Yearender: Unrepentant economics in 2021

IBON Foundation

The Duterte administration is weirdly fond of congratulating itself for having “game-changing” economic reforms. It first used the term to refer to tax packages crafted in 2016, then subsequently kept using it to describe all of its pet measures – infrastructure spending, rice liberalization, health financing, tax reform, national ID system, ease of doing business, and so on. It still smugly back-pats itself as 2021 draws to a close.

The choice of a sports metaphor favored by the business community is actually revealing. For the economic managers, managing the economy is really about making big business prosper most of all. It’s unfortunately not about doing everything to improve people’s lives or alleviate their distress. It’s not even really about the businesses of the little folks – micro, small and medium enterprises (MSMEs).

Throughout 2021 and to its very end, such as in slow and stingy typhoon Odette response, the Duterte administration is leaving ordinary people behind.


There was so much to do after 2020. The unnecessarily long and harsh lockdowns caused the worst economic collapse and joblessness since national accounts and labor force trends started to be recorded after the end of the Second World War.

Public health measures to contain the pandemic still should’ve been foremost – free mass testing, methodical contact tracing, and judicious quarantines. But the government grossly underinvested in all of these while reopening the economy.

Especially because vaccination was among the slowest in the region, this resulted in daily COVID-19 cases and deaths generally increasing through most of the year until September. At its worst, there were eight times as many cases and four times as many deaths in 2021 compared to the peaks in 2020.

The Duterte administration also refused to stimulate the economy beyond empty statements and inflated “game-changing” rhetoric. The end result is an economy that merely rebounded and is still a long way from recovery. As ever, it’s the poor who are worst off.

More rapid economic growth gave the illusion of recovery. This was however just inflated in coming from the record collapse and low base in 2020. The reported 4.9% gross domestic product (GDP) growth in the first three quarters of 2021 is from a huge -10.1% growth (contraction) in the same period last year. It still doesn’t make up even half of what the lockdowns cost the economy.

As it is, quarterly economic output is still just as low as it was three years ago in 2018. Most sectors have lost two to as much as 11 years of output. Transport, hotels and restaurants are among the most badly hit and only a few tycoon-dominated sectors like utilities and finance kept growing. GDP per capita is meanwhile down to 2017 levels.

Rough going

The crisis doesn’t affect everyone the same. On one hand, poverty by official standards grew 3.9 million to 26.1 million Filipinos in the first semester of 2021. This estimate of one out of four Filipinos poor (23.7%) is according to a low poverty threshold of just some Php79 per person per day though – as if Php80 a day is enough to escape poverty.

The number of poor and vulnerable Filipinos is more likely closer to 18 million families or some 78 million Filipinos. Around seven out of 10 households (69.8%) didn’t have any savings as of the fourth quarter of 2021. Self-rated poverty surveys meanwhile have some 79% of families reporting themselves as poor (45%) or borderline poor (34%).

These are huge numbers of families with little capacity to deal with economic shocks or calamities. It’s interesting how they might react to administration propaganda of “a strong and early recovery”.

Such poverty also belies claims that the labor market is improving. According to labor force surveys, employment is up 1.3 million in October 2021 from January 2020 before the pandemic. The devil however is in the details.

The most obvious understated detail is that officially reported unemployment over that same period is also up by 1.1 million to 3.5 million. Even by just this, the Philippines already has the worst unemployment in the region.

But the true rate of unemployment (TRUE) is probably even higher at around 8.2 million or more – consisting of official unemployment (3.5 million), correcting for the 2005 change in definition which cut those counted as jobless (initially estimated at 1.5 million), and unpaid family workers (3.2 million).

Yet the reported 1.3 million increase in employment is also misleading and doesn’t really indicate decent-paying work. This net employment creation since last year is wholly informal in irregular self-employment and unpaid family work. The increase reflects millions of Filipinos just trying to get by however they can, especially those who lost their jobs because of the lockdowns.

In terms of hours worked, the number of full-time workers is down by 1.4 million (to 27.3 million) while part-time workers bloated by 2.6 million (to 16 million).

By class of worker, there are 369,000 less wage and salary workers (down to 27.4 million); this includes 621,000 less work in private establishments only partly off-set by increased public sector jobs.

Laid-off workers and others seeking livelihoods made do with merely informal work which bloated by 1.7 million. The number of self-employed increased by 758,000 (to 11.9 million), employer in own farm or business by 354,000 (to 1.4 million), and unpaid family workers by 541,000 (to 3.2 million).

Amid govt back-patting on merely rebounding economic growth, much more ayuda to poor households and assistance to distressed MSMEs is critical to even just start to recover. This fixes the lockdown-induced collapse in aggregate demand especially among families – made worse by rising inflation since last year – and the corresponding closures and reduced operations of MSMEs.

Extrapolating from a trade and industry department survey, around 96,000 MSMEs closed shop while some 460,000 were only partially operating as of June 2021. This probably still doesn’t include tens of thousands more troubled but unregistered small businesses.


The majority of Filipino grappled with joblessness, falling incomes, depleted savings, and high prices. On the other hand, the country’s wealthiest continued to prosper often with timely government support.

The combined wealth of the 50 richest Filipinos recovered quickly and grew 30% in 2021 to US$79.1 billion (Php4 trillion). Among the biggest gainers were close Duterte allies – Manny Villar’s wealth grew 32% (to Php327 billion), Ricky Razon’s by 33% (Php283 billion), Ramon Ang’s by 13% (Php112 billion), and Dennis Uy’s by 7.5% (Php35 billion).

The Duterte administration supported big business through the pandemic. Publicly-funded road, bridge and rail projects under its Build, Build, Build infrastructure program boosted the property values of tycoons’ real estate projects and increased traffic to their port terminals. The Corporate Recovery and Tax Incentives for Enterprises (CREATE) law cut the corporate income taxes they pay, increasing large enterprises’ profits by some Php70 billion – and reducing government revenues by the same amount – just in 2021.

Pres. Duterte and his economic managers actually acknowledge their inaction and justify this by claiming insufficient government resources. The president is folksy and says there’s no money. The economic managers have a fancier term – fiscal consolidation.


By any name the Duterte administration’s restraint is self-defeating in so many ways. Insufficient spending on public health measures increases the risk of a COVID-19 surge if new variants are more transmissible or vaccine-resistant.

Insufficient spending on ayuda doesn’t just make families suffer disproportionately from the over-reliance on lockdowns. It also represses consumption spending and aggregate demand, especially amid worsening job scarcity.

Insufficient spending to help MSMEs stops them from reopening or expanding – tightening aggregate supply and, through less hiring and lower pay, aggregate demand as well. All of this put together makes recovery uncertain and unnecessarily protracted.

The insistence that there’s no money is actually suspect. The government had a budget of Php4.3 trillion in 2020 and Php4.5 trillion for 2021. This was supported by considerable borrowing – Php2.7 trillion in 2020 and Php2.8 trillion so far in 2021.

Little of the government budget (and debt) actually went to COVID-19 response. The budget department reports just Php570 billion in disbursements for COVID-19 under Bayanihan 1 and 2, the 2020 GAA and the 2021 GAA as of September 30, 2021. This is barely half the US$22.5 billion or around Php1.12 trillion that the finance department claims to have secured in financing for COVID-19 response as of September 5, 2021.

So what has the Duterte administration been spending on amidst the biggest public health and, arguably, humanitarian crisis in decades? So far in 2021, it has spent Php702.4 billion on infrastructure (as of October) and paid Php1.13 trillion in debt service (as of November). In either case, much more than on COVID-19 response.

This just points to the Duterte administration’s real priorities. It is just using COVID-19 response as smokescreen for hugely bloated borrowing to compensate for lost revenues because of its over-reliance on lockdowns, to keep financing its grandiose infrastructure program benefiting a few, and to keep creditors happy.

For argument’s sake, would the government spend more on relief and disaster response if it had the resources? Apparently not. The economic managers are actually expecting to have some Php260 billion more than expected in 2021 – with Php150 billion more revenues and Php110 billion less spending in 2021 than targeted.

Instead of using this to alleviate extended suffering since the lockdowns hit and which was compounded by typhoon Odette in the closing weeks of the year, it is keeping this untouched to prettify its deficit targets for the sake of creditworthiness.


Little improvement can be expected in the last few months of the administration’s term when it will be most of all concerned with navigating conflicting political ambitions in the May 2022 elections. The short-sighted drive for power will, once again, trump the long fight against poverty and underdevelopment.

The coming year is looking to be tumultuous for the economy. A surge is already likely in the opening weeks of the year and will stoke uncertainty. Minus the base effect from the 2020 collapse, the economy will return to its pre-pandemic trajectory of decline – further weighed down by high unemployment, informality, and other economic scarring. If ever, a return to power of the Marcoses in the 50th anniversary year of martial law will signify dysfunctional politics taking a turn for the worse.

The consequences for the country are unclear but will almost certainly be profound. #

2021 in review: Countdown to ending Duterte’s tyranny

By Renato Reyes, Jr.

The year 2021 was the year we started our one-year countdown to end Duterte’s tyranny and failed pandemic response. It has been a year of great resistance and important victories especially for human rights. It is also the year Duterte was thoroughly exposed for being unable to govern and lead during the worst health and economic crisis in decades.

The year 2021 will be remembered for the people’s courageous resistance to fascism, the regime’s corruption-riddled pandemic response, violations of our sovereignty and the grand scheme to effect a Marcos restoration and Duterte extenstion. 2021 was us making a stand at Helm’s Deep, a prelude to the more decisive Battle of Pelennor Fields.

#DefendUP – The start of the year saw the unilateral termination by the DND of the historic UP-DND accord. The move was met with widespread condemnation as it was seen as an attack on academic freedom. The termination was followed by a red-tagging spree so arbitrary and baseless that it caused the relief of top generals of the AFP. The UP community would bring the fight to insitutionalize the accord to Congress. UP would also take a stand against the purging of so-called subversive books from its libraries.

#JunkTerrorLaw – The people waged a long battle against the terror law, as oral arguments commenced early in the year and as the SC issued a resolution at the end of the year. While a portion of the overbroad definition was voided by the high court, most of the dangerous provisions of the terror law remain. Mass protests followed the SC decision on the terorr law, culiminating in the broad protest action on December 10, Human Rights Day. #DutertePalpak – The people marked the first year of Duterte’s lockdown and failed pandemic response with a stinging rebuke expressed through the hashtag

#DutertePalpak — The Philippines had one of the longest lockdowns in the world, the longest school closure, the biggest economic drop in the region and the last to acquire vaccines in Southeast Asia. The country went through to lockdowns this year, one in March-April and another in August-September. Milions lost their jobs and poverty increased in the second half of the year. It didn’t help that during the worst periods of the health crisis, the President was missing in action. Those who were truly fed up joined the call #DuterteResign and #OustDuterte as expressions of outrage — Health workers staged repeated protests to demand the release of long-delayed benfits. Those affected by economic displacement organized the Ayuda Network. People also demanded that Health Secretary Duque resign for his incompetence.

What was really appalling was that corruption was on full-blast during the pandemic. This year we learned of the Pharmally modus where an undercapitalized company with no track-record got billions in procurement deals because they had connections with the President and the President’s friends. Another company, Starpay, followed a similar modus and ended up failing to distribute as much as P8 billion in pandemic ayuda.

The people demanded form the regime a scientific and pro-people pandemic response. Students and teachers sought the safe return to physical classes. Poor people demanded a P10,000 aid for those displaced by the pandemic.

#CommunityPantryPH, #AyudangSapat para sa lahat – The severe economic downturn gave rise to the community pantry phenomenon which started in Maginhawa, Quezon City and soon spread to different parts of the country. Because it sought to address government neglect, the community pantry movement soon became the target of red-tagging. Organizers and supporters pushed back against the NTF-ELCAC and the PNP. The movement not only provided for the needs of the people, it also highlighted the urgent need for government to act and redirect its resources to helping the poor. It was during this time that workers returned to the streets for the first physical mobilization for May 1 since the pandemic began.

#BloodySunday – Not even the pandemic would stop the fascist attacks on the people. March 7 will forever be remebered as the Bloody Sunday Massacre in Southern Tagalog as 7 activists were killed and several others arrested during a series of police operations. The incident drew sharp condmenation here and abroad, with international human rights bodies and even the European Commission expressing alarm. Human rights groups pressed the DOJ to investigate the kilings. As of today, a criminal complaint for murder of Bayan Cavite’s Manny Asuncion has been filed against 17 policemen and this will undergo preliminary investigation. We are still waiting for the results of the other investigations.

In Central Luzon, Joseph Canlas of AMGL and KMP and Pol Viuya were arrested on trumped-up charges. In Bicol, Bayan Bicol’s Pastor Dan Balucio and Anakbayan’s Sasah Sta.Rosa were among those arrested based on questionable search warrants. Ka Joseph would die from COVID-19 while under detention. Pastor Dan and Sasah would later be released after their search warrants were quashed. Two of the HRD7, Lady Ann Salem and Rodrigo Esparago would also be released this year after the court found problems with the search warrants issued by QC executive judge Cecil Villavert. Activsits would also score legal victories in the dismissal of several trumped-up cases filed in Mindanao.

The series of arrests and the Bloody Sunday Massacre and Tumandok Massacre pushed activists and lawyers to call on the Supreme Court to stop the search warrant factories and put in place safeguards against human rights violations. The Supreme Court would come out with guidelines on the use of body cameras in implementing search and arrest warrants while clipping the powers of the Executive Judges in Manila and Quezon City.

Before the year ended, a Manila court junked a multiple murder case against several peace consultants and peasant activists that was filed in 2006-2007. The case stemmed from so-called mass graves in Leyte, where the evidence used were recycled from a previous “mass grave”. Three peasant activists were released as a result.

In New York, activists hounded Presidential spokesman Harry Roque as various lawyers groups opposed his nomination to the International Law Commission on account of the human rights situation in the Philippines.

#AtinAngPinas – Sovereignty was a key issue for 2021, earning the ire of Duterte and making him challenge fromer SC Justice Antonio Carpio to a debate on the West Philippine Sea. Duterte would eventually back down after Carpio accepted the challenge. Activsts held several protests in front of the Chinese consulate, including a June 12 caravan with protest floats. The year also saw the restoration of the VFA after the Philippine visit of US Defense Secrertary Lloyd Austin. The US continues to pour miltiary aid to the Philippines despite the horrible human rights record of the regime.

Larawan ng Altermidya.

#DuterteWakasan – As we said above, 2021 marked the start of the one-year countdown to end the Duterte regime. Calls to make Duterte accountable before the ICC grew louder as the complaint moved forward. Various groups came together and marched along Commonwealth Avenue and other parts of the country during SONA, as they called for an end to the Duterte regime. By September 21, the anniversary of Martial Law, groups were raising the call #NoToDuterteMarcos 2022. The police attempted to disrupt the protest in Manila but the people asserted their right to peaceably assemble.

By October, it was election season and progressives held protests against Bongbong Marcos’ bid to seek the presidency in 2022. The dictator’s son would team up with the Duterte’s daughter in what was seen as a Marcos restoration and Duterte extension. This tandem was supported by political factions associated with plunder and bad governance.

Leni Robredo and Kiko Pangilinan emerged as opposition candidates while Isko Moreno and Manny Pacquiao expressed their openess to getting Duterte’s endorsement after Bong Go backed out of the presidential race. Bayan called for all-out struggle against the Marcos-Duterte tandem and to prepare for possible widespread election fraud. Several groups also filed disqualification cases against Marcos before the Comelec. A caravan to mark the 5th year of the Marcos burial at the Libingan ng mga Bayani was also held on November 18.

#OdettePH – Just before Christmas, the Philippines was hit by a super-typhoon that devastated huge parts of Visayas, Mindanao and Palawan. Progressive groups mobilized to provide relief for the the victims while pressing the national government to speed up its response to this year’s worst calamity. The aftermath of Odette will be an important issue well into 2022. We lost many friends and comrades in 2021. Some died due to sickness, others died in detention or in the battlefield. We honor their memory by continuing their noble deeds. They will continue to inspire us as we face the huge challenges of 2022. It appears to be an uphill battle once more, but we do not face it with hopelessness and despair. We have learned from the past two years that collective action is such a powerful force, and that trust in the people, especially the most oppressed, will see us through the most difficult times. Let 2022 usher in a new period of hope for our people. #

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Nato Reyes is secretary general of Bagong Alyansang Makabayan.