SCMAP Perspective is our fortnightly column on PortCalls, tackling the latest developments in the supply chain industry, as well as updates from within SCMAP. On this column, Henrik Batallones explores the importance of mobility in economic recovery.
Mobility matters
If there’s one thing that should be painfully obvious after two years in a pandemic (and of us being under some form of lockdown or another), it’s this: mobility matters.
After all, our economy took a massive hit when our mobility was severely restricted. Between forcing the majority of the labor force to work at home, and imposing a mountain of regulations dictating who can and cannot go out – remember when we weren’t so sure who was counted as an “authorized person outside of residence?” – our economy lost many opportunities that led to a drastic drop in GDP.
Now, I’m not saying we shouldn’t have restricted movement despite the rising number of cases of a disease we didn’t know much about at the time. This is just an illustration of the impact of mobility on economic activity. The government realized as much, considering how it gradually loosened these restrictions from the beginning of “community quarantine”, when those moving “essential goods” were allowed to travel “unhindered”, to the past few months, when the alert level system was tweaked to gradually allow more people to go out and do, well, more things.
It’s been almost a month since Metro Manila and several other parts of the country went under alert level 1. That means, outside of mask requirements in most establishments and vaccination requirements for some activities, we’ve been operating as if it was February 2020 all over again. At least from my view, shops have been abuzz again, almost to the point of me thinking, “aren’t there too many people here?” But with vaccination levels reaching government targets in some places, stakeholders have begun regaining some of that confidence lost in the early months of lockdown. Of course, other factors hold it back – continuing uncertainty over our ability to contain another spike in cases, geopolitical uncertainties, rising costs – but arguably we’re in a somewhat better place now.
But what about e-commerce, you ask? Doesn’t that prove that businesses can continue to operate without customers having to leave home? Well, one, the sector’s record-shattering growth in the past couple of years would not have happened without addressing the mobility issues that came up at the beginning of the lockdown. Someone needs to physically deliver the goods from port to warehouse to doorstep, after all.
Two, e-commerce is not supposed to replace the traditional retail experience; rather, it’s supposed to complement it. We’ve been looking up details of the things we want to buy online long before the e-commerce boom of the past couple of years. What e-commerce has done is enrich the experience, allowing consumers more flexibility on getting the things they want and need. More payment options? More delivery options? That’s e-commerce for you. Addressing mobility challenges makes it possible either way.
As things stand now, there are still some mobility challenges in place. Take the reduction in public transportation options in Metro Manila. While vehicle capacity should be back to 100%, limitations imposed on certain forms of transport – for example, there are fewer bus stops along EDSA – remain in place. As businesses start returning to the office, employees find it more difficult to physically return to work, or do anything else, for that matter. Frankly, our capacity to truly return to normal – old or new – isn’t in place. Again, the answers are for the medium- to long-term, especially investment in infrastructure – both for mass transport (think bus systems) and small-scale ones (think bike lanes). The National Transport Policy already says as much: we hope it doesn’t end up being an empty document.
Another mobility challenge: the increasing costs of transporting goods. The logistics sector is particularly vulnerable to this sort of shock: they bear the first brunt of higher fuel prices, for instance. While the market dictates these costs will ultimately be passed down to the consumer, what interventions can be done to minimize these effects? As I mentioned in my previous column, the threat of “stagflation” and the possibility of a cost-of-living crisis has never been as tantalizingly close as in the past fortnight.
Finally, as the e-commerce boom illustrated perfectly, mobility is not just about one person moving around; it’s also about things moving to the person wherever they may be. The struggles over whether employees should be compelled to return to the office after enjoying the delights (and tolerating the shortfalls) of working from home suggests that businesses – and regulators, in the case of BPO firms being required to occupy their offices or lose their tax breaks – need to be much more flexible now. I can go to work, and work can go to me – how do we strike the balance in a way that satisfies everyone? It may not be obvious, but this is also a mobility issue.
Ultimately, it’s about being where we want to be in the best way possible. As we poise ourselves for economic recovery, mobility matters, more than ever. Any solutions that seek to address these issues should be substantial, not cosmetic – and made for the long term.