Economic losses from COVID-19 cases in the Philippines: a dynamic model of health and economic policy trade-offs

The COVID-19 pandemic forced governments globally to impose lockdown measures and mobility restrictions to curb the transmission of the virus. As economies slowly reopen, governments face a trade-off between implementing economic recovery and health policy measures to control the spread of the virus and to ensure it will not overwhelm the health system. We developed a mathematical model that measures the economic losses due to the spread of the disease and due to different lockdown policies. This is done by extending the subnational SEIR model to include two differential equations that capture economic losses due to COVID-19 infection and due to the lockdown measures imposed by the Philippine government. We then proceed to assess the trade-off policy space between health and economic measures faced by the Philippine government. The study simulates the cumulative economic losses for 3 months in 8 scenarios across 5 regions in the country, including the National Capital Region (NCR), to capture the trade-off mechanism. These scenarios present the various combinations of either retaining or easing lockdown policies in these regions. Per region, the trade-off policy space was assessed through minimising the 3-month cumulative economic losses subject to the constraint that the average health-care utilisation rate (HCUR) consistently falls below 70%, which is the threshold set by the government before declaring that the health system capacity is at high risk. The study finds that in NCR, a policy trade-off exists where the minimum cumulative economic losses comprise 10.66% of its Gross Regional Domestic Product. Meanwhile, for regions that are non-adjacent to NCR, a policy that hinges on trade-off analysis does not apply. Nevertheless, for all simulated regions, it is recommended to improve and expand the capacity of the health system to broaden the policy space for the government in easing lockdown measures.