Delayed reopening for retail, F&B: New help package on the way

Singapore

MANUFACTURING and professional-services workplaces are among those allowed to re-open under the first phase of the lifting of circuit-breaker measures on June 2, even as another package of support for firms and individuals will be unveiled next week.

The multi-ministry taskforce on Covid-19 also announced at a press conference on Tuesday that some healthcare services will resume, as well as motor-vehicle servicing, air-conditioner servicing and basic pet services. Preschools will re-open in stages, and schools will re-open with special arrangements. Visits to certain family members will be allowed, with restrictions.

Businesses that are allowed to reopen must have "maximum work-from-home arrangements", and individuals should continue to leave home only for essential services, and wear masks when outside. Most retailers will stay closed, and dining-in will still not be allowed at food-and-beverage establishments.

While noting that the cautious unlocking will reduce the risk of a relapse, Maybank Kim Eng senior economist Chua Hak Bin said it "will extend the recession well into the third quarter and delay the recovery".

About 17 per cent of Singapore's workforce is now working on-site. In the first phase, this can be raised to about a third of the workforce, though employees already working from home must still continue to do so.

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"This will allow more than three-quarters of our economy to resume normal operations," said Minister for Trade and Industry Chan Chun Sing.

If the situation stays under control in the next few weeks, Singapore can then enter a second phase of gradual resumption of more economic and social activities, said Health Minister and taskforce co-chair Gan Kim Yong.

The phased reopening seeks "to reduce the risk of a second wave of cases of infections, as many countries have experienced after they lifted their control measures", he said.

"I want to caution that we may have to tighten some measures, in a targeted way, or slow down our transition to the next phase, should there be a significant resurgence of cases."

After Phase Two, which may involve several steps and last several months, it may be possible to move to Phase Three: a "new normal".

For the June 2 re-opening, class exemptions will be issued for industries so that individual approval is not required. These include manufacturing and production; finance and insurance; wholesale trade, excluding retail shopfronts; transport and storage; and professional services. The full list is at https://covid.gobusiness.gov.sg/permittedlist/.

Only workers who need to be on-site - for instance, those who need machinery or specialised terminals - will be allowed to return. Businesses must submit details of required manpower via the GoBusiness portal within two weeks of resuming operations.

In allowing a return to workplaces, there are three considerations, said Mr Chan: First, worker health and well-being; second, that activities are in a lower-risk setting and controlled environment, for instance with limited or no interactions with the public; and third, that sectors are critical ones, globally and domestically.

In a Facebook post on Tuesday, Deputy Prime Minister and Finance Minister Heng Swee Keat said: "I understand the disappointment of some businesses and workers who will not be able to resume activities immediately when the circuit breaker ends."

For these workers and businesses, the government will help them tide over "this period of continued closure".

Mr Heng will announce details of this support in Parliament on May 26 at 3.30pm, with live television and radio coverage. This will be Singapore's fourth Budget this year.

Dr Chua said: "The extended lockdown for some sectors could risk inflicting more permanent damage, as many firms may not survive another month." He expects gross domestic product to contract by more than 20 per cent in the second quarter. Maybank's full-year forecast is for a 7 per cent fall in GDP, with downside risks given the cautious exit strategy.

The gradual reopening means a weak second quarter, but things could improve in the third, said CIMB economist Song Seng Wun: "With the phased opening, with economies around the region and the world also getting back on their feet - anchored by a more stable China, let's hope the contraction will narrow from the double digits to the single digits."

His base-case estimates are for a year-on-year fall of between 15 per cent and 20 per cent in the second quarter, easing to a fall of between 3 per cent and 5 per cent in the third.

While he expects the linchpin semiconductor and pharmaceutical segments to support Singapore's manufacturing sector, Mr Song noted that industrial production will depend on external demand and "we still see export recovery a long way away".

As for the next support package, OCBC Bank chief economist Selena Ling said its size is hard to guess "but the priorities may be slightly more medium term in that assistance is to get viable businesses and workers back on their feet again after the two months of circuit breaker". She expects a longer-term perspective in kick-starting the worst-affected industries such as travel and hospitality.

Businesses unable to open in Phase One should still prepare for future reopening, said Mr Chan. Some may need additional measures, such as safeguards in retail or food-and-beverage outlets. Others, such as those in the social-entertainment sector, may need new business models.

Among other things, Phase Two will allow F&B dining-in; reopening of more businesses, including retailers, gyms, and tuition centres; and social activities in small groups. Working-from-home will continue.

Phase Two is a "safe transition" to the new normal of Phase Three. Minister for National Development and taskforce co-chair Lawrence Wong cautioned: "Phase Three is not a return to life before Covid-19."

While cinemas and theatres may reopen and events and gatherings resume, this will be with safeguards and limited crowd sizes; baseline precautions such as mask-wearing will also continue throughout all phases.

As of noon on Tuesday, 451 new Covid-19 cases were confirmed in Singapore, including one Singaporean or permanent resident.

As more employees return to workplaces, preschools will reopen in phases, with safeguards. For primary and secondary schools, graduating cohorts will return on a daily basis. Other levels will alternate weekly between lessons in school and home-based learning. Junior colleges and Millenia Institute will have up to half their students on school premises.

Seniors must continue to take precautions, said Mr Gan.

From June 2, households will be able to visit parents or grandparents, who may only receive one visit per day by not more than two persons, who must be from the same visiting household. The elderly should not go out visiting.