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There’s funding to respond to COVID-19 – the problem is at the top

By Sonny Africa

The Duterte administration is still not clear on what its COVID-19 response is and how much this will cost. On top of that, it also doesn’t know how to fund this because it refuses to let go of its sacred cows – infrastructure, debt service, and the accumulated wealth and profits of the country’s economic elite.

Millions of poor Filipino families are suffering the worst mass unemployment in the country’s history because of the military lockdown since March. This has even been extended for another two weeks. Yet, tragically, the nation still does not know how far it really is in dealing with its worst public health crisis ever.

It is over two months since the first confirmed case of COVID-19, nearly four weeks into the unprecedented lockdown, and over two weeks into pandemic emergency powers. The Duterte administration’s confusion and disarray in responding is unforgiveable and a disservice to the heroic efforts of so many Filipinos including in the lower levels of government and private sector volunteers.

Even worse, based on what little we know, the Duterte administration’s response is not just unclear but also slow and stingy. This means that millions of Filipinos are facing more difficulties today than ever, and also that there will be a deeper socioeconomic crisis going on long after the lockdown is lifted.

Billions to respond

The clearest sign that things are so unclear for the administration is its inability to say exactly what its COVID-19 response is and what budget is needed.

When the military lockdown was declared, the government announced a Php27.1 billion package versus the pandemic. This was a haphazard cobbling together for crude public relations purposes of mainly recycled pre-pandemic government programs, including a completely irrelevant Php14 billion for tourism.

Pressed for something more substantial, it superseded that first package and threw a Php275 billion figure into the air during the railroading of emergency powers through Congress. This supposedly consisted of Php200 billion for emergency subsidies and Php75 billion for health care.

Two weeks and two reports to Congress on the use of emergency powers later, that Php275 billion is still the representative figure and the closest thing to a summary of the government’s COVID-19 response.

In the meantime, the government reports what are meant to be impressive efforts at raising funds for its COVID-19 response – Php300 billion from the sale of government securities, Php189.8 billion in unreleased appropriations and realignments, Php121.6 billion in advanced remittances of dividends to the national government from government-owned and -controlled corporations (GOCCs), Php22 billion in unutilized cash balances and funds, and Php10.3 billion in additional cash allocations and allotments.

Mechanically adding these up gives the impression of Php644.1 billion already available from various sources. However, at least Php143.6 billion or 22% of this – the early dividends and unutilized cash – is actually not a literally new budget for the response and just about ensuring there’s cash at hand to immediately spend. The economic managers are also looking at US$2 billion from multilateral lenders.

Seeing so many numbers is bewildering – so where exactly are we?

Residents of Barangay Payatas’ “Plastikan Area” receive food aid from the group The Vegan Neighbors.

What response?

The logical place to start is from identifying what needs to be done. It’s a straightforward matter to just list what the government itself has already identified as needed, whether by the National Economic and Development Authority (NEDA) or as implied in the president’s reports to Congress.

There are the health interventions: personal protective equipment (PPE) and other logistical support for medical frontliners and responders; mass testing and surveillance; isolation and quarantine facilities in congested urban poor communities; and treatment facilities including medical supplies.

There are also the equally critical socioeconomic relief measures: emergency relief packages, cash transfers and other financial assistance, and business support for micro, small and medium enterprises (MSMEs).

And yet, so deep already into the crisis, the Duterte administration has failed to present a clear response plan to the public. Instead, the nation is fed a daily stream of anecdotal reports about its fragmented efforts. Clearly, these efforts are far from enough. The lived experience of thousands of frontliners and millions of locked-down households is stark neglect and unnecessary difficulties mounting by the day.

The president’s disorganized reports to Congress on March 30 and April 6 are of little help and in many ways just add to the confusion.

Compiling the various measures scattered in the reports shows the government apparently having plans worth Php233.9 billion. This includes Php38.6 billion for hospitals and other health facilities, Php114 million for emergency relief packages, Php154.4 billion for cash transfers and other financial assistance, and Php40.8 billion for local government units (LGUs).

This is getting close but still doesn’t correspond to the headline Php275 billion figure. The president’s reports to Congress seem to detail the Php200 billion emergency subsidies portion a little bit while leaving a gaping void in what the supposed Php75 billion for health care is about. In any case, something’s wrong if the government’s plan has to be built up in such a piecemeal manner.

Residents of Barangay Payatas’ “Plastikan Area” receive food aid from the group The Vegan Neighbors.

Slow response

The need for clarity about the response doesn’t just come from being unnecessarily obsessive-compulsive about details. Clarity about the response is the starting point of marshalling public resources and organizing the machinery for the immediate and effective response demanded by the crisis.

The disarray goes far in explaining the sluggish response of the administration to date. IBON estimates that up to 18.9 million workers in the formal and informal sector have been dislocated by the military lockdown; 14.5 million of these are in Luzon and the other 4.4 million in the rest of the country. ‘Dislocated’ is understood as work interruptions of some sort with varied risks of corresponding losses in wages, salaries and other income.

The month-and-a-half lockdown-induced disruption in incomes and livelihoods has dire consequences for the poorest 16.1 million low-income families in the country. Their monthly incomes are at most around Php20,000 or so, according to IBON estimates using data from the latest 2018 Family Income and Expenditure Survey (FIES) of the Philippine Statistics Authority (PSA). These poorest three-fifths (64%) of families are also those who have little or no savings to speak of, according to the Bangko Sentral ng Pilipinas (BSP).

The government itself has acknowledged the vulnerable situation of the overwhelming majority of the population. The Bayanihan to Heal as One Act (Republic Act 11469) explicitly said that 18 million low-income households – corresponding to around the poorest 75% of the population – will be given emergency subsidies.

Yet, weeks into the lockdown, the government response is still painfully slow and inadequate. It seems to have waited until hunger and unrest became critical. This is exemplified by the frustration of the urban poor residents of Sitio San Roque, Quezon City in the heart of the capital who were violently dispersed and, bizarrely, 21 of whom were even detained and charged.

It took three long weeks before emergency cash subsidies were released. And yet these have still so far only reached 3.7-4.9 million poor households – the government’s report is confusing – or not even one third (20-27%) of the supposed target 18 million households under RA 11469. Over two-thirds or as much as 11.5 million badly affected families are still waiting.

Adding insult to injury, the government could have reached as much as 10-15 million households immediately upon the lockdown three weeks ago. The president is also only able to report just a paltry 190,217 food packs distributed by the Department of Social Welfare and Development (DSWD). Underfunded local government units (LGUs), civil society groups, and concerned citizens have tried their best to fill this gap.

The government’s other emergency relief programs are doing even worse. The Department of Labor and Employment (DOLE) reports just 102,892 formal sector workers given Php5,000 in cash assistance under its COVID-19 Adjustment Measures Program (CAMP) – or barely 1% of 10.7 million workers in formal establishments nationwide. Only 55,934 informal workers have benefited from DOLE’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD), receiving just an average of Php3,121 each.

Up to 357,614 farmers and fisherfolk have supposedly been given zero interest loans under the Department of Agriculture’s (DA) Expanded Survival and Recovery Aid (SURE Aid) project, or granted loan payment moratoriums. This is just 3.7% of farmers, farm workers and fisherfolk nationwide. The president’s report however could not say how much this support was worth.

Residents of Barangay Payatas’ “Plastikan Area” receive food aid from the group The Vegan Neighbors.

Stingy response

The Duterte administration may be giving repeated anecdotal reports to give the impression of sustained help. The response however is still clearly very slow.

At least part of the reason is the government rationing the help and putting so many bureaucratic hurdles for poor families. However, the importance of ensuring that all the neediest are covered far outweighs the redundance of some less needy being included. Choosing to err on the side of inclusion means dispensing with these hurdles.

But the response is also stingy in two respects.

First, the amounts being given are very small. Beneficiaries will welcome any aid given to them but the amounts fall far short of even the government’s underestimated official poverty line of on average Php10,727 nationwide and Php11,951 in the National Capital Region (NCR).

It is also probable that reported cash transfers for the poorest are bloated because the amounts likely include prior entitlements before the pandemic.

Secondly, the Php275 billion response package is too small to provide critical subsistence support to all the millions of affected households during the lockdown and in the immediate period right after. It is also far below the order of magnitude needed to support the consumption-driven stimulus that the economy needs to moderate the economic collapse in 2020.

IBON is among many others that have pointed out that the relief measures have to be much more ambitious. Our estimate is that Php297.1 billion monthly is more sufficient and should be given for up to 2-3 months at least. This does not yet even include perhaps Php300-400 billion in crucial support for critically affected businesses especially the country’s 998,000 or so micro, small and medium enterprises (MSMEs).

Aid workers arrested by the police on alleged violations of the lockdown policy of the government. (Unyon ng Manggagawa sa Agrikultura photo)

Funding the response

The president’s lamentation in his last report on government’s response about lack of funding of course raises a valid point. Hundreds of billions of pesos are needed not just to contain the pandemic but to keep the economy from sinking further after the lockdown. More so amid the global recession. And this is not even to speak of what’s needed in the coming years to build a more stable and self-reliant economy.

This is where the Duterte administration is particularly stumbling. It either does not appreciate the difficulties faced by the people and the economy, or chooses to be insensitive because it refuses to even consider the radical measures needed to address these.

The government can find the funding for COVID-19 response measures needed – on a scale many times over its Php275 billion program – if it genuinely wants to. The administration basically has three areas of financing:

1. Budget realignment. It can realign existing budget items under the Php4.1 trillion General Appropriations Act (GAA) for 2020 and Continuing Appropriations from 2019. This includes using savings from existing projects, activities and programs to outright discontinuing them and then diverting budgets to COVID-19 response.

The president’s first report to Congress mentioned Php372.7 billion in unreleased special purpose fund (SPF) allotments. This was presumably mentioned as the initial universe of budget items that can be realigned. By the second report, Php189.9 billion was said to have already been so realigned (including Php100 billion to the DSWD); a large part are reportedly from capital outlays.

However, the government can be much more aggressive in considering budget items for realignment. The Php9.6 billion in dubious confidential and intelligence funds – including Php4.5 billion just for the president – is a start.

The Php989 billion public infrastructure program should be opened up to greater scrutiny. The feasibility studies of these projects were all drawn up at a time of giddy optimism about the economy. However previous assessments of economic and financial viability will no longer hold in today’s greatly changed conditions. At the very least, the social need for many of them will have been overtaken by pandemic-related needs.

The current crisis can also be used to justify at least a moratorium on the government’s debt payments. The SPF includes Php451 billion just for debt service on interest payments. Outside the GAA, there is also Php582 billion for principal amortization. Political will can overcome accustomed automatic appropriations and the habitual deference to creditors.

2. Solidarity financingThe administration can resort to increased borrowing but prioritizing those with favorable terms for the country. The administration has already sold Php300 billion in government securities to the BSP in a classic monetizing of the deficit. It is also looking into borrowing US$1.25 billion from the Asian Development Bank (ADB) – aside from US$8 million in grants – and possibly another US$1.1 billion from the World Bank.

However, the government can consider issuing special COVID-19 bonds targeted especially at large corporations, financial institutions and oligarchic families. There is a huge concentration of financial resources and wealth in this regard that can be mobilized beyond individual donations during the lockdown. This is debt but it can be designed more on solidarity terms rather than on crude financial metrics to minimize the burden on the government. For instance, they can be at low, zero or negative interest rates and be zero coupon; making them tax-exempt can be a sweetener. Perhaps Php300-600 billion can be raised in this way.

3. New progressive taxes. With a view to the longer term, the administration can actually consider new taxes on those who can afford this. It is worth recalling that the TRAIN Law lowered the personal income taxes (PIT), estate taxes and donor taxes on the country’s higher-income groups. This already resulted in Php117 billion in foregone revenues in 2018 – with initial projections of foregone PIT revenues of up to Php193.5 billion in 2022.

The government can consider starting with reverting personal income, estate and donor taxes to pre-TRAIN levels. This focuses on those who, even with the pandemic, are still in a much better position to contribute to the national effort. Tax levels can be fine-tuned to keep higher tax rates on the super-rich and to preserve tax benefits for middle-income households affected by the pandemic and the economic crisis to come.

COVID-19 has highlighted the critical importance of government intervention and public resources in a time of crisis. But it should also drawn attention to how significant government intervention is needed to address chronic problems of poverty, inequality and underdevelopment.

The radical shifts in economic policies the country needs after the pandemic and entering into a world economy in recession will demand huge government resources, among other interventions. Building up the public health system is just the start and the country’s agricultural and industrial system needs to be significantly and rapidly bolstered. A progressive tax system is among the many crucial policy measures to do these.

Barangay Krus na Ligas market goers call for faster distribution of releif aid by the government during the Covid-19 lockdown. (Kodao photo)

Unprecedented crisis

Time is running out for the Duterte government to put together a bold a COVID-19 response package. The country is still at the start of a steeply rising curve of infections and fatalities. After the lockdown, the economy will be facing a steeply falling curve of severe economic crisis.

Every day of delay means more distress for the poorest and most vulnerable, micro entrepreneurs and small businesses sinking, and of course the virus just waiting to spread even more rapidly once the lockdown is lifted.

The priority is saving lives and easing hardship. The problem right now is not lack of a national effort to deal with these – so many Filipinos are struggling everyday to deal with the pandemic and they deserve all the help they can get.

As so many are already realizing – the problem is at the top. #

Updated April 12, 2020 to clarify tax proposals

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The author is the executive director of IBON.org

Emergency relief and COVID-19 response more important than debt payments

by IBON Media

Emergency relief for millions of Filipino families during the unprecedented COVID-19 crisis is more important than mindless debt servicing, research group IBON said.

The government should get its priorities straight, said the group, and seriously consider at least a moratorium on the government’s debt payments.

This will help provide much-delayed relief and financial assistance to the most vulnerable Filipinos affected by the coronavirus lockdown.

Finance Secretary Carlos Dominguez recently rejected the proposal of economic affairs committee chair Senator Imee Marcos to seek a moratorium on debt payments to enable additional funding for the country’s COVID-19 response measures.

Dominguez said the proposition has not been and will never be considered despite the pandemic.

Honoring its financial obligations, he said, is the strongest pillar of the Philippines’ standing in the global community and the reason behind investor confidence in the economy, he added.

IBON executive director Sonny Africa said that the government’s obsession with so-called creditworthiness is blinding it to how a moratorium can help give much more, and much more quickly, to the poor amid the raging coronavirus crisis and its burdensome impact.

“The Philippines is in the worst public health crisis in its history,” Africa said.

“The poor already suffer the worst economic crisis in decades – aggravated by the Duterte administration’s slow response to contain the pandemic, over-reliance on a harsh military lockdown, and stingy relief efforts,” he added.

Africa said that government should stop its wilful blindness to what the people need, which is hindering the country’s ability to stop the spread of COVID-19, build up the public health system, and give relief to millions of Filipinos. At least part of the over Php1 trillion in funds for debt servicing in 2020 can

be used for urgent COVID-19 response instead, he said.

The national government is paying Php1.03 trillion to service debt in 2020 – Php451 billion for interest payments and Php582.1 billion for principal amortization. Some Php285.8 billion of this goes to servicing foreign debt.

The Duterte administration needs to drastically increase spending to respond. It can begin by negotiating with foreign multilateral and bilateral agencies to waive interest and principal payments or even to totally cancel Philippine debt obligations in the face of the pandemic, said Africa.

“The government will be paying so-called development agencies and supposedly friendly governments at least US$5.2 billion in 2020,” Africa said. T

his consists of: US$686.6 million to the Asian Development Bank (ADB); US$433.8 million to the World Bank; US$406.9 million to Japan; US$21.4 million to China; and US$17.3 million to the United States.

Africa said that the government’s narrow-minded debt policy is the biggest stumbling block to a debt moratorium.

“Creditors will always want to be repaid. The government’s job is to struggle for the best possible terms for the country and not to defend creditors’ claims,” he said.

“The suffering of so many proves we are a country in need. The government should stop pretending that a policy of debt relief and debt restructuring is not an urgent option,” Africa said. #

As extended lockdown begins: Gov’t response stalled, stingy despite millions of Filipinos in need

by IBON Media

At the end of the original month-long lockdown period and on the first day of its extension, research group IBON said that the government is still failing to give millions of poor and vulnerable Filipinos the socioeconomic relief they need.

Poor households have struggled to survive four weeks of the enhanced community quarantine (ECQ) and will only endure greater difficulties during the two-week extension.

The Duterte administration needs to let go of its burdensome bureaucratic requirements, increase funding, and expedite getting help to all families in need, said the group.

The Duterte administration released the third report on its COVID-19 response as required under the Bayanihan Heal as One Act or Republic Act (RA) 11469 which granted Pres. Duterte emergency powers.

IBON said that millions of Filipinos are still not getting relief despite these emergency powers, even measured against the administration’s already low targets.

The group noted that no additional beneficiaries were given emergency subsidies since the 3.7 million reported last week.

This is only one-fifth or 21% of the 18 million low-income families targeted by the government.

They also only received an average of Php4,391 which is barely half the maximum Php8,000 the government promised.

Meanwhile, the number of workers and informal earners that received financial assistance has increased but this is still way below the millions of displaced workers and informal earners as per IBON estimates.

IBON said that the number of workers assisted by the Department of Labor and Employment (DOLE) increased by only 79,553 to 167, 491, which is just 1.7% of 10.7 million workers.

The number of informal workers assisted went up by only 62,152 to 118,086, or only 2.3% of 5.2 million non-agricultural informal earners.

Emergency subsidies were also provided to 40,418 drivers at Php8,000 each through a memorandum of agreement (MOA) between the Department of Social Welfare and Development (DSWD), Land Transportation and Franchising Board (LTFRB) and Land Bank of the Philippines (LBP).

But this is just 9% of the 435,000 drivers targeted for assistance under the MOA, said the group.

IBON also noted that some farmers have finally received cash assistance from the Department of Agriculture (DA).

The agency reported giving Php5,000 each in unconditional cash transfers to 319,489 farmer beneficiaries.

However, this is only 3.3% of the IBON-estimated 9.7 million farmers, farm workers and fisherfolk needing assistance.

IBON said that the unambitious targets as well as snail-paced and measly socioeconomic response into the fifth week of lockdown only affirms government’s continued indifference and negligence, especially towards the poorest and most vulnerable.

More and more Filipino families will be pushed into deeper poverty under the COVID-19 lockdown if government does not speed up and significantly expand socioeconomic relief and response to reach all those needing assistance, said the group. #

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

Less than 1/3 of 18M beneficiaries reached: Gov’t should expedite socioecon response under extended lockdown

by IBON Media

Nearly four weeks into the government’s military lockdown and especially with the two-week extension, research group IBON said that emergency relief measures are still too slow and too small.

The group said that millions of poor and vulnerable families are facing unnecessary difficulty in meeting their basic needs under the lockdown. The government needs to show greater political will and do away with bureaucratic obstacles to relief efforts.

The Duterte administration recently declared the extension of the enhanced community quarantine (ECQ) of the entire Luzon island until April 30. This is supposed to help contain the spread of COVID-19 as well as give government more time to beef up its public health response and prepare for a post-lockdown scenario.

IBON pointed out however that government socioeconomic relief efforts are snail-paced and inadequate.

The group said that if the administration remains indifferent and does not step up its response, the difficult situation of millions of vulnerable families will worsen under the extended lockdown.

IBON estimates 14.5 million dislocated workers and informal earners, and up to 7.5 million low-income families are vulnerable to shocks to their livelihood just in Luzon.

The government acknowledged that the poorest 18 million households in the country need assistance.

Based on Pres. Rodrigo Duterte’s most recent report to Congress, the group noted that only Php26.3 billion has been spent on COVID-19 response so far.

This is just 9.6% of its supposed Php275 billion budget for dealing with the pandemic.

IBON interpreted budget items in the president’s report as detailing plans for the Php275 billion response.

For socioeconomic relief, only the following was reported spent: Php63 million (55.3%) of Php114 million allocated for emergency packs, and Php22.7 billion (14.7%) of Php154.8 billion for cash transfers, financial assistance and pensions.

IBON said that millions of poor households, workers and informal earners have yet to be assisted. Only 190,217 food packs were distributed by the Department of Social Welfare and Development (DSWD).

The group noted that the president’s report confusingly mentioned cash transfers to 3.7 million “beneficiaries of the Pantawid Pamilyang Pilipino Program” and also to 1.2 million “Conditional Cash Transfer beneficiaries of the DSWD”.

In any case, this is at most 20-27% of government’s targeted 18 million beneficiaries.

They reportedly received an average of Php4,400-5,000 each in cash and non-cash subsidies under the Emergency Subsidy Program (ESP).

There was no report of financial assistance given to indigent senior citizens.

Only 88,388 workers received Php5,000 in financial assistance under the COVID-19 Adjustment Measures Program (CAMP) of the Department of Labor and Employment (DOLE).

This is just 0.8% of 10.7 million workers in formal establishments nationwide. Only 55,934 informal workers became work-for-pay beneficiaries of DOLE’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) programs and received financial assistance (at an average of Php3,121 each).

This is just 1% of up to 5.2 million non-agricultural informal earners nationwide.

Meanwhile, 357,614 farmers and fisherfolk supposedly received financial assistance from the Department of Agriculture (DA) but no figures were provided.

This is just 3.7% of the country’s 9.7 million farmers, farm workers and fisherfolk.

IBON said that the government should waste no time in ensuring the socioeconomic needs of the poorest and most vulnerable Filipinos who are increasingly challenged to cope with the extended lockdown.

The government can immediately implement urgent socioeconomic interventions such as substantial provision of emergency relief packages, unconditional cash transfers, wage subsidiesand financial assistance, among others, said the group. #

(Kodao reposts IBON.org articles as part of a content-sharing agreement.)

Duterte report shows govt COVID-19 response is insufficient, insensitive

by IBON Media

Research group IBON said that that the Duterte administration’s first official report on COVID-19 efforts only underscored just how government response to the worst public health crisis the country has ever faced is slow, insufficient, and insensitive.

The group said that the report failed to show clearly what the government’s plan is and even just what is being done.

Pres. Duterte submitted to Congress the first official report on COVID-19 response efforts. These weekly reports are required under the Republic Act (RA) 11469 or the Bayanihan to Heal as One Act and are supposed to monitor how the emergency powers granted to the president are utilized. 

The reports should include all response actions carried out by the president in the preceding week, as well as an accounting of the funds used for these. The report submitted, however, covered efforts since the start of the military lockdown.

IBON said that it is now the third week of the lockdown, and the report exposed how government efforts are slow, insufficient and leave out much-needed measures particularly towards bolstering the health sector and urgent socioeconomic relief.

It also showed government’s insensitivity to overwhelmed and unprotected health workers, and millions of Filipinos left with little or no means to meet their families’ basic needs during the lockdown.

As of Tuesday, March 31, the number of confirmed COVID-19 cases in the country has risen to 2,084 with 88 dead from 138 cases and 12 dead as of March 15.

Undermanned and overburdened hospitals strain health workers and unduly exposed them to COVID-19. The Philippine Medical Association has already reported 17 doctors dying while battling the virus.

The government has already acknowledged the poorest 18 million households in the country needing assistance.

Meanwhile, IBON estimates 14.5 million dislocated workers and informal earners, and up to 7.5 million low-income families vulnerable to shocks to their livelihood just in Luzon.

IBON said that government measures to bolster health response and protection for health workers are severely lacking. The report only mentioned the Bureau of Customs (BOC) releasing just 48 boxes of personal protective equipment (PPE), six ventilators, and 97,600 test kits.

The Department of Science and Technology (DOST) produced 500,000 face masks.

The group noted that the report did not mention such critical tasks like increasing the number of health workers and mass testing. It did not include giving any additional hazard pay, setting up isolation or quarantine facilities, and medical assistance for indigent patients.

Apart from mentioning six ventilators, nothing else was said about expanding facilities and equipment for the treatment of COVID-19 patients, said the group.

With regard to socioeconomic relief measures, IBON said that this is coming down in trickles if at all to the most vulnerable Filipino families. Based on the report, the group noted that of the 18 million households that government acknowledged as needing assistance: only 0.04% (6,314 beneficiaries) received cash, food, and non-food aid from the Department of Social Welfare and Development (DSWD), while only 1.1% received 194,467 food packs prepared for maybe two to three days.

There was also no mention of emergency support for the 5.6 million senior citizens nationwide.

Meanwhile, millions of Filipinos whose livelihoods and earnings have been affected are also neglected.

IBON noted that only 8,641 or just 0.08% of the up to 10.7 million affected workers nationwide received Php5,000 in COVID-19 Adjustment Measures Program (CAMP) financial assistance under the Department of Labor and Employment (DOLE).

Only 51,293 or just 1% of up to 5.2 million affected informal earners nationwide became beneficiaries of DOLE’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) work-for-pay programs.

However, there was no report of any financial assistance given by the Department of Agriculture (DA) to the country’s 9.7 million farmers, farm workers and fisherfolk.

IBON said that the lack of or minimal efforts on COVID-19 crisis shown in Pres. Duterte’s first official report bodes ill for the country. It only reflects the disorganized, confusing and chaotic government response so far.

The group said that the pandemic in the country can be contained and overcome if the government replaces its militarist population control-biased approach.

Its measures should instead prioritize virus tracking and surveillance, substantially build the public health system, and address the socioeconomic needs of the population, especially the most vulnerable.

Immediate steps can include health interventions such as mass testing and monitoring, and substantial provision of PPE and other support for health frontliners. Urgent socioeconomic interventions can include the immediate and substantial provision of emergency relief packages, unconditional cash transfers, wage subsidies, and financial assistance, among others, said the group. #

(Kodao reposts IBON articles as part of a content-sharing agreement.)

The shady side of POGOs

by Jose Lorenzo Lim

Walking around the Taft area one night, I thought I was in an extension of Chinatown. A drove of Chinese nationals exited a condominium, heading towards some big white vans. They didn’t look like part of a tour group since they were millennials with only their phones attached to them. On the sides of the vans were the logos of a company, “GenX Sports”.

When I got home, I searched the net about “GenX Sports” and found that it was a Philippine Offshore Gaming Operators (POGO) licensed by the Philippine Amusement and Gaming Corporation (PAGCOR) to operate in the country. These Chinese nationals were POGO workers. But isn’t gambling illegal in China? Not necessarily.

The real deal

When the communist party of China took charge in 1949, they made gambling illegal. Fast forward to today though, the Chinese participate in the state-run welfare lottery set up in 1987 and the sport lottery established in 1994. Tickets can be bought at outlets starting at two yuan with a jackpot capped at 10 million yuan.

If Chinese mainlanders want to participate in other forms of gambling, they have the choice to either fly to Macao or Hong Kong or just set up a virtual private network (VPN) to participate in online gambling sites which are run in the Philippines.

In 2019, however, China imposed stricter policies on online gambling in Macao where most offshore gambling by mainlanders is done. Hence, operators sought to set up online gambling elsewhere, like in Cambodia and the Philippines, which both have lax online gambling policies. In a hearing of the House Committee on Games and Amusements last December 2019, PAGCOR reported licensing 62 POGO operators, up from the 57 reported in September 2019. Of the 62 licensed POGO operators, 49 are operating, 13 are non-operating, and 10 are said to be paying taxes to the Bureau of Internal Revenue (BIR).

With the increase of operators setting up shop in the Philippines, you would think the government is milking the POGO phenomenon by generating lots of revenue through taxes. But it turns out that this isn’t the case. Out of the Php50 billion in revenues expected from POGOs, only Php5 billion or just 10% of these revenues have been remitted to the government.

Aside from the non-remittance of taxes, there has been alleged proliferation of prostitution and sex trafficking in connection with the POGO industry. Sex dens were recently raided by the National Bureau of Investigation (NBI) with POGO workers reportedly serving as the clientele. Sex workers have been rescued from these dens with some said to have been located in luxury hotels and condos in Pasay City.

New level of shady

Another aspect of POGOs is abuse and forced labor of workers. In a Senate hearing to investigate illegal activities in the POGO industry, a Taiwanese national said that she was abused and held against her will by her employers. Her employer would occasionally namedrop a “powerful” man in the government – Michael Yang – who is said to be supporting POGOs.

The most prominent Michael Yang in the Philippine government is the Chinese national who served as Duterte’s former economic adviser. Objectively speaking, Philippine presidents hiring foreign economic advisers has been done before. Former president Gloria Arroyo once hired an American consultancy firm for US$75,000 a month. Moreover, the advisers encourage investments from the country they come from. The American consultancy firm Arroyo hired targeted American investors. As Duterte’s economic adviser, Michael Yang may have benefited by targeting Chinese investors for his business.

But who is Michael Yang? Yang is a businessman in Davao who set up shop in the bustling city through DCLA. DCLA is a mall with various discounted items similar to 168 mall in Divisoria. This is how Duterte got to know Yang. Yang was put into the spotlight after Eduardo Acierto, a former member of the Anti-Illegal Drugs Group (AIDG), accused him of having links to the Johnson Chua drug syndicate. As a friend of Yang’s, this also linked President Duterte to the drug trade. Acierto said that Yang, known for his alias “Dragon” owing to the supposed tattoo on his shoulder and arm (see photo), was allegedly involved in “facilitating drug shipments”. Duterte, in one of his speeches, even said that Michael Yang is close to former Chinese ambassador Zhao Jian Hua, whom Yang often accommodated at his residence in Davao.

Photo taken from the Facebook account of a certain “Micheal Yang“. (Through IBON)

Yang has other businesses such as Fu De Sheng in China that has a Philippine counterpart called Philippines Full Win Group of Companies Incorporated.  It offers services such as property leasing, processing of work and tourist visas, logistics, and international trading. Is it merely coincidental then that Full Win’s services seem beneficial to POGOs? Or does he himself own a POGO?

Michael Yang together with Duterte is a whole new level of shady. Not only does Yang have alleged links to the drug trade, he has also been accused of abusing POGO workers.

Isn’t it weird that we absorbed offshore gambling operations here in the Philippines but in return we only got reports of criminality and non-remittance of taxes? Do the benefits of POGOs outweigh its costs? Probably not. #

(JOSE LORENZO LIM is a researcher at IBON Foundation. His research topics include Build, Build, Build, the oil industry, and social services. Prior to IBON, he served as Editor-in-Chief of the UPLB Perspective for the academic year 2016-2017. When not in the office, Jose Lorenzo enjoys writing with his fountain pens and trying out new ink.)

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

IBON files historic first red-tagging complaint with Ombudsman against Parlade, Badoy, Esperon

By IBON Media

Research group IBON will file an administrative complaint with the Office of the Ombudsman on Monday to hold government officials accountable for red-tagging the institution and many other activists, individuals and groups.

This is believed to be the first case of red-tagging filed against any government official in the country’s history.

Through co-complainants IBON Executive Director Sonny Africa and IBON Board of Trustees Chairperson Bishop Solito Toquero, an administrative complaint will be filed against former Armed Forces of the Philippines (AFP) deputy chief-of-staff for civil-military operations and now Southern Luzon Command chief Major General Antonio Parlade, Jr, Presidential Communications and Operations Office (PCOO) Undersecretary Lorraine Badoy, and National Security Adviser Hermogenes Esperon.

IBON is asking the Ombudsman to hold respondents Parlade, Badoy and Esperon answerable for their malicious abuse of authority and negligent performance of duties as public officials.

IBON is also asking that they be punished for conduct that is grossly disregardful of the public interest, unprofessional, unjust and insincere, politically biased, unresponsive to the public, distorting nationalism and patriotism, and undemocratic.

The group’s complaint is grounded on The Ombudsman Act of 1989 (Republic Act No. 6770) and the Code of Conduct and Ethical Standards for Public Officials and Employees (Republic Act No. 6713).

This is also after requesting the Commission on Human Rights (CHR) to investigate the matter and participating in the CHR’s subsequent inquiry.

IBON said that the complaint was written after a year of constant vilification of it by the respondents.

The most recent, mentioned in the complaint, is when Usec. Badoy called IBON a communist front on the One News program ‘The Chiefs’ in end-January.

This was after IBON Research Head Rosario Guzman fact-checked the PCOO’s ‘Duterte Legacy’ information materials. Gen. Parlade meanwhile spent the first week of February in Australia calling out IBON for supposed terrorist financing.

The complaint enumerates numerous slanderous statements, interviews, articles, and speeches in 2019 and the first weeks of 2020 where Badoy, Parlade, and Esperon red-tagged IBON.

This visibly started in March 2019 when Badoy and Parlade had a press briefing in Malacañang Palace about their February 2019 red-tagging road show in Europe to vilify IBON and other activists and organizations.

They maliciously and publicly accused IBON of “fabricated reports” for the United Nations and European Union and “[radicalizing] students as young as seven years old to eventually become (Communist) cadres”.

Also in March, Esperon named IBON as among Philippine non-government organizations (NGOs) supported by the Belgian government that “act as legal fronts for the CPP-NPA”

The complaint points out that IBON formally wrote the Armed Forces of the Philippines (AFP) and National Security Council (NSC), as well as had a meeting with the latter, to ask for the so-called evidence for the allegations.

However, despite repeated requests, the AFP and NSC have refused to provide anything while purportedly showing these to media, diplomats, government agencies, and even private sector groups.

In the complaint, IBON underscores how the government’s crackdown on progressive groups heightened following the issuance of Executive Order No. 70 (EO 70) in December 2018 creating the National Task Force to End Local Communism and Armed Conflict (NTF-ELCAC). All the respondents are ex-officio members of the NTF-ELCAC.

IBON’s complaint points out how the NTF-ELCAC has launched “a rabid vilification campaign against members of civil society by arbitrarily and unjustly branding them as fronts of the CPP-NPA, which have been declared as “terrorists” by the President.

The CHR, on the Sunday before IBON’s filing of the complaint, also called out EO 70 as using counterinsurgency to justify attacks on human rights defenders and activists.

IBON maintains that it is nothing more than a SEC-registered foundation that publishes its socio-political-economic analysis for all the public to see.

“Its researches enjoy a reputation of being independent, evidence-based, and credible. It is because of this reputation that its researches on social justice, real economic development, environmental sustainability and democracy, among many others, are widely used by various non-government and people’s organizations in pursuit of their own advocacy work,” read the group’s complaint. #

The PCOO’s disinformation must be stopped

by IBON Media

The Duterte administration’s persistent red-baiting of IBON and other groups instead of addressing the issues raised is an affront to the public. The public deserves the truth and to be informed about the issues that matter to them the most. Instead, the government is red-baiting critical voices to silence opposition and to hide the real situation of the country.

IBON Research Head Rosario Guzman and Presidential Communications Operations Office (PCOO) Undersecretary Lorraine Badoy were recently guests on One News’ ‘The Chiefs’ to discuss the administration’s Duterte Legacy campaign. IBON presented data questioning the accomplishments claimed by the PCOO. Instead of addressing the PCOO’s apparent disinformation, Usec. Badoy responded by linking IBON to the Communist Party of the Philippines-New People’s Army-National Democratic Front of the Philippines (CPP-NPA-NDFP). She pressed the point and only relented when the hosts reminded her to stay on topic.

Usec. Badoy’s behavior is symptomatic of the administration’s wholesale attacks on independent groups. It is being done to hide the worsening economic situation, prevent the radical reforms needed to develop the country, and promote its self-serving agenda. Under the pretext of ending the armed Communist rebellion, the Duterte administration cast its net wide and is attacking every group that is critical of its anti-people economic policies and authoritarianism.

The Duterte administration has been most systematic and vicious in attacking those it sees as the greatest threats to its oppressive rule. The government vilifies, harasses, fabricates charges against, and illegally arrests critics and opposition. Human rights defenders have already been violently attacked and even killed under this administration. Usec. Badoy mentioned on the show that she is part of the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC). Since its creation in 2018, the NTF-ELCAC and its security apparatus has been implicated in the surge in human rights violations in the country.

President Duterte with PCOO secretary Martin Andanar and Presidential spokesperson Salvador Panelo. (Malacañan photo)

The PCOO is at the forefront of the government’s disinformation campaign to deceive and manipulate the public. For this, its budget has been increased substantially to Php1.7 billion in 2020 from an average of Php1.1 billion under the previous Aquino administration. The 55% larger budget of the PCOO is only going to promote falsehoods on an even wider scale.

IBON has been explaining economic issues to the public for 41 years. The Duterte administration is attacking IBON because we advocate an economy that upholds the people’s interests most of all. As with activists and other groups, we are undeterred and will continue to support the efforts of the people’s movement to reclaim the economy from the elites that have taken it over.

We will also be taking measures to show that we do not condone the people’s money being used for a self-serving political agenda. The PCOO, including USec. Badoy, is just among many who need to be put in their place. #

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

Real Duterte Legacy: Three years of slow growth sign of failing gov’t econ policies

by IBON Media

Research group IBON said that the economy is on its third year of slowing growth under the Duterte administration, and the slowest in eight years. This shows that government’s market-oriented policies are failing and its claimed economic gains are myths, said the group.

The Philippine Statistics Authority (PSA) reported 5.9% annual growth in gross domestic product (GDP) for 2019, missing government’s revised target of 6-7% growth for the year. Government attributed this to the delayed 2019 budget and election ban on infrastructure in the first half of 2019 and slowing agriculture due to weather-related factors like El Niño.

IBON countered government’s claim that the budget delay and ban on infrastructure pulled back growth last year, noting that the economy was already slowing prior to this. From 6.9% in 2016, the country’s growth in GDP slowed to 6.7% in 2017 and 6.2% in 2018. The 5.9% in 2019 marks the third year of economic slowdown under the Duterte administration. This is also the slowest growth in eight years or since the 3.7% in 2011, the group said.

IBON said that the economic slowdown is really due to the lack of strong foundation in agriculture and Filipino industry – made worse by government’s faulty market-oriented policies.

Growth in the agriculture sector dropped from 4% in 2017 to 0.9% in 2018, then slightly increased to 1.5% in 2019, the group said. Yet government continues its neglect and low prioritization of agriculture as reflected in the national budget. Agriculture’s share in the 2020 budget is just 3.5% – the lowest since 2004 at 3.3 percent.

Meanwhile, growth in manufacturing drastically declined from 8.4% in 2017 to 4.9% in 2018 and just 3.8% in 2019. The group said this is because domestic consumption and exports have weakened amid a protracted crisis and increasing protectionism in the global economy. Manufacturing is low value-added and overly dependent on foreign capital and technology, and produces for the world market.

IBON said that instead, government has relied on temporary external factors to drive growth, but these are weakening. For instance, overseas remittances are growing at a slower rate, decreasing from 5% in 2016 to 4.3% in 2017 and 3.1% in 2018. This rose to 4.6% in the first ten months of 2019 but is not likely to surpass the 2016 growth rate. Growth in exports are also falling from 19.7% to 13.4% in 2018 and just 3.2% in 2019.

The consumer spending and real estate booms that for a time fueled growth are also losing steam. Household consumption registered 7.1% growth in 2016 but dropped to 5.9% in 2017, 5.6% in 2018 and slightly grew to 5.8% in 2019. Real, estate, renting and business activities decreased from 8.9% growth in 2016 to 7.4% in 2017, 4.8% in 2018, and further fell to 3.7% in 2019.

IBON said that government has been attempting to boost a lackluster economy through more government spending and its infrastructure program. But this was not enough to stimulate growth. For instance, construction drastically fell from 14.9% growth in 2018 to just 7.7% in 2019.

IBON said that the country’s economic situation will worsen as long as government pushes policies that favor big business interests. It should admit its failure and take on real reforms needed to strengthen and develop agriculture and domestic industries and turn around the country’s flagging economy, the group said. #

(Kodao re-posts IBON reports as part of a content-sharing agreement.)

Amid Taal disaster, ‘Duterte Legacy’ disinformation campaign launched

by IBON Media

Research group IBON hit Malacañang’s launching of the ‘Duterte Legacy’ campaign while relief operations are still ongoing for tens of thousands of families displaced by the present eruption of Taal volcano. The campaign is not just rife with disinformation, said the group, but also insensitive politicking for the still distant 2022 elections.

Organized by the Presidential Communications Operations Office (PCOO), the Duterte Legacy Campaign was launched by Malacañang at the Philippine International Convention Center barely a week after Taal volcano erupted. Cabinet officials showcased the Duterte administration’s accomplishments in three “key pillars”: peace and order, infrastructure development, and poverty alleviation.

IBON executive director Sonny Africa criticized the launch for its insensitivity. “The government pleaded lack of relief funds and asked the public for support,” Africa said, “but here comes the PCOO using its bloated propaganda budget for presidential self-promotion conspicuously in anticipation of the 2022 elections.” The PCOO budget which averaged Php1.1 billion a year in 2011-2016 has greatly increased under the Duterte administration to Php1.7 billion for 2020.

Africa said that the PCOO campaign is only the latest disinformation effort of the administration. “The Duterte Legacy Campaign is deceiving the public about the real state of the economy with its selective and misleading presentation of figures.”

The PCOO claims 4.2 million jobs generated through ‘Build, Build, Build’ to hype its impact. Africa said this is an exaggeration though and points out, for instance, that this is even more than the 4.15 million total employed in the construction sector in 2019 reported by the Philippine Statistics Authority (PSA). There is so much double-counting that the number is virtually made up, he stressed.

The 4.5% unemployment rate is meanwhile disingenuous because the figure is only for the October 2019 labor force survey round. The PCOO would be more honest, he said, if they cited the higher 5.1% unemployment rate for the whole year which is already available from the PSA. Africa also said that the supposed 5.9 million Filipinos being lifted from poverty is only because a very low and unrealistic poverty line of Php71 was used to compute this.

IBON pointed out that the Philippine economy is in worse shape because of the unreformed neoliberal policies of the Duterte administration. The group noted that: growth has been slowing since the start of the administration to just 5.8% in the first three quarters of 2019; agriculture grew weakly at just 1.5% and manufacturing slowed to 3.7%. The group also cited government debt bloating to Php7.9 trillion; regressive tax reforms eating away at the incomes of the poorest 60% of the population; high real unemployment at 4.7 million; and more than 12 million families trying to survive on Php132 or less per person per day. #

(This article is being reprinted by Kodao as part of a content-sharing agreement with IBON.)