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Govt stinginess worsens Filipinos’ suffering and PH economic collapse

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.

Swept away – Philippine agriculture bears wrath from government neglect

by IBON Media & Communications

Government’s long-time neglect of the country’s agriculture sector has been disastrous to small producers. The recent series of super-typhoons – Quinta, Rolly and Ulysses – has highlighted this.

The country’s geophysical characteristics as well as geographic location make it exposed to natural hazards. What makes it extremely vulnerable to risks is government’s lack of relevant policies to strengthen the agriculture sector and the larger economy, including policies and practice of disaster risk reduction and management (DRRM).

Fresh damage

According to a combined bulletin by the Department of Agriculture-Disaster Risk Reduction Management Operations Center (DADRMMOpCen), Quinta left damages to agriculture amounting to Php2.7 billion, with a volume production loss of 149,475 metric tons (MT) in Regions I, II, III, CALABARZON, MIMAROPA, V, VI, and VIII. This affected 57,858 farmers and fisherfolk with 96,474 hectares of agricultural areas.

Still reeling from this devastation, the regions again felt Rolly’s wrath and sustained Php5.79 billion in damages and losses affecting 48,682 farmers and fisherfolk in 127,298 hectares of agricultural areas. The volume of production loss was at 177,091 MT. The National Disaster Risk Reduction Management Council (NDRRMC) further reported that Rolly damaged 170,773 houses and infrastructure worth some Php12.9 billion.

Then, Ulysses happened, leaving 73 dead, 24 injured, and 19 missing in Regions II, CALABARZON, V, and CAR. Damages to agriculture are estimated to be worth Php4.2 billion, to infrastructure some Php6.1 billion, with a total of 67,391 houses partially or totally destroyed. Affected were 102,500 farmers and fisherfolk in 99,660 hectares of agricultural areas. Production loss in commodities including rice, corn, high value crops, fisheries, livestock and poultry, irrigation facilities, and agricultural infrastructures was estimated by the DA to be at 167,385 metric tons (MT).

Some 62,220 hectares planted to rice alone sustained damages and losses amounting to Php1.98 billion with volume of production lost at 124,437 MT. Some 14,132 hectares planted to high variety crops (HVC) areas sustained Php907.7 million worth of damages with volume of production lost at 35,487 MT. As for areas planted to corn, up to 23,308 hectares were affected, with volume of production lost at 7,461 MT amounting to Php371 million. In the fisheries, some Php712 million was lost in terms of affected fin fish, milkfish, hito, tilapia, carp, crabs, and prawns. Livestock and poultry sustained Php51.69 million in damages affecting 72,146 heads. Some Php11.9 million were damaged or lost in terms of irrigation and agriculture facilities.

Quinta and Rolly damages and losses totaled to Php8.46 billion affecting 106,540 farmers and fisherfolk in 223,772 hectares. Volume of production lost reached 326,566 MT. Combined estimates of damages and losses in the Philippine agriculture sector due to typhoons Quinta, Rolly and Ulysses are estimated to have reached some Php12.4 billion to date.

The devastation in agriculture was also grave particularly for Catanduanes province, a top producer of abaca in the country, which is second biggest world producer of the cash crop. According to the Philippine Fiber Development Authority (PhilFIDA), the province accounted for 30% of the country’s annual abaca output. But then Rolly battered Bicol and other abaca-growing regions – CALABARZON, MIMAROPA, and Eastern Visayas, resulting in Php1.2 billion worth of farm damages. The 30% decline in abaca output due to the typhoon as per the estimate of PhilFIDA would land at only 50,000 metric tons (MT) of produce, the crop’s lowest in 20 years. Using PhilFIDA estimates of Php1,000 income for every 10 kilos harvested, this decline is equivalent to a Php2.1 billion loss in farmers’ incomes.

What preparedness?

Government’s DRRM plan, actual implementation, recovery strategy, and even budget allocation of calamity funds are all telling – there is little acknowledgment of the Philippines being a calamity-prone country. It is no basis to say that the country is indeed disaster-prepared.

The Philippines ranks 9th among countries with the highest disaster risk index according to the World Risk Report of 2019. An average of 20 tropical cyclones enter the Philippine area of responsibility annually. Yet the budget allocation for disaster risk reduction in 2020 of Php16 billion declined from the already meager Php20 billion or 0.5% share in the 2019 national budget. The NDRRMC is again set to get Php20 billion in lump sum calamity funds in the 2021 national budget. But it remains a mere 0.4% of the total budget.

Components of the National Disaster Risk Reduction and Management Plan (NDRRMP) 2011-2028 are: disaster prevention and mitigation, disaster preparedness, disaster response, and disaster recovery and rehabilitation. This should mean building massive evacuation and shelter infrastructure, for instance. This should also mean making available competent education, health, and housing, and providing sufficient energy, water, communication and transport mechanisms that can withstand any weather hazard. For a largely agricultural country, it should also mean the availability of crop insurance, food stocks, production support at all times, whether or not during recovery, and other measures that ensure farmers, fisherfolk, and farmworkers’ continued sustenance when calamities strike. Neither the NDRRM Plan nor the DARRMOpCen explicitly mandate these as part of the mitigation and preparedness steps of DRRM.

The NDRRMC reported Php115 million worth of assistance provided to Ulysses victims. The DA assured Php400 million in Quick Response Funds and Php300 million worth of emergency loans with zero interest and no collateral, payable in 10 years under the Survival and Recovery (SURE) Loan Program of Agricultural Credit Policy Council (ACPC) for farmers and fishers affected by Quinta and Rolly. The agency has also assigned the Philippine Crop Insurance Corporation (PCIC) to provide insurance protection to farmers against losses arising from various calamities. Those insured under the PCIC are set to receive Php10,000-15,000 in insurance claims for damaged farm equipment, fishing boats, and gear. But this measure is premium-dependent and ties impoverished farm producers to indebtedness.

PCIC coverage is quite limited and leaves millions of agricultural producers behind. PIDS explains that the amount of cover is based on the cost of production inputs specified in the farm plan and budget submitted by the farmer upon application of insurance. Insurance premium rates vary based on the type of insurance cover, risk classification, type of farmer, and type of insurance cover availed. Premium for high value crop insurance is solely shouldered by the farmers, ranging from 2-7% of the total sum ensured. Premium rates for fisheries are solely determined by the PCIC.

According to latest available Philippine Statistics Authority (PSA) and PCIC 2018 figures cited by the Philippine Institute for Development Studies, only 2.2 million farmers in 1.8 million hectares are insured. This is a small number compared to the over 10.9 million farmers, farmworkers and fisherfolk in the government’s Registry System for Basic Sectors in Agriculture or RSBSA. It was also noted that while a huge chunk or 1.1 million of listed farm parcels reported by the Census of Agriculture and Fisheries (CAF) were less than 0.5 hectare in size, the penetration rate of the PCIC in these holdings was quite low compared to parcels of bigger sizes.

Long-time neglect of agriculture

Even given the backdrop of being a natural hazard-prone nation, government action for the farming and fisheries sectors has long-been either too little or too detrimental. Weather disturbances have even gotten worse over the years due to climate change, increasing further havoc on the country’s agriculture communities.

Philippine agriculture is in crisis, growing at an average 2.1% in 2017-2019, its slowest pace after 70 years of growing at 3.5% annually on the average. In the same period the sector lost over one million jobs. In the third quarter of this year, the sector grew only by 1.2%.

In 2018, the country’s agricultural trade deficit was the largest in history, and in 2019 the Philippines began importing its staple food rice.

However, despite the sector’s decline and disaster vulnerability, the budget for agriculture and agrarian reform averaged just a measly 3.6% of the total national budget annually from 2017-2019. This has been reduced further to 1.7% in 2020 and 1.6% for 2021 under the Duterte administration.

Calamity-battered Bicol

An example of the vulnerability and crisis of the country’s agriculture is the Bicol region. The region is prone to natural calamities such as typhoons, volcanic eruptions, drought and flooding, almost on a yearly basis. It is among the areas whose agriculture sector was hard-hit by the recent consecutive typhoons. The several calamities that have torn through the region in recent years resulted in billions of pesos in agricultural damage.

These include, for instance, tropical depression Usman which left Php1.6 billion worth of agricultural damages in Bicol at the end of 2018. Typhoon Tisoy, which hit the country in early December 2019, resulted in over Php1.7 billion worth of agricultural damages in the region, affecting its major crops. Bicol’s agriculture has also suffered crop losses from the El Niño drought last year and its abaca sector’s battle with the Abaca Bunchy Top Disease.

The region’s agriculture sector is now reeling from damages wrought by Quinta (Php395.8 million), Rolly (Php3.6 billion), and Ulysses (Php168.5 million).

Bicol’s abaca and coconut industries have not yet recovered from the havoc wreaked by Typhoon Tisoy. In the second quarter of the year, coconut production and abaca production both registered negative growth rates of 8 and 4 percent, respectively, from the same period last year.

Build Back Better” vs. inclusive response

The region’s disaster risk reduction bodies undertook early warning measures such as preemptive evacuation and advanced harvesting during typhoons Usman and Tisoy. In a way, mitigation was leveled-up. Yet, the Bicol Region’s agriculture sector, as with the rest of the country’s, was left vulnerable to destruction. The DADRROpCen practices the integration of DRR measures in the plans of government agencies. But like the NDRRMC plan, it is weightier on response, relief and recovery rather than building the core capacity of the agriculture sector. Making it flourish and able to stand on its own is not part of the plan.

The bottomline of the Philippines’ disaster risk reduction plan is the global-inspired “Build Back Better” which has been used in various calamities worldwide but saw big contractors and businesses taking the upper hand in rehabilitation and recovery. This is instead of focusing on really strengthening communities per se in terms of ensured rights to basic needs including food and jobs, adequate standards of living, a balanced ecology, ample services and development. These would be what will forge the capacity to withstand disasters.

In the case of agriculture, policies destroy rather than hone the sector’s own contribution to building this capacity. Decades of subscribing to global market dictates have crippled the agriculture sector and reduced it to being a supplier of cash crops, now being enhanced by the Plant, Plant Plant program. The National Land Use Act will accelerate the conversion of agricultural lands into commercial ones. Rice import liberalization meanwhile is destroying farmers’ incomes with falling palay prices and results in the shutdown of mills.

Through these policies, the government pushes Philippine agriculture off the cliff and keeps our farmers poor and vulnerable to calamities. Government lacks the sense of urgency to aid the calamity-stricken agricultural producers and only promises some farm inputs and limited financial assistance, not to mention in the form of burdensome loans. This jives with its non-interest to develop the sector other than for what the global market needs it to be.

The only way the country can really be disaster-prepared would be if risk reduction and response followed a comprehensive plan across pre-calamity and calamity scenarios. This needs to start with strengthening the heart of the economy and that is Philippine agriculture and manufacturing. Agriculture programs from the most token to those that destroy the industry and Filipino producers’ livelihoods must be stricken out especially liberalization and commercialized and profit-oriented insurance and credit-facilitation.

Land should be free for the tillers and not converted to non-agricultural use; the decision on how to make it productive theirs; give them substantial farm subsidies and direct farm facilities, machine and inputs support; and ensure their social protection. Especially during a pandemic such as the one that grips the nation and the world now, sustained financial assistance and direct support for producers is very much in order.

Governance that decides to sovereignly boost agriculture this way will be the same one that will forge policies and infrastructure for domestic industry, a healthy environment, people’s rights, and funding development, which are certain foundations of people-centered disaster preparedness. #

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

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.

Bayanihan 2 and 2021 budget leave millions of unemployed behind

by IBON Media & Communications

The latest July 2020 labor force survey (LFS) figures confirm the inadequacy of the Duterte administration’s response to what is developing into the worst jobs crisis in the country’s history. The Bayanihan 2 and the proposed 2021 national government (NG) budget give the appearance of assistance but will leave millions of jobless and distressed Filipinos behind. The level of aid for the people is much too small for the magnitude of the crisis at hand.

This year will likely see the biggest contraction in employment in the country’s history. Employment contracted by 1.2 million in July 2020 from the same period last year, falling to 41.3 million employed according to the latest LFS. This comes after the reported 8.0 million year-on-year contraction in April 2020. For the whole of 2020, IBON estimates employment to fall by 2-2.5 million from last year. This will far surpass the previous record employment losses of 833,000 in 1980 and 821,000 in 1997.

The crisis of joblessness is unprecedented. The official unemployment rate of 10% in July 2020 brings the average of the first three rounds for the year so far to 11% which is not likely to improve much even when the October round results come out. The 4.6 million officially reported unemployed in July 2020 is already 2.1 million more than in the same period last year.

Adding 4.6 million unemployed and the 7.1 million underemployed means that the government acknowledges at least 11.7 million Filipinos jobless or looking for additional work to increase their incomes in July 2020. IBON however has long pointed out that official unemployment figures since 2005 tend to underestimate the real number of unemployed Filipinos by around 2-2.5 million annually.

Moreover, the labor department has already reported 604,403 overseas Filipino workers seeking assistance of which only a little over one-third (237,778) have been helped so far. In a press briefing today, they also said that they expect another 200,000 to need help until the end of the year.

Official figures likely underestimate the extent of the problem. However, even going by these, the inadequacy of the government’s response to directly help the people is clear.

Bayanihan 2 promises Php5,000-8,000 in emergency cash subsidies and other assistance for poor households, displaced workers and OFWs. However, only Php19.2 billion is budgeted for cash subsidies and other assistance which is just 3.8 million beneficiaries at most. The aid will also just be a mere Php37-60 per person per day for a month or even less than the official Php71 poverty threshold.

In the proposed 2021 NG budget, there is no provision for substantial emergency cash subsidies beyond existing social welfare department programs such as the Pantawid Pamilyang Pilipino Program (4Ps) and smaller programs. Indigent pensioners are not getting any increase in their pensions. Even the labor department’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers and Government Internship Program (TUPAD-GIP) program gets just a meager Php3.2 billion increase to Php9.9 billion.

Micro, small and medium enterprises (MSMEs) are also not getting the focused assistance that they need. There are 997,900 MSMEs employing 5.7 million workers aside from hundreds of thousands more unregistered establishments with millions more workers. Formal sector establishments had over Php21 trillion in expenses in 2018. In July 2020, the DTI said that 26% of companies they surveyed closed operations and another 52% were only partially operating. Those partially operating also said their income was down by 90 percent.

The Php77.1 billion Bayanihan 2 budget for production and enterprise support will cover only a small fraction of workers in MSMEs, and is even shared with farmers and fisherfolk. In the proposed 2021 NG budget, the MSME Development Program is even getting a Php416 million budget cut to just Php2.3 billion. The budget of the Small Business Corporation (SBC) stays the same at just Php1.5 billion.

In their press briefing today, the economic managers projected a 12% unemployment rate in 2020 (mid-point of the Development Budget Coordination Committee estimate of 11-13%) improving to 6-8% in 2021 then 4-5% in 2022. These optimistic projections cannot materialize without substantially increasing aggregate demand through meaningful cash transfers to millions of distressed households and more support to hundreds of thousands of struggling MSMEs.

Tens of millions of Filipinos and their families will continue to suffer for years without a genuine stimulus program overriding the misguided fiscal conservatism and reckless optimism of the economic managers. #

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

PH ‘stimulus’ smallest in region

Philippine spending in response to the COVID-19 pandemic is among the smallest in the region, said research group IBON.

The narrow-minded obsession with ‘creditworthiness’ stops the government from taking the urgent steps needed to restore livelihoods and save the economy. The group said that having economic managers dominated by finance people rather than development experts is the biggest obstacle to real recovery.

According to the International Monetary Fund (IMF) Policy Responses to COVID-19 tracker, the fiscal policy response of the Philippines is equivalent to just 3.1% of its gross domestic product (GDP).

IBON noted that this is the smallest among the major economies of Southeast Asia. This is less than in Singapore (19.7%), Vietnam (13.3%), Thailand (9.6%), Indonesia (4.4%) and Malaysia (4.3%). It is also less than half of the global average of around 6.2% of GDP.

The Philippines’ ranking does not change even if the Bayanihan 2 bill recently approved by the Senate is passed into law, said the group.

The proposed Php140 billion stimulus program is worth just 0.7% of the GDP and will bring the country’s fiscal response only to 3.8% of GDP.

The IMF notes that country data are not always strictly comparable but the figures are nonetheless indicative.

IBON said that upcoming national government (NG) budgets meanwhile see the smallest post-crisis ‘stimulus’ increases in decades, further undermining economic recovery.

Department of Budget and Management National Budget Memorandum No. 136 only foresees a 5.7% budget increase in 2021 falling to an even smaller 1.8% increase in 2022, despite the country facing the worst economic decline in its history in 2020 because of the pandemic.

The budget increase in 2021 would be the smallest in a decade and in 2022 the smallest in over 30 years.

These increases also compare unfavorably with budget increases after the 1997 Asian financial crisis and 2008 global financial and economic crisis.

After the Thai Baht collapsed in 1997, the NG budget rose by 9.3% in 1998 and then by 8.0% in 1999. After the Lehman Brothers firm collapsed in 2008, the NG budget rose by 9.1% in 2009 and by 2.7% in 2010.

The economic managers have been blocking larger stimulus packages proposed by Congress since at least May, the group said.

The House of Representatives and Senate took up more meaningful stimulus measures worth at least Php1.3 trillion or more but stopped when the finance department told them to because these were ‘unfundable’ and ‘unsustainable’.

These measures would have been closer to the global average.

Among others, this also affirms that the so-called power of the purse of Congress is illusory and how the president and executive branch are actually in complete control of the country’s finances. The president can implement a bigger stimulus package if he wants to, said the group.

The obsession of the economic managers with ‘creditworthiness’ is misplaced, said IBON.

Thailand, Vietnam and Indonesia have lower credit ratings than the Philippines but are spending more to respond to and recover from the pandemic. Financing can be raised by reallocating from less productive infrastructure and debt service, and by a more progressive tax system with higher taxes on large firms and the wealth of the country’s super-rich.

The magnitude of the country’s response has to be commensurate to the crisis at hand. This should span health measures, continued cash subsidies to improve household welfare and boost aggregate demand, and support especially to Filipino and domestic market-oriented micro, small and medium enterprises, said the group. #

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

Gov’t should check SAP’s gross failure as COVID cases rise – IBON

by IBON Media & Communications

Research group IBON said that the Duterte government should correct the huge shortfall of the Social Amelioration Program (SAP) especially amid a continuously increasing number of COVID-19 cases.

Aside from getting the stingy first tranche of emergency subsidies, 9 million of the 18 million target recipients and 1.5 million more “wait-listed” beneficiaries will no longer get the second tranche.

This is as the government limits distribution to residents in enhanced community quarantine (ECQ) and modified ECQ (MECQ) areas. Yet, the country reaches a record of 36,438 cases as of June 29.

According to the recently expired Bayanihan law, the Philippine government was supposed to provide emergency subsidies to low-income families and vulnerable sectors whose jobs and incomes were disrupted by the lockdown.

Support amounting to Php5,000-8,000, depending on regional minimum wage rates, was to be given to some 18 million poor households for two months.

The first month-tranche came in the duration of three months, making the already stingy aid even much delayed.

The second month-tranche, on the other hand, according to an inter-agency joint memorandum, will be distributed now only to beneficiaries in the ECQ and MECQ areas.

This reduces the original 17.7 million target beneficiaries to just 8.6 million households in the following areas: Central Luzon except Aurora, the National Capital Region (NCR), Calabarzon, Benguet, Pangasinan, Iloilo, Cebu province, Bacolod City, Davao City, Albay province, and Zamboanga City.

This leaves 9.1 million of the original target SAP beneficiaries affected by the three-month lockdown to make do with the meager first tranche, said IBON. This is even if economic activity cannot fully resume in now general community quarantine (GCQ) and modified GCQ areas.

Considering that Php98.3 billion has been distributed to 17.5 million households as of June 27, IBON computes that the first tranche averages out to Php5,617 per family.

Without the second tranche supposedly for the second month of lockdown, the subsidy amounts to just Php53 per family or Php12 per person per day for the past 106 days since the COVID-19 lockdown started.

Even those who will receive the second tranche will still end up stretching a small amount over three months of lockdown, IBON said.

Some Php6.79 billion in second tranche aid has already been distributed to 1.3 million recipients, or an average of Php5,047 per family.

Combining both tranches, these 1.3 million families each got only a total of Php10,664.

This amounts to Php101 per family or Php23 per family member for each of the 106 lockdown days.

IBON also noted that 5.28 million low-income households even continue to wait for the first tranche of SAP.

This figure includes the remaining 278,206 beneficiaries out of the target 17.7 million according to Department of Social Welfare and Development (DSWD) data as of June 27.

The rest are the families declared by the DSWD in mid-May as also eligible to receive aid but have not received any.

Yet, the government retracted and said that only 3.5 million of the wait-listed beneficiaries in MECQ and ECQ areas as of end-May are to get two tranches of emergency subsidy.

This means that the remaining 1.5 million in GCQ and modified GCQ areas are getting only one tranche.

The country does not seem to be winning the war against COVID-19, but the government has remained indifferent to the impact of the pandemic on the millions of poor families, said IBON.

The Duterte administration has continued penny-pinching even as people’s livelihoods and incomes are already irrecoverable and public health is at risk.

People’s socioeconomic welfare along with an efficient health response are the urgent matters that the Duterte government should be focusing on instead of staying apathetic to the mounting health and economic crisis, IBON said. #

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

Higher inflation for poorest Filipinos underscores urgent need for continued cash subsidies

by IBON Media & Communications

Research group IBON said that the higher inflation is problematic but particularly burdens the poorest Filipinos. Inflation rates for the 30% poorest households are higher than the national average.

Especially amid historic joblessness, this affirms how the government should continue giving cash subsidies as income support, the group said.

According to the Philippine Statistics Authority (PSA), headline inflation rose to 2.5% in June 2020 from 2.1% in May 2020.

Behind this uptick are price increases in: transportation, particularly tricycle fares; alcoholic beverages and tobacco; housing, water, electricity, gas, and other fuels; and communication.

However, the 3.0% inflation rate in June for the poorest 30% of households was higher than the headline inflation rate of 2.5 percent.

This means that the cost of living is rising fastest for the country’s poorest households.

IBON said that this is troublesome for millions of poor families suffering interrupted incomes and stingy emergency relief. 

IBON said that the rise in inflation despite repressed consumption during the lockdown is worrying and points to problems in supply and production.

The government is primarily responsible for ensuring these especially during a public emergency.

For instance, the group said, the notable increase in the transport index shows the government’s weakness in ensuring this vital public service.

Rising prices especially for the poorest affirms the urgency of continued income support, IBON said.

The number of beneficiaries getting the second tranche of emergency subsidies should not be limited. The 18 million poorest Filipinos, including the 5 million wait-listed beneficiaries of the Social Amelioration Program, should receive both the first and second tranches of the Php5,000-Php8,000 per-month emergency aid, said the group.

The government said that only those residing in enhanced community quarantine (ECQ) and modified ECQ areas will be getting a second tranche.

This is only 8.6 million families of the original 18 million target beneficiaries, and 3.5 million households of the five million wait-listed.

This also means that 10.6 million beneficiaries now in general community quarantine (GCQ) and modified (MGCQ) areas will have to make do with just their first tranche.

With the cost of living fast rising amid an even worsening pandemic, limiting the number of beneficiaries getting the second tranche of emergency aid is unconscionable, IBON said.

The government should even consider additional tranches for vulnerable households that continue to reel from lost livelihoods and income, said the group. #

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

Govt jeepney ban has already cost drivers Php78,000

by IBON Media & Communications

Thousands of small public utility jeepney (PUJ) drivers have lost as much as Php78,000 each from three months of mass transport suspensions since the lockdown.

The government has been insensitive and stingy assistance has pushed jeepney drivers and their families into poverty, said IBON.

Their troubles risk becoming permanent with the government exploiting the COVID-19 pandemic to keep small drivers and operators off the road to fast-track its jeepney phaseout program, it added.

The Duterte administration suspended mass transport, including jeepneys, when it declared enhanced community quarantines (ECQ) in Luzon then in other parts of the country in mid-March.

Quarantine measures have since eased to general community quarantine (GCQ) in many areas and public transport has resumed in phases.

The first phase started in June 1 and the second is due to begin on June 22.

Jeepneys, however, will still remain prohibited.

PUJ drivers have suffered lost incomes for over three months already, IBON said. Among them are the estimated 55,000-70,000 jeepney drivers in Metro Manila.

For instance, before the ECQ, drivers plying the MCU-Rotonda via Taft route earned an average of Php1,000 per day after a 12-hour shift, net of boundary and fuel expenses.

Jeepney drivers on this route usually worked six days a week.

This means that, to date, they have lost some 78 working days over the past 3 months or 13 weeks of suspended mass transport.

This translates to a total net income loss of Php78,000 or Php26,000 per month of lockdown, said IBON.

Out of work jeepney drivers lose Income with each passing day of transport suspension.

The group stressed that government assistance has been far from enough to make up for these lost incomes.

The social welfare department reports only 36,200 jeepney drivers getting cash aid in the past three months.

Even then, some jeepney drivers only received one tranche of the Php5,000-8,000 of social amelioration and it remains unclear if they will even get the second tranche.

Many small jeepney drivers and operators could become permanently out of work, particularly in Metro Manila, IBON said. 

Transport officials are using the mass transport suspension to force the phaseout of traditional jeepneys by only allowing modernized jeepneys to run.

Under the Land Transportation Franchising and Regulatory Board (LTFRB)’s Memo Circular 2020-017 on public transport guidelines in GCQ areas, only modernized jeepneys and traditional jeepneys under a corporation or cooperative are allowed to operate.

This leaves out small jeepney operators and drivers who, unlike big or corporate fleet operators, can ill-afford the costly Php1.6–2.2 million modernized units, or steep fees and requirements to form a cooperative.

They are even less able after three months of lost incomes and depleted savings, if any.

IBON said that the livelihoods of thousands of small jeepney drivers and operators are at stake. Instead of putting corporate interests first and pushing its phaseout program, the government should give immediate cash assistance to drivers and their families who have suffered three months of lost incomes.

It should also support drivers and operators in upgrading or replacing their units to meet safety, health and environmental standards. #

Open-air jeepneys safer against COVID-19 than enclosed modernized counterparts

by IBON Media & Communications

With only modernized jeepneys allowed to resume operations this week, research group IBON said that keeping traditional jeepneys off the road inconveniences commuters and also denies them potentially safer means of transport.

The group said that the traditional open-air jeepney is likely even safer against COVID-19 than its air-conditioned modernized counterpart. With the pandemic still ongoing, insisting on jeepney modernization unnecessarily puts commuters at risk of possible airborne coronavirus infections.

The second phase of public transport resumption in general community quarantine (GCQ) areas will begin on June 22.

Public utility buses (PUB), modern public utility vehicles (PUVs) like modern jeepneys, and utility vans (UV) express will be allowed to operate.

Traditional jeepneys will remain prohibited.

IBON said that the Duterte administration is using COVID-19 as an excuse to force jeepneys off the road and fast-track its ill-conceived modernization.

IBON however said that the ban on traditional jeepneys should be lifted.

According to the group, there are studies which indicate that open-air transport may have advantages over enclosed, air-conditioned transport in controlling the spread of COVID-19.

Most coronavirus transmissions are acknowledged to occur via droplet infection, from coughing and sneezing, and partly through contaminated surfaces.

Nonetheless, recent studies show that the number of pathogens increases considerably in enclosed spaces and that regular ventilation reduces the risk of infection.

Despite physical distancing, enclosed modern jeepneys can become centers for spreading the virus compared to the natural ventilation of traditional jeepneys, said the group.

Medical researchers and physicists from the University of Amsterdam (UvA) have found that small cough droplets, potentially containing virus particles, can stay in the air of enclosed spaces especially when poorly ventilated.

Air quality and health experts from the Chinese Academy of Sciences similarly find that airborne transmission is a significant route of infection in indoor environments.

The UITP (Union Internationale des Transports Publics) or International Association of Public Transport, with 1,600 members in 96 countries, has issued guidelines warning that public transport systems are “high risk environments” due to the “confined space and limited ventilation”

The risk of community transmission through enclosed public transport has already prompted many countries to take specific measures against this, said IBON.

The European Centre for Disease Prevention and Control (ECDC) advises “proper ventilation in [public transport] at all times” and “the use of windows [to] increase replacement with fresh air”.

Similarly, the United States (US) Centers for Disease Control and Prevention (CDC) came out with guidelines for mass transit administrators which include, among others, “[increasing] circulation of outdoor air as much as possible”.

In Thailand, the transport ministry has instructed public transport operators to open windows for good air ventilation.

In China, some public transport groups have retrofitted window vents to air-conditioned fleets.

In India, buses are enjoined to improve ventilation by increasing the frequency of fresh air intake.

With COVID-19 still spreading, traditional jeepneys have the advantage of being open-air, dissipating droplets with the virus faster, and lowering the risk of transmission, said IBON.

Jeepney drivers prevented from going back to work by the government ask for help. (Kodao)

Yet the government’s narrow-minded focus on corporate-driven jeepney modernization threatens to forego this important built-in advantage in the mass transport system.

The pandemic is being used to put thousands of jeepney drivers out of work and take traditional jeepneys permanently off the road in a brutal enforced phaseout, the group said.

IBON stressed that efficient and reliable public transport is critical to resume as normal social and economic life as possible amid the pandemic.

Commuters suffering from the lack of jeepneys include many health workers and emergency service providers at the frontlines of the battle against COVID-19.

Jeepney drivers and operators need subsidies to make up for revenue losses and higher operating expenses. The current situation is also an opportunity to promote cooperativization towards the eventually nationalized public mass transport for ensuring this vital service. #

Duterte is a paper tiger in strategic terms and is in the process of being torn apart

By Jose Maria Sison

In tactical terms, Duterte has still enough power and enough armed minions to abuse the people and act like a real tiger. He can still kill any specific social activist, critic or anyone opposed to his brutal and corrupt regime. He can still persecute journalists, lawyers, human rights defenders, bishops, priests and opposition leaders as well as their institutions and organizations in so many ways.

But in strategic terms, Duterte is a paper tiger already in the process of being torn apart. Every oppressive or exploitative act that he commits is rousing the people to fight back. Thus, the patriotic and progressive forces are gaining ground rapidly. Duterte is lucky if he can survive politically before the middle of 2022 or he will be even more unlucky and meet a more powerful resistance if he succeeds to extend his power beyond 2022 through any foul means offensive to the sovereign will of the people.

In taking advantage of the COVID-19 problem in order to grab emergency powers, subject the people to extreme repressive measures and steal public funds in the hundreds of billions of pesos, Duterte has sabotaged the Philippine economy and bankrupted his own government and has thus grievously offended the people whom he has deprived of the means of livelihood and frustrated with the false promise of food assistance and economic relief.

In their tens of millions, the workers, peasants and the lower middle class are hungry and angry at the Duterte regime and are eager to move against it. The professionals and entrepreneurs have been deprived of income and have fallen into debt and bankruptcy and are ready to join the toiling masses in concerted actions to protest and make demands. Even the big compradors and landlords who are not his close collaborators now consider him a plague worse than the COVID-19 virus.

The Christian churches are now calling on their people to make Duterte account for his crimes against humanity, his gross and systematic violations of human rights and his blasphemy in cursing and spitting on God’s face. He can invoke the freedom of thought and belief. But he cannot use his state power to persecute and humiliate the Churches without meeting the just resistance of believers,

Duterte has terminated the peace negotiations with the NDFP in obedience to Trump’s order for him to do so in 2017. And to prove his continuing puppetry to the US, he obsequiously promised to Trump that he would do everything in his power to destroy the revolutionary movement and to allow US corporations to have 100 per cent ownership of land and all types of businesses, including natural resource exploitation and public utilities.

Since then, the inter-imperialist contradictions between the US and China have sharpened. The US is now displeased with Duterte for having allowed China to build and militarize seven artificial islands in the exclusive economic zone of the Philippines, control the Philippine national power grid and to put up cell towers of China Telecom and its Philippine dummy in the AFP military camps in collision with the EDCA which privileges the US to have its own bases within AFP camps.

Despite his betrayal of Philippine sovereignty in his relations with China, Duterte has gotten far less than the loans that he expected to get from China even at the most onerous terms for his much-touted plan of infrastructure-building. It has become obvious that China has preconditioned most of the loans with demands for the most outright and brazen surrender of Philippine sovereign rights over the West Philippine Sea and its rich oil, gas and marine resources.

While Duterte and his military minions boast daily in government and commercial mass media that they have wiped out the armed revolutionary movement several times over, they expose their big lie by railroading a bill of state terrorism supposedly aimed at destroying at the same time the armed revolutionary movement in the countryside by likewise destroying any form of legal opposition that can be suspected or interpreted as being helpful to armed revolution.

The armed revolutionary movement of the Filipino people is daily being taunted and insulted by militarist psywar that it is already dead and being challenged to prove that it is still alive and kicking. In this regard, the leadership of the revolutionary movement has announced that each one of its more than 100 guerrilla fronts will deliver lethal blows to their enemy every week and every month in accordance with their current strength within the context of national guidelines under the principle of centralized leadership and decentralized operations.

Indeed, if the revolutionary forces of the people would carry out their fighting tasks very well against the enemy armed units, the human rights violators and plunderers, they can contribute significantly to the isolation, discredit and overthrow of the traitorous, tyrannical, genocidal and plundering Duterte regime. When they were much smaller and weaker and less experienced, the revolutionary forces contributed significantly to the overthrow of the Marcos fascist dictatorship from its inception in 1972 to 1986.

They are now definitely in a much stronger and better position to give a greater contribution to the effort of the Filipino people to get rid of a tyrant of a lower calibre than Marcos, a mediocre mimicry of his master monster. They can assure all their allies that under current circumstances the balance of forces does not yet allow seizure of political power by the revolutionary proletariat but certainly allows constitutional succession among the conservative forces to depose a physically, mentally and morally deranged tyrant and provide relief to the suffering people.

As they did in the fight against the Marcos fascist dictatorship, the conservative forces can avail of the broad united front of forces against the Duterte tyranny, persuade the civilian and armed personnel of the state to withdraw support from the tyrant and apply their principle of constitutional succession to get rid of him and his gang of butchers and thieves. If they succeed, then they shall have created the conditions for the resumption of peace negotiations with the NDFP. All advocates of a just peace can seriously consider this point. #

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The author is the chief political consultant of the National Democratic Front of the Philippines.