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Govt stinginess worsens Filipinos’ suffering and PH economic collapse

Govt stinginess worsens Filipinos’ suffering and PH economic collapse

November 10, 2020

by IBON Media & Communications

The -11.5% growth, or contraction, in gross domestic product (GDP) in the third quarter, confirms that the Philippines is on its way to becoming the worst performing economy in Southeast Asia in 2020. The economy is saddled by the Duterte administration’s refusal to spend on aid for Filipino families and support for small businesses so needed amid the pandemic.

A fiscal response commensurate to the crisis at hand is critical but the economic managers are tying the government’s hands. The government package’s demand-side effort is grossly insufficient and even undermines its supply-side measures.

The Php3 trillion in government spending in the first three quarters of 2020 is only a 15.1% increase from the same period the year before. While this is larger than the 5.5% year-on-year increase in the same period in 2019, it is still much less than the corresponding 23.6% increase in 2018.

It remains to be seen how much more spending the administration can manage in the fourth quarter of 2020. The Bayanihan 2 law is supposedly the government’s main response to COVID in the remaining months of the year.

However, as of the president’s last report to Congress at the start of November, it appears that at most just Php28.4 billion has been spent so far. With only a little over a month left in the law’s effectivity, this is just 20.3% of Bayanihan 2’s Php140 billion in appropriations and just 17.1% of its Php165.5 billion including its standby fund. The report mentioned Php76.2 billion in allotments and releases which appears relatively large.

However, the same report did not mention any actual disbursements in major items especially for aid or support to small businesses or agriculture. These items with allotments released but not reported spent include: Php6 billion for the social amelioration program (SAP); Php13.1 billion for the COVID-19 Adjustment Measures Program (CAMP), Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) and Abot-Kamay ang Pagtulong (AKAP) programs; Php9.5 billion for public utility vehicle (PUV) programs; and Php12.1 billion for the agriculture stimulus package. While there is supposedly Php8.1 billion for small businesses, only Php893 million worth of loans were reported.

There is also little real stimulus in the proposed 2021 budget. The proposed Php4.51 trillion budget is a 9.9% increase from the 2020 budget. This is however smaller than the 13.6% increase in the programmed 2020 budget from the year before, and even smaller than the historical annual average 11.1% increase in the national budget over the 35 years of the post-Marcos era. The Development Budget Coordination Committee (DBCC) actually projects an even smaller 5.3% increase in 2022 which will be less than half the historical average.

The DBCC initially projected the economy to have -5.5% growth in 2020. To achieve this, GDP will have to grow an impossible 6.6% in the last quarter of the year which is all the more impossible with the administration refusing to give meaningful aid to millions of distressed families and small businesses including in the country’s vast informal sector.

Additional direct cash assistance to households is already pitifully small under Bayanihan 2 and virtually non-existent in the proposed 2021 budget. The record joblessness and collapse in family incomes because of the government’s poor COVID response compels much larger support to alleviate wide and deep suffering.

The economic managers also keep insisting that the CREATE law’s corporate income tax cuts will most of all benefit micro, small and medium enterprises (MSMEs). This is untrue. Large taxpayers account for an overwhelming 72% of all corporate collections as of 2019 which means that large firms will be the biggest beneficiaries of CREATE. Moreover, many MSMEs are also unregistered and in the informal sector so will not really benefit from any tax cuts under CREATE.

The International Monetary Fund (IMF) projects the economy to contract with -8.3% GDP growth in 2020. This is the worst GDP performance in the region with other countries either contracting less or even registering positive growth: Thailand (-7.1%), Malaysia (-6%), Cambodia (-2.8%), Indonesia (-1.5%), Singapore (-6%), Brunei (0.1%), Lao PDR (0.2%), Vietnam (1.6%), and Myanmar (2%).

Even the IMF’s projected 7.4% GDP growth rebound in 2021 will still not be enough to bring the economy back to its level last year in 2019. As it is, the 2020 Philippine economy is going to be as small as it was three years ago in 2017, and with GDP per capita approaching as low as it was in 2016.

The Philippines’ COVID response is the smallest among those announced by the region’s major economies, according to the Asian Development Bank’s (ADB) COVID policy tracker. This earlier reported the Philippines’ response as equivalent to just 5.8% of 2019 GDP which is smaller than in Singapore (26.2%), Malaysia (22.7%), Thailand (16%), Indonesia (10.9%), and Vietnam (10.1%).

Months into the worst economic collapse in the country’s history, the Duterte administration’s obsession with creditworthiness and the myth of a fundamentally strong Philippine economy is preventing it from taking the measures needed for real and rapid recovery. Its insensitivity is placing the burden of rebound and protracted recovery on millions of poor families and distressed small businesses. #

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Kodao publishes IBON articles as part of a content-sharing agreement.

Transport budget for infra but none for affected jeepney drivers

by Jose Lorenzo Lim

The COVID pandemic has led to massive income losses for Filipinos. The Duterte administration suspended mass transport, including jeepneys, when the enhanced community quarantines (ECQ) in Luzon and other parts of the country were declared in March. Quarantine measures have eased in general community quarantine (GCQ) areas and public transport has resumed in phases. 

The government is attempting to usher economic activity back but public utility jeepney (PUJ) drivers keep getting left behind.

Lost income and jeepney modernization program

Three months into the pandemic, the social welfare department reported some 36,200 jeepney drivers of over 200,000 nationwide getting cash aid under Bayanihan 1. Even so, many jeepney drivers only received one tranche of the Php5,000-8,000 of social amelioration. IBON estimated that around 55,000-70,000 jeepney drivers in Metro Manila each lost an average of Php26,000 per month of lockdown over the first three months of suspended mass transport for a total of Php78,000 each.

When quarantine measures eased, the Department of Transportation (DOTr) prioritized modernized jeepneys in resuming operations in Metro Manila which left most PUJ drivers still unable to operate. More traditional jeepneys have recently been allowed back on their routes but physical distancing protocols make them operate on just half-capacity and, thus, their earnings are also halved accordingly.

The PUJ sector along with other vulnerable sectors have been calling for additional aid as the COVID-19 pandemic continues to rage. However, although the government is moving to gradually resume economic activity, it is allocating less and less for emergency subsidies.

The Php5.58 billion in aid promised PUJ and transport network vehicle (TNV) drivers under Bayanihan 2, for instance, only means an average of Php116-225 per driver per day* spread across four subsequent months of lockdown since the expiration of Bayanihan 1 in June 30. The 2021 proposed national budget allocation for overall emergency aid is even smaller at just Php9.9 billion.

The DOTr announced that it was doubling the subsidy for jeepney operators switching to modernized jeepneys from Php80,000 to Php160,000. However, this is still not enough as modernized jeepneys cost around Php1.6-2.2 million each.

The slow modernization of jeepneys is also a sign that the program is failing. During the 2019 budget hearing of the DOTr, it was reported that the jeepney modernization program was only able to modernize 1.5% of its initial target more than two years after it started. Thus, the DOTr took a step back on the jeepney modernization program and said that it will allow old jeepneys on the roads provided they pass “roadworthiness” standards.

Transport budget for infrastructure

The DOTr is proposing a Php143.1 billion budget for 2021. Of this, Php112.8 billion are capital outlays for railways, seaports and airports.

Of this, Php96.2 billion will be funded by ODA. Specifically, this ODA funding will cover the rail transport program or the construction of the Metro Manila Subway Project Phase 1, North-South Commuter Railway System, and Philippine National Railway (PNR) South Long-Haul Project.

If the government was sincere about its jeepney modernization program not displacing so many drivers and small operators, it could have increased the subsidy for this program. The government counterpart funding for these 3 railway infrastructure projects is worth Php12.6 billion. This could have been an additional Php181,000 jeepney modernization subsidy if shared among 70,000 jeepney drivers in Metro Manila. 

While these expansive mass transport projects will provide faster trips across longer distances, Filipinos still rely on jeepneys as a mode of transportation for short distances or the first or last miles. Increasing subsidies for jeepney modernization is actually a win for both the government and jeepney drivers with the government taking strides towards its goal and jeepney drivers keeping their livelihood.

Keyword: Pandemic

Because of the coronavirus crisis, the Land Transportation Franchising and Regulatory Board (LTFRB) issued Memo Circular 2020-017 which only allows modernized jeepneys and traditional jeepneys under a corporation or cooperative to operate. This leaves out small jeepney operators and drivers. Unlike big corporate fleet operators, they can ill-afford the costly modernized jeepneys, or even the fees and requirements to form a cooperative. They are even less able today after months of lost incomes and depleted savings.

The government should prioritize subsidizing small jeepney drivers and operators and at least postpone costly infrastructure projects that are less urgent because of the pandemic. More railways, seaports, and airports might always seem like a good thing. However, it has always been questionable if these deliver the best economic and development returns for the huge spending on them and the increased debt taken out. Certainly, the emerging needs of vulnerable sectors because of the pandemic should be a more pressing use for scarce funds.

The Duterte administration should support drivers and operators with emergency subsidies for upgrading or replacing their units to meet safety, health and environmental standards. Getting them back on the road will contribute to spurring economic activity. It will also increase the mobility of the working people who are the most crucial elements in economic recovery. #

Pahayag ng Makabayan Bloc sa badyet ng Office of the President

Nag-rali ang mga kasapi ng Makabayan Bloc sa Batasan noong Lunes, Setyembre 14, upang tutulan ang anila’y napakalaking badyet ng tanggapan ni Pangulong Rodrigo Duterte samantalang mababa ang badyet para sa kalusugan sa gitna ng krisis ng coronavirus.

Ang pagkilos ay kasabay ng deliberasyon ng House of Representatives Committee on Appropriations sa lampas walong bilyong piso para sa Office of the President sa susunod na taon, higit kalahati nito ay intelligence fund na maaring hindi na iulat sa Commission on Audit. Buong-buong inaprubahan kalaunan ang badyet ng pangulo.

Philippine health recovery not a priority for Duterte administration

by Maricar R. Piedad

Deliberations on the proposed Php4.5-trillion General Appropriations Act (GAA) for 2021 have begun. This budget will be crucial for the Philippines to fast track recovery from the worst health and economic crisis in its history because of COVID-19. But it is not at all about health recovery as the Duterte administration hypes.

In the National Expenditure Program (NEP) for 2021 submitted to Congress, the government actually defunds areas that are vital to boost the public health system in the time of a pandemic. These include those for disease surveillance, health infrastructure, and human resource capacity building. Despite the glaring health and economic needs exposed by the COVID-19 pandemic, the NEP for 2021 reflects how the government sticks to its old priorities such as transport infrastructure and defense, which are not what the situation urgently requires.

Making the health system weaker

The effect of COVID-19 on the health and livelihoods of the Filipino people is more severe compared to other nations. While countries around the world are starting to recover from the pandemic, the Philippines has the most total and new COVID-19 cases and the most deaths per million population in East Asia.

COVID-19 is stretching the health system’s capacity and the vaccine for the coronavirus is still far from the people’s reach. It is only rational and urgent to ensure that resources to further enhance and capacitate the country’s health system are made available. However, the government is not prioritizing this.

Bayanihan 2, a stimulus package aiming to cushion the effects of the pandemic, allots only Php30.5 billion for health-related responses to COVID such as tracing, treatment, support for health workers, health facilities, and pandemic research. There is also a Php10-billion standby fund for testing, which is paltry according to health advocates.

The proposed 2021 budget for the Department of Health meanwhile has been increased from Php104 billion in 2020 to Php131.7 billion in 2021 or a Php27.7-billion hike. But allotments for some of the most essential programs for health recovery have been slashed.

Selected Health Programs, 2017-2021

The budget for the Epidemiology and Surveillance program, which is important to control the spread of diseases through timely data and research, was halved in 2020 – from Php263 million in 2019 to Php116 million this year. A larger budget would clearly have helped strengthen preventive measures versus COVID-19 in the country at the beginning of the year when the first cases emerged. Yet despite the proven importance of this program, the government even proposes to reduce it further to Php113 million in 2021.

The proposed budget allocation for the Health Facilities Enhancement Program (HFEP), which ensures the maintenance and quality of public healthcare facilities, also decreases this year. HFEP is actually being allocated lower and lower budgets each year as hospitals are obliged to generate their own income to fund infrastructure-building and maintenance. From an Php8.4 billion budget for HFEP in 2020, the proposed budget for 2021 is only Php4.8 billion, or almost 50% less than its current budget.

The National Reference Laboratories are vital in detecting and testing COVID-19 cases and other emerging diseases. But the proposed budget for these decreases from the present Php326 million to Php289 million.

Even though one of the main issues during this pandemic is poor data management and reporting by the DOH, the proposed budget for Health Information Technology drops massively from Php1.2 billion in 2020 – which it failed to use properly – to Php97 million, or a 92% decrease.

The proposed budget allocation for Human Resource for Health (HRH) deployment increases, but the program that ensures that the health workforce is equipped with proper training and knowledge to deal with different medical situations is decreased. The budget for HRH Institutional and Capacity Management has been cut by Php15 million.

The DOH’s COVID-19 specific programs – the Php4.2 billion Health System Enhancement to Address and Limit COVID-19 and the Php1 billion Philippines COVID-19 Emergency Response Project – are mere drops in the country’s budget bucket.

What government cares for

The Duterte administration’s proposed budget for 2021 shows how little it cares for the health and socioeconomic recovery of the Filipino people. The biggest chunk of the proposed 2021 budget goes to the Php1.1 trillion “Build, Build, Build” program taking up 24% of the total budget. Only a tiny fraction of this goes to health infrastructure with the DOH getting just Php2.3 billion or barely one-fifth of one percent (0.2%) of total infrastructure spending.

Many of the infrastructure projects lined up – such as big-ticket railways and roads funded with China and Japan loans – are not as urgently needed as facilities for health and more direct measures to support the socioeconomic recovery of distressed households and small businesses.

The government is apparently only willing to spend Php203.1 billion on its so-called universal health care program including to respond to the pandemic – this is just 4.5% of the total proposed budget for 2021. As it is, the Php1.1 trillion infrastructure budget is almost 5 ½ times larger.

The proposed budget for the Department of Public Works and Highways (DPWH) is Php667.3 billion or over five times that of the DOH. The government will allocate Php7.6 billion for primary roads’ maintenance and repair alone which is almost three times the size of the DOH budget for the COVID-19 vaccine, at only Php2.4 billion.

The DOH’s proposed Php203.1 billion budget – even including the budget for PhilHealth – ranks only 5th among department budgets in 2021. This is because, amid the unprecedented public health emergency, the DOH’s proposed 2021 budget is only a Php25.4 billion increase from the GAA this year.

The DPWH gets a much bigger Php228.4 billion increase to Php667.3 billion, as does the Department of National Defense (DND) which gets a Php29.4 billion increase to Php209.1 billion. The military and police forces will still be receiving more funds than the health sector.

The Duterte administration’s proposed 2021 budget bares how it is not changing its priorities despite the marked worsening of the Philippine health situation. Even before the COVID-19 pandemic, infrastructure has been consistently a priority over the health sector which, if anything, is even being distorted and privatized. The people’s health and strengthening the public health system are among the most immediate areas needing attention which, apparently, the administration simply refuses to give. #

‘Government will only be putting millions of children, teachers, education support personnel and their families at risk’

“Addressing classroom shortages, large class sizes, lack of adequate water supply, working comfort rooms, ensuring health, and (hiring additional) utility personnel in schools (must first be accomplished). The lack of gadgets and access to a strong internet connection for the new modes of teaching under the ‘new normal’ for schools would require additional budget for education, not cuts.

Without addressing these safety measures and lack of infrastructure for education, government will only be putting millions of children, teachers, education support personnel and their families at risk of getting the COVID-19 virus.”

Rep. France Castro
ACT Teachers’ Party
Assistant Minority Leader,
House of Representatives

Jo Maline Mamangun

2020 national budget, hiniling na i-sentro sa serbisyo at kabuhayan

Hiniling ng iba’t-ibang grupo na ilaan sa serbisyong panlipunan at pang-matagalang kabuhayan ang nakasalang na pambansang badyet ng pamahalaan sa susunod na taong 2020.

Sa isang press conference noong Martes, 26 Nobyembre, isiniwalat nila na ang maling paggamit ng pondo ng bayan tulad ng kontrobersyal na hosting ng Southeast Asian Games at maging ang “Build Build Build” program ng administrasyong Rodrigo Duterte na anila’y para lamang sa madalian at di permanenteng ganansiya.

Sa halip, ayon sa mga grupo, ay dapat dagdagan ang badyet para sa edukasyon, kalusugan, agrikultura, at iba pa. (Bidyo ni Jek Alcaraz/Kodao)

Hospital of Our Hope, System of Our Despair

by Gene Nisperos, MD

The Philippine General Hospital is the face of our perpetually neglected public healthcare system. As the biggest tertiary training hospital in the country, it provides specialized and very specialized services and training. It is also the end referral hospital of other public hospitals. Pero ito din ang Ospital ng Bayan na sadyang pinabayaan.

The ever-increasing number of patients in PGH reflects the country’s worsening social conditions. The poor’s limited access to basic services, aggravated by their absent economic power and the prohibitive costs of healthcare, all lead them to this single health institution.

Thus, we need to take a close, hard look at the state of PGH and its patients.

A casual stroll from the PGH Out-Patient Department (OPD) to the wards can break your heart.

Patients. Families. All are trying their best to get a measure of the health services they need, never mind deserve. Some are eating their baon along the sidewalk. Others are desperately trying to make their patients more comfortable under the sweltering heat and crowd. Many have been waiting in line since 3-4am just to get in.

A walk through the Emergency Room (ER) can break your spirit.

Everywhere, quietly, patients find small consolation in cold metal beds, in stretchers, in wheelchairs, or even in monobloc chairs. They fill up any unpeopled space that they can find and comfort is a luxury that they will readily forego if only to get seen and treated.

And all of them want to be seen, need to be seen. Many have travelled long distances hoping to be treated for their various infirmities. But the hospital is always shorthanded. The 4000-strong health personnel are almost always never enough for the deluge of patients that come daily.

The ER, currently under renovation, only has a 25-bed capacity. But its daily census is easily north of 150. In the last three years, PGH’s patient census has steadily increased from 586,000 to 647,000 per year.

There are patients who should be in the intensive care unit (ICU) but are still in the wards. There are patients who should be in the wards but are still in the ER. There are patients in “ectopic beds”, or beds in departments other than that where the patient should be confined in.

There is just not enough beds or space. There is just not enough health personnel.

Yes, even the best that PGH can provide remains too little. And everyone can do with much more.

Yet in spite of these, for 2020, Congress deemed it fit to cut the PGH budget rather than increase it. Apparently, for our honourable legislators, the less than P3 billion per year allocation is enough and there are more pressing matters to fund, like the P100 million pork barrel they will each get.

To provide its patients with the barest minimum, PGH needs about P5 billion per year. So why give the hospital much less than what it needs to operate?

Limited funds nga daw kasi.

Currently, around two-thirds of PGH’s budget goes to pay for its personnel, whose numbers cannot match those of the patients, even with medical and health sciences students taking up the cudgels.

Because of insufficient budget, the hospital cannot hire the additional health human resources it needs. It cannot even regularize the contractual employees it has. Worse, it is looking to further subcontract the work being done by institutional/utility workers, the “manongs” who brings patients around the hospital for their labs, x-rays, and what not.

About 25% of PGH’s budget goes to its operations, which directly benefit its patients. Even then, supplies and meds are often lacking so patients need to buy these outside.

Some laboratory exams are unavailable so these have to be done outside as well. Basic equipment, like respirators, have also been subcontracted to private firms and their use have to be paid for by patients.

All of these amount to out-of-pocket expenses that are catastrophic for an already impoverished patient.

To be fair, the PGH Administration exerts effort to augment the hospital’s funds. Donations from private individuals and/or corporations help stretch the meager resources. But at the end of the day, patients and health personnel alike, including students, shell out money to cover for what the hospital lacks.

Either that or they become mute witnesses to the consequences of unmet health needs: morbidity if not death.

PGH supporters calling for a higher budget for the country’s most important teaching hospital.

When government refuses to give enough funds, everyone suffers. Because in PGH, the need will always be much greater than what can be given. Sadly, this is being done to almost all public hospitals: they get less than half of the budget they need but are expected to operate fully, with VERY LITTLE support.

When health officials grow tired of asking enough to provide for what patients deserve, what is given is not even enough to provide for what patients need. When health officials console themselves by asking just enough to provide for what patients need, what is given is barely enough, so that patients expect even less.

This is government policy and it must be changed. THIS is the rotten system that refuses to see healthcare as a public good.

It is therefore right and fair to demand for a bigger budget for health and for PGH.

Every year, PGH should get P10 billion to give its patients the care THEY DESERVE. The hospital should not have to rely on the kind heart of philanthropists or on corporate social responsibility just to keep itself financially afloat. The hospital should NOT EXACT any more from the pockets of its patients and its staff.

The amount also enables PGH to hire and regularize enough hospital personnel to meet the ever-increasing demands of healthcare. The money affords the hospital enough to provide essential supplies and medicine, and ensures that the laboratory and diagnostic equipment are working.

If PGH is given the budget that it deserves, then it can fulfill its most important role: enable the poor and destitute to exercise, and maybe even experience, their right to health. #