Punu, Joshua M.

Economic Development
BSA 2-2 Prof. Abraham Camba Jr.

Reaction Paper on “The Effect of COVID-19 Pandemic on the Philippine Stock Exchange,
Peso-Dollar Rate and Retail Price of Diesel”

Dr. Aileen L. CAMBA and Abraham C. CAMBA Jr.’s research The Effect of COVID-19
Pandemic on the Philippine Stock Exchange, Peso-Dollar Rate and Retail Price of Diesel (2020)
is primarily about the negative effect of the rise of cases of the pandemic on the price of stocks in
Philippine Stock Market and Peso to Dollar exchange. Using different approaches and theoretical
formulas like the Vector autoregression and MM-estimation method, they have established a
pattern which can be further summarized and leads to one central point, and that is there is a
significant amount of decrease in volume of stocks in the market and a rise of commodities like
gas. An effect on the rate of peso to the dollar was also observed.

The novel coronavirus or COVID-19 pandemic shook the world and flipped it upside
down. Due to mandatory quarantine, lockdown, and travel ban, every business that is not
essential is imposed to lock or only partially operate. This leads to a continuous decrease in
economic activities and, eventually, the stock market's crashing. Commodities like diesel and
goods became in demand that made the price volatile and increases. There is a downtrend in
stock markets wherein almost all of the PSE stocks are below average. It seems that investors
became afraid of the situation and instead pulled out all of their shares. Factories, mines, and
corporations are advised to temporarily shut down their operations to stop the further spread of
the said virus.

I strongly agree that individuals minimize their spending because I, as a consumer, also
prioritized what I need rather than what I want. In my opinion, if the virus was contained
immediately and the health protocols are masterfully implemented, the losses would be minimal,
and Filipinos can come back to their everyday life in just a matter of time. If that happened,
factories and corporations wouldn't close, Filipinos won't lose their job, and the economy can
still flow smoothly.

There is a part where the government lacks, especially preventive measures and immediate
actions to isolate initial cases. However, even this still lingers in the back of my head. I think that
they are also overwhelmed by the massive volume of infected patients and that this situation is
just still new to them as to me as well.

I have also found the data analysis tools used in the research fascinating. I'm amazed by
how these figures can be manipulated and come up with values with more significant
implications that may help make decisions and summarize the full effect of a single variable on
other variables.
 In conclusion, I highly recommend reading this research to those interested in entering
the Stock market amidst the current situation and pandemic.