonly known as pop-cultural sensation “Baby Yoda,” particularly precious cargo the titular bounty hunter is tasked with protecting against a legion of former comrades in arms.

Gravity Falls A true mystery box of a kids’ series, Gravity Falls arrived now eight years ago on Disney Channel with little introduction. And across its 40 episodes—initially about the misadventures of 12-year-old twins shipped off to live with their eccentric great-uncle in a haunted Oregon outpost—it gradually revealed itself to be a much richer, smarter, more narratively purposeful tale of hidden worlds and fractured families than anyone could have guessed.

X-Men: The Animated Series Yes, the animation’s somewhat dated, but this ’90s cartoon laid the groundwork for many a serialized small-screen series to come with its uncommonly ambitious storytelling and nuanced treatment of the titular super-team. From season one’s epic saga surrounding the deadly Sentinels program to season two’s deepening of the dynamic between Wolverine and Rogue, X-Men: The Animated Series was one of the first comic-book shows to balance complex story lines with a fully fleshed-out, emotional approach to its characters. And its later-season staging of the Dark Phoenix saga, through which Jean Grey’s cosmic powers began to consume her, stands as the best telling of that arc to date, despite two separate efforts to dramatize it on the big screen.

Additional picks

The Simpsons
Star Wars: The Clone Wars
Ultimate Spider-Man
The Imagineering Story

Coming attractions:

Narrated by Natalie Portman, Disneynature’s “Dolphin Reef” tells the story of Echo, a young Pacific bottlenose dolphin who seems far more interested in exploring the coral reef and its intriguing inhabitants than learning to survive in it.
Courtesy of Disney+

Onward (April 3) Pixar’s latest opened mere weeks before the spread of the coronavirus led major theater chains across the country to close their doors. Set in a suburban fantasy world where elves and centaurs drive decal-decked vans and slack their way through high school, it may be a slighter entry from the studio that brought you Up and The Incredibles. But even middle-shelf Pixar still has magic to spare.

Dolphin Reef (April 3) Natalie Portman narrates this stunning Disneynature documentary about Echo, a young Pacific bottlenose dolphin filled with curiosity about the coral reef his pod calls home. Exploring his surroundings and bumping up against all manner of sea critters, Echo gradually learns his place in the delicately balanced ecosystem of the reef.

National Treasure (April 30) Nicolas Cage heads up a ragtag team of self-described “treasure protectors” in this 2004 adventure gem, in which the epically named Benjamin Gates (Cage) leads the FBI on a merry chase through American history after, yes, stealing the Declaration of Independence (but only because the bad guys were already going to, see!). One of the more endearingly odd highlights of Cage’s filmography, made at the unlikely peak of his time as a Hollywood leading man, it has aged like fine wine and buried riches. (And if you can’t wait till the end of April, it’s on Netflix until it shifts to Disney+).

Additional picks:

David Lynch’s The Straight Story (April 3)
Running Wild With Bear Grylls, Season Five (April 10)
America’s Funniest Home Videos, Seasons 12–19, 23 (April 24)
John Carter (May 2)

More must-read stories from Fortune:

What to watch on Amazon Prime while social distancing during the coronavirus pandemic
What to watch on Netflix while social distancing during the coronavirus pandemic
—For Jesse Eisenberg, WWII biopic Resistance and sci-fi nightmare Vivarium both hit close to home
—Sobriety is the new black: How musicians are upending the usual narrative surrounding addiction
MusiCares’s COVID-19 Relief Fund gets all-star help for donations, concerts
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.

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BSP may pump more money into system amid outbreak



THE Philippine central bank is expected to pump more money into the financial system as low lending rates fail to stimulate an economy that has been put into a standstill by a novel coronavirus pandemic.

“Quantitative easing measures, through bond purchases and other tools by central banks are faster to implement and have immediate positive effects on the economy and financial markets,” said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

They are unlike stimulus measures that may require more time through legislation, he said in an e-mailed reply to questions.

The Bangko Sentral ng Pilipinas (BSP) earlier went on a buying spree of three-month government securities worth $300-billion from the Bureau of the Treasury under a repurchase agreement payable in six months.

Both quantitative easing measures and policies are needed at a time of a pandemic, according to Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc.

“With the magnitude of an impact such as a pandemic, all monetary and fiscal means should be on deck, and nothing should be left unused,” he said.

Quantitative easing would also help boost lending, apart from the liquidity boost and rate cuts enforced by the central bank, said Robert Dan J. Roces, chief economist at Security Bank Corp.

“The additional reserves would kick-start lending, causing broad money growth to expand, and eventually lead to an increase in real economic activity,” he said in an e-mail.

Meanwhile, BSP needs to come up with a bigger and stronger scope of response to ensure the economy is better cushioned from the impact of the COVID-19 pandemic, analysts said.

The economic effects of the pandemic could be worse than the 2008 global financial crisis, UnionBank’s Economic Research Unit said in a report, adding that the government needs to boost its response.

“By mere optics, the current crop of policies may have to be augmented further and a more targeted policy support is very much needed,” it said in an e-mailed note.

The share of exports, imports and tourist arrivals in the gross domestic product (GDP) last year rose to 59.3% (from 52.9%), 68.7% (from 50.1%), and 12.7% (from 5.9%), respectively from 2007, the bank said, citing government data.

On the other hand, the share of consumption and remittances in the economy fell to 68.4% (from 71.6%) and 8.5% (from 9.7%), respectively. In absolute amount, consumption almost doubled to P6.7 trillion last year from 2007, while remittances more than doubled to P30.1 billion

“Apart from the trade’s bigger part of the economy, tourism has more than doubled in terms of GDP contribution,” according to the report.

“Aggregate consumption, the biggest contributor to GDP, and remittance inflows have continuously supported economic growth for more than a decade,” it added.

“An estimated deeper impact of the COVID-19 pandemic on the bigger real macroeconomy, compared with the economic losses caused by the global financial crisis warrants wider and more encompassing policies,” it added.

The month-long lockdown in Luzon, which contributes 70% to GDP, is expected to slow the economy. Tourism, trade and remittances are also expected to suffer because of the outbreak.

Economic managers have estimated losses of P428.7 billion to P1.355 trillion in gross value added or about 2.1% to 6.6% of GDP. The government had targeted growth of 6.5-7.5% this year.

“If we are going to take their initial assessments seriously, then the response to this pandemic should be stronger and the scope bigger,” according to the report.

The central bank cut policy rates by 50 basis points this month and will buy P300 billion worth of securities from the Treasury bureau to help fund government initiatives related to the outbreak.

On Thursday, it remitted in advance P20 billion in dividends to the National Government to help it deal with the health crisis. — Luz Wendy T. Noble

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