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Kalagayan ng mga magsasaka dahil sa Rice Tariffication Law at panahon ng pandemya

Inilahad ni Ariel ‘Ayik’ Casilao, Anakpawis vice chairman, ang kalagayan ng mga magsasaka sa panahon ng pandemya at perwisyo dulot ng Rice Tariffication Law.

Hiling ng mga magsasaka na ibasura ang Rice Tariffication Law dahil ito ang itinuturo nilang pasakit sa kanilang magsasaka at ang dahilan ng mababang presyo ng palay sa bansa.

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.

Bayanihan 2: Too small, hinders health and recovery

by Sonny Africa

The beggarly Bayanihan 2 bill preferred by the economic managers and imposed on Congress is much too small for the magnitude of the crisis facing the country. It makes health and recovery years away and farther than ever.

The Bayanihan 2 bill passed by the bicameral conference committee and ratified by the Senate is worth just Php165.5 billion. Of this, Php25.5 billion is even just a “standby fund”, only available once “additional funds are generated”.

Every centavo spent of Bayanihan 2 is welcome. There’s no doubt about that because the extraordinary scale of the health and economic crisis demands extraordinary spending. The problem is that the Duterte administration is spending far too little for the problem at hand.

Looked at in aggregate, Bayanihan 2 pales compared to the as much as Php1.9 trillion lost in gross domestic product (GDP) in 2020 because of the pandemic. This includes not just what is lost from the economy contracting but from what it should have been if it kept on growing.

But the shortfall is even clearer looking at the details. Bayanihan 2 allots Php30.5 billion for health-related responses spanning tracing, treatment, support for health workers, health facilities and pandemic research.

Bayanihan to Recover as One Act

Yet the health infrastructure spending doesn’t even make up for huge budget cuts here since the start of the Duterte administration. There’s Php10 billion budget for testing but this is in the standby fund and made contingent on finding new funds, which the economic managers are so sparing in doing.

The provision for Php5,000-8,000 in emergency cash subsidies is necessary but only Php13 billion is allotted for this. This is paltry compared to how the lockdown-induced recession has already displaced anywhere from 20.4 million to as much as 27 million of the labor force (43-57% of the labor force), according to IBON’s estimates.

Bayanihan 2 will help just 1.6-2.6 million beneficiaries at most and, even then, not by much. At Php5,000-8,000 per household, it will only give the equivalent of a token Php37-60 per person per day for a month. This paucity is little changed even if the Php6 billion budget for social welfare department programs, Php820 million for overseas Filipinos, and Php180 million for national athletes and coaches is added.

The budget for the transport programs includes Php5.6 billion for displaced public utility vehicle (PUV) drivers especially jeepney drivers. But this isn’t even enough to compensate them for the now five months that the government has kept them out of work and driven into poverty.

Much more substantial cash assistance is needed to improve household welfare in these difficult times. This also has macroeconomic benefit of boosting aggregate demand and stimulating a virtuous cycle of spending and production. Economic activity is impossible and production support will be futile if too many are jobless and have nothing to spend.

There’s Php77.1 billion for production and enterprise support. This includes Php24 billion for agriculture which gives the sector an emphasis in Bayanihan 2 that it is due. There is also Php39.5 billion for government financial institutions (GFIs) to support lending, Php9.5 billion for transport programs, and Php4.1 billion for tourism programs.

The total amount is however only going to help a few of the 997,900 micro, small and medium enterprises in the country employing 5.7 million workers – and probably none of the hundreds of thousands more informal and unregistered enterprises. If available, the additional Php15.5 billion under the standby fund for low interest Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) loans will help but still not be enough.

The Php8.9 billion for education is critical to keep the youth educated and eventually productive. But the budget is a mere fraction of the tens of billions of pesos needed to ensure that schools are safe and have internet connectivity, and to help parents keep their children in school. There are some 70,000 elementary and secondary schools and around 2,000 higher education institutions in the country.

The remaining Php3.5 billion for local government units (LGUs) will also certainly help the recipients but, measured against the scale of the intervention needed across the breadth of the economy, are almost tokenism.

The economy will rebound somehow but this will be slight and Bayanihan 2 is too small to hasten real recovery. The government is the only entity in a position to implement the huge stimulus program the economy needs and there needs to be more boldness to spend and, especially, to raise money for this.

The Duterte administration can raise the money needed if it really wanted to. In the short-term it can realign from infrastructure projects and at least some of the debt servicing to development agencies and friendly official creditors.

Big-ticket infrastructure projects that are no longer economically or financially viable, or are too import- or capital- intensive, can be put off or shelved. Debt service to development banks and the like can be restructured on the argument that there are more pressing uses for scarce government funds.

The government can actually wield its creditworthiness to borrow if needed on favorable terms. The best way to pay for any additional debt is not from more consumption taxes on the people but from higher income and wealth taxes on the country’s super-rich. The huge accumulated wealth concentrated in the few is more than enough for all the stimulus the country needs and can be the foundation of a credible medium-term fiscal plan.

A much more progressive tax system with higher direct taxes is the most rational and sustainable source of government revenues. This most of all means a wealth tax on the country’s super-rich (raising Php240 billion annually from just the 50 richest Filipinos), higher personal income taxes on the richest 2.5% of families (Php130 billion), and a two-tiered corporate income tax scheme (Php70 billion).

The economic managers’ obsession with creditworthiness is the binding constraint to fighting COVID-19 and the economic misery in its wake. This self-imposed fiscal straitjacket is misguided. Spending less, not spending more, is keeping the country off the path to health and recovery.

The country is grossly short-changed by Bayanihan 2. It’s all the people are getting not because it’s all the government can afford but rather because it’s all the Duterte administration wants to give.

Record number of COVID-19 ‘recoveries’ mere window dressing, expert says

The decision by the Department of Health (DOH) to categorize coronavirus patients with no or mild symptoms as “recovered” is mere cherry picking and window dressing, a community medicine expert said.

University of the Philippines College of Medicine professor Gene Nisperos said the decision is problematic as it was applied to many cases a World Health Organization (WHO) guideline meant only for individual patients.

“The WHO guidelines were only meant for individual cases. What the DOH did was to apply it en masse,” the medical doctor explained.

“These recommendations are for individual patients who are assessed and cleared by physicians. Simply extrapolating this to massive data is problematic,” he said.

In its July 30 update on coronavirus cases in the Philippines, the DOH reported 38,075 recoveries in a day.

DOH case bulletin for July 30, 2020

Citing new protocols in the US and Europe, the DOH said Thursday it is now tagging patients with mild or no symptoms as “recovered” 14 days from the onset of symptoms or by the date of specimen collection.

With nearly 40 thousand new “recoveries”, the DOH said the Philippines now has 65,064 patients who have recovered from the virus on the day it reported a record number of new cases at 3,954, bringing the country’s total to 89,374.

Nisperos however said even if the new protocol is a new DOH data management style, it remains inconsistent as it leaves out from the list of active cases the number of validation backlog that currently stands at 37 thousand.

The DOH said there are 22,327 active COVID-19 cases in the country.

The medical doctor said the DOH is merely cherry picking and window dressing the data.

“The data is being presented to fit a narrative instead of the narrative being based on the data,” he added. # (Raymund B. Villanueva)

Beyond capacity and overwhelming incompetence

by Maricar R. Piedad

The Philippines has been in varying intensities of community quarantine for 124 days—a world record in terms of the longest lockdown response to COVID-19. But the fight against the virus is still far from over, and now it seems like the country is back to square one—overwhelmed hospitals, rising number of cases, and overall chaos. All those days in lockdown have been wasted because of the Duterte administration’s louche decisions and inaction on building up the healthcare system’s capacity for COVID-19 response.

The government, more than ever, should acknowledge the graveness of the crisis. It should prioritize implementing solutions to flatten the curve rather than push business-as-usual measures towards so-called recovery when the imminent threat of the pandemic continues to stare every Filipino in the face.

So far, the measures it has taken—lockdowns, limited triage testing, and waiting for a vaccine from other countries—have been passive.

On the verge of collapse

The current healthcare system is now operating close to its maximum capacity with cases exceeding 63,000; already reaching the projection of cases 60,000-70,000 by the end of July and cases is increasing by almost 1,000 daily. Still, government has no clear and concrete plan to expand testing triage and capacity.

The sluggish COVID-19 testing is prolonging the country’s fight against the virus. Only a small portion of asymptomatic cases are being detected because of the absence of mass testing. Compared to the rest of the world, the Philippines has a low number of asymptomatic cases. But this is mainly because less than one percent of the country’s total population has been tested for COVID-19, almost six months after the first reported case. As of writing, only 1,009,511 individuals have been tested.

According to the adjusted estimates of the University of the Philippines (UP) as of July 13, the mean number of hospitalized patients is 23,747 and it can reach up to 28,024. As of now, the total hospital bed capacity is at 15,548, with 1,661 ICU beds, 10,410 isolation beds, and 3,477 ward beds. There are only 1,938 mechanical ventilators available. This means that hospitals may need to double their total number of beds before the end of July to accommodate these patients.

However, hospital bed capacity only increased by about 2,019 beds since last month’s total bed capacity of 13,529, according to the Department of Health (DOH). There was also no significant addition to the mechanical ventilators available which are important to treat critical cases. There was also no notable increase in the COVID-19-dedicated ward and ICU beds. Considering that more suspected and probable cases will be needing hospitalization, the influx of patients seeking medical attention will be beyond the country’s healthcare capacity. The exponential increase in the number of confirmed COVID-19 cases will overwhelm the healthcare system in no time and hospitals will be forced to deny patients due to the lack of facility.

The ICU bed occupancy rate, which is a huge indicator of critical care capacity, is already at 41.2% as of the latest DOH data drop. Ward beds are at 57.1%, and isolation beds are at 48.4% occupancy. Majority of the ward and isolation beds occupied are also located in private healthcare facilities. This is despite public hospitals having more COVID-19-allocated beds. This could mean that majority of COVID-19 patients are compelled to receive treatment from private institutions charging higher hospital bills and out-of-pocket expenses due to limited benefit packages from the Philippine Health Insurance Company (PhilHealth).

Out-of-almost-empty-pocket

Ballooning COVID-19-related expenses of Filipino patients is another major issue that the government should address. The medical bills of some COVID-19 patients have ranged from hundreds of thousands to millions of pesos, depending on the severity of the case. For instance, the bill of one recovered patient reached Php1.312 million for a 15-day confinement. According to the patient, a huge chunk of the medical bill were charges for laboratory tests, doctors’ professional fees, intubation, and the ventilator and respirator she used throughout her admission. Though all her medical expenses were fully covered by PhilHealth, this is no longer the case for COVID-19 patients admitted in accredited hospitals from April 15 onwards.

At the start of the pandemic, the Duterte administration assured the public that it has individuals infected with COVID-19 covered. However, PhilHealth announced in early April that it would no longer shoulder all expenses and would instead implement case rate packages for confirmed and probable cases effective April 15. According to PhilHealth Circular 2020-0009, patients with mild pneumonia can avail of a maximum coverage of Php43,997, while moderate and severe pneumonia patients can have a maximum amount coverage of Php143,267 and Php333,519, respectively. Critical patients, on the other hand, can access a Php786,384-worth maximum benefit.

But PhilHealth computations for these packages contradict the government’s assurances and may not be enough to cover the numerous medical procedures COVID-19 patients must undergo. Medical expenses in excess of the case rates will be paid out-of-pocket, and the amount could be considerable. If the patient with the Php1.312 million medical bill for example had been confined after April 15, PhilHealth would have just paid the Php333,519 maximum coverage for severe pneumonia patients. The remaining Php978,481 or almost 75% of the patient’s total medical bill would have to be paid out-of-pocket.

The abrupt economic shutdown resulted in most Filipinos losing income and struggling with the recent rise in the cost of living, especially the poor and vulnerable. Many of them can ill-afford to pay for medical expenses and may no longer consult doctors despite having symptoms.

Burning Out

Aside from the health infrastructure, the government also needs to reinforce the country’s human resource for health. Even before the pandemic, Filipino doctors and nurses were already treating patients beyond their capacity.  According to the Philippine Health Review 2018, there are 3.9 doctors and 8.6 nurses for 10,000 people. This medical worker to patient ratio is a far cry from the World Health Organization (WHO)-recommended 10 doctors and 20 nurses for every 10,000 population.

A Philippine Institute of Development Studies (PIDS) study also noted that, in a 24-hour set-up, 1 doctor and 2 nurses will be needed to treat 6 ward patients. Critical care patients will need 1 doctor and 1 nurse each as well as other special healthcare workers such as a pulmonologist, intensivist, infectious disease specialist, and mechanical ventilator technicians.

The available healthcare workers in the country will not suffice. With no significant addition to the health workforce, the country’s doctors and nurses will be overwhelmed and exhausted. There will also be a greater risk of infection for medical workers since having more patients could mean more exposure to COVID-19. There are already 3,805 healthcare workers infected and 35 of them have already died. 

The DOH decision to reassign physicians under the Doctors to the Barrios program is another sign that there are not enough doctors in COVID-19 treatment hospitals and reinforcements are urgently needed. However, only 5,216 health workers have so far been hired to fill the DOH-approved 9,297 slots for emergency hire. This slow hiring means medical frontliners continue to work beyond their capacity to treat the piling number of COVID-19 patients. The DOH itself has also noted the difficulty in hiring health workers because many of them have private services that they cannot leave. It also does not help that the entry level salary for healthcare workers is low. For example, a medical laboratory technician—which is under salary grade 6, can only earn up to Php 15,524 per month.

The country’s shortage of personal protective equipment (PPE) is also contributing to the huge number of infected health workers. According to the WHO, the global shortage of PPEs is affecting healthcare workers worldwide. This shortage could have been eased if the country had the means to manufacture its own PPEs, such as a local textile industry. But the country is reliant on imported PPEs. The Philippine Exporters Confederation Inc. (PhilExport) stated that despite factories’ willingness to produce PPEs, they cannot simply do so because of the lack of fabric and other materials. Had there been a Philippine industry for essential health protection needs, infection among front liners and in general would have been minimized.

Overcoming incompetence

The Duterte administration’s failed COVID-19 strategy in ending the current health crisis exposes its incompetence and lack of sensibility. The 124 days spent in lockdown and the opportunity costs incurred during this period have been wasted because the government failed to effectively intervene and keep the healthcare system from collapsing. It should now set its priorities straight and put all hands on deck to amplify health responses.

The government is not prioritizing funding for the healthcare system and social amelioration but it is pushing for ill-timed programs that will allegedly help in the country’s economic recovery. A concrete example is the continuation of the Duterte administration’s “Build, Build, Build” program despite the more pressing need to reallocate more funds for COVID-19 response.

The Philippine Program for Recovery with Equity and Solidarity (PH-PROGRESO) of the government shows that it is more inclined to save big businesses first before the Filipino people. The huge budget allocated for private corporations’ benefit should be realigned to help the overwhelmed healthcare structure. Fiscal measures for health and economic recovery should go hand in hand instead of pitting one against the other since overall economic performance is very much reliant on the well-being of the Filipino work force.  

Inadequate and relaxed response to COVID-19 hinders the Philippine economy from fully opening. It has only been two months since the gradual operation of businesses and since workers returned to their respective workplaces but the government is already losing control of the situation. Aside from the uncontrollable spread of the disease, hospitals are now reporting that they reached their maximum critical care capacity. Forty-eight hospitals already reported that their ICU beds are now full, and it is alarming that 50% of these hospitals are located in the National Capital Region (NCR). Meanwhile, Cebu City—which is the new epicenter of the disease in the country, is also nearing the danger zone in its critical care capacity. If the population of the Philippines’ major economic hubs keep on getting sick, then it will be much harder for the economy to recover its losses.

The government must protect first the Filipino people from the COVID-19 threat. Majority of Filipino workers are at risk of contracting the disease. The economy cannot recover without a healthy workforce to power it. According to UP’s analysis, half of the Philippines’ major economic contributors are considered high risk spreaders of COVID-19, such as construction workers, security guards and commercial drivers. Many of them are minimum wage earners lacking adequate social benefits and protection. This makes them more vulnerable to infection and with limited means to pay for expensive COVID-19 treatment.

The government should speed up the efforts in broadening and building up testing and hospital capacity.  More than ever, it should make healthcare accessible and affordable for every Filipino. This includes making COVID-19 testing and treatment free for all. The pandemic will not be over as long as infected Filipinos are not isolated and treated due to the lack of facilities and expensive healthcare.

In the end, the entire Philippine economy will suffer if Filipinos are not protected from this disease. The economic downgrade will be far greater if the coronavirus crisis lasts longer. The government cannot afford another lockdown since it will not only endanger the economy but will also bring intense hunger and more hardship. It must act now and prevent the health system from collapsing and the Filipino people from succumbing to both the pandemic and to poverty. #

The unbelievable indifference of the Duterte administration

By Sonny Africa

The Duterte government insists that it is successfully responding to the COVID-19 pandemic. The reality is a little bit different – it hasn’t done enough, and is planning to do even less.

The coronavirus is spreading faster than ever. It took over three months to reach the first 10,000 confirmed cases but less than a week to add the last 10,000, at over 57,000 to date. University of the Philippines (UP) researchers forecast between 100,000 to 131,000 cases by the end of August.

Characteristically, the government’s containment measure of choice was a military lockdown – among the fiercest and longest in the world. It justified this as harsh but necessary, repeating a favored talking point used to justify all sorts of sins.

The effect on the economy and the people was certainly brutal.

The country was plunged into the worst crisis of mass unemployment in its history with 14 million unemployed and a 22% unemployment rate in April 2020, by IBON’s reckoning. The combined 20.4 million unemployed and underemployed are over two-fifths (40.2%) of the presumed labor force. These correct for serious underestimation in officially released figures.

The joblessness and collapse in livelihoods are expected to ease as restrictions are relaxed. But whatever improvement will still not be enough to return to a pre-pandemic state.

The country’s gross domestic product (GDP) is projected to contract by 2.0-3.4% for the whole of 2020, according to the government’s Development Budget Coordination Committee (DBCC). The World Bank has a slightly more optimistic projection of -1.9% while the International Monetary Fund (IMF) and Asian Development Bank (ADB) see it worse at -3.6% and -3.8%, respectively.

This will be the worst growth performance in 35 years since the -7.3% (negative) GDP growth in 1983 and 1984. But if the low estimates materialize, it will also be the biggest decline from positive growth ever recorded.

As it is, the economy is well on the way to its fourth straight year of slowing growth. It already contracted at -0.2% growth in the first quarter of 2020 with just two weeks’ worth of lockdowns. The second quarter figures that will come out in August will be much worse.

Unhealthy response

No one is likely to have thought that the worst public health crisis and economic decline in the country’s history would be enough to spur the Duterte administration to reform its anti-democratic and anti-development ways. It didn’t.

The government’s military-dominated COVID-19 response team has proven unfit for purpose and the steeply rising cases today point to the protracted lockdown being squandered. Yet the rise in reported cases do not even give the complete picture.

To date, there’s a validation backlog of over 15,000. The positivity rate of 12.4% meanwhile indicates that testing is still, months into the pandemic, far below the levels needed. Local transmission is still gaining momentum even as other Southeast Asian countries have already stopped theirs.

The hazy picture is a poor starting point for the contact tracing, isolation and selective quarantines needed. But the rise in COVID-19 cases is sufficient to show how social distancing and other precautionary measures can’t go far enough.

Assuming all pandemic-related deaths are accounted for, the 1,534 reported deaths are still relatively few and the number of daily fatalities fortunately fewer than the peak in March. This may however soon change as the virus spreads in the coming weeks and as the health system becomes overstretched even just by those who can afford it.

Hospital capacity hasn’t been beefed up so much as portions of it carved out at the expense of non-COVID-19 cases. The National Capital Region (NCR) and Cebu are the pandemic’s epicenters in the country. As much as 19 NCR hospitals are at or nearing their capacity of ICU beds for COVID-19 patients – 14 of which were acknowledged by the Department of Health (DOH) last week – while Cebu’s hospitals are already overwhelmed.

Hyped assistance

The inadequacy of the health response is more disturbing in how the time for this was bought with lost incomes, small business closures, joblessness and hunger. Tens of millions of Filipinos even suffered more than they should have because of similarly inadequate emergency relief.

At the start of the lockdowns, 18 million beneficiary households were promised Php5,000-8,000 in monthly cash subsidies for just two months. That right there is an immediate problem – the lockdowns are running on four months now, since mid-March, with only partial easing in June.

Emergency subsidies reportedly reaching 19.4 million beneficiaries under various programs of the departments of social welfare, labor and agriculture sounds impressive.

However, the aid was very slow in coming. Most beneficiaries had to wait 6-10 weeks before getting their first monthly tranche.

The aid is also very stingy. Taken altogether, the first tranche of the cash subsidy programs only amounts to an average of Php5,611 per beneficiary family. Over the last four months this comes out to just Php11 per person per day.

The government has even recanted and said that only 12 million beneficiaries will get the second tranche. But the number of those who will actually get this second tranche may be even less than that. The government is invoking bureaucratic difficulties to explain why only 1.4 million of the 12 million have received this tranche to date.

These emergency cash subsidies are also much lower than the latest official poverty threshold of Php10,727 monthly for a family of five. Yet this miserly relief will even seem generous in the period to come because little more is forthcoming. The official government policy was succinctly put by the presidential spokesperson recently: “We cannot afford to give ayuda (aid) to keep everyone alive.”

Business as usual

The Duterte administration’s lockdowns precipitated what may be the greatest economic collapse in Philippine history. The lockdowns per se are of course temporary – indeed, as too the pandemic, even if this will linger for at least another year or more.

Though temporary, the simultaneous demand and supply shock to the Philippine economy, other countries, and the global economy as a whole is unprecedented in the modern era. The world economy is said to be undergoing its worst recession since the Great Depression.

Yet apart from a momentary surge in emergency relief and despite lip service to the economic crisis, it bizarrely still seems to be business as usual for the economic managers. There are a couple of reasons for this.

The most basic is how the economic managers – and most of our political leaders – are blinded by the free market dogma imbibed over four decades of neoliberal globalization. There is a rigid faith that market forces will be enough to meet the pandemic-driven economic challenge. This is matched by an inability to grasp that responsible state intervention is needed not just to deal with the crisis but for long-term national development.

But there is also an extreme narrow-mindedness common among many afflicted by that dogma – that ‘creditworthiness’, ‘competitiveness’ and ‘investor-friendliness’ are not just a means to but actually ends of development. The people who make up the majority of the economy are peripheral and ever in the margins.

These go far in explaining the lack of urgency and, apparently, seeing the current crisis as an inconvenient but minor speed bump on the highway to free market-driven progress.

Fragments of a response

Genuine attention would start with immediately coming up with a plan fitting the vastly changed pandemic-driven crisis conditions. Nearly six months into the pandemic, all that the people have are fragments – including fragments which are self-evidently exaggerated to give the impression of substantial action.

The economic team came up with a “4-pillar strategy” in April that was eventually rebranded as the Philippine Program for Recovery with Equity and Solidarity (PH-PROGRESO). Supposedly worth Php1.7 trillion or an impressive 9.1% of GDP, this figure was grossly bloated by double-counting of interventions and their sources of financing, by conflating actual spending with merely foregone tax and tariff revenues, and by including additional liquidity from monetary measures.

The Inter-Agency Task Force Technical Working Group for Anticipatory and Forward Planning (IATF-TWG for AFP) released its We Recover As One report in May. This seemed more detailed, comprehensive and forward-looking. There are some relevant health and education measures.

But some very important measures are missing – expanding the public health system, social protection to help everyone in need, and protecting jobs, wages and workers’ rights. Trade, industrial and agricultural measures also seem oblivious to unsound fundamentals, the global crisis, and accelerating protectionism. On the other hand, unfunded feel-good platitudes are aplenty.

The economic managers started working with Congress on a Bayanihan 2 bill in June. This replaces the Php1.3 trillion package that Congress originally proposed but which the finance department summarily shot down ostensibly for lack of funds. The Bayanihan 2 proposal is now just one-tenth in size at Php140 billion.

At present, the stinginess of the economic managers is the biggest binding constraint to addressing the pandemic, alleviating economic distress of poor households, and economic recovery. The Php140 billion is much too small compared to the magnitude of the crisis at hand. At the same time, the sweeping insistence on infrastructure as a magic bullet and on sacrosanct debt servicing means continued unproductive spending rather than on what would have the greatest development impact.

A Philippine Economic Recovery Plan was supposed to be made public at the pre-SONA forum of the economic and infrastructure cluster on July 8. But this was not presented and is still strangely kept secret. Neither the Department of Finance (DOF) nor the National Economic and Development Authority (NEDA) websites share this with the public, and a direct request was declined.

It’s five-and-a-half months since the first confirmed COVID-19 case in the Philippines, and about four months since declaring a public health emergency, a state of national emergency, and the start of lockdowns. The Duterte administration has throughout portrayed itself as doing everything it needs to.

In reality, it seems to be doing as little as it can. A new anti-terrorism law was apparently even seen as more urgent than clinching a stimulus program. This languid COVID-19 response is bringing us to the edge of the precipice on both the health and economic fronts. #

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

The anomaly of transport modernization (Part II)

by Rosario Guzman

Read the first part here:

Government’s misplaced scheme

In many instances, the solution to the complex transport problems of Metro Manila lies in the physics of the problem, in the same way that dealing with COVID-19 requires medical science. But the Duterte administration has simply picked up its pre-COVID proposal of “jeepney modernization” and used the pandemic to justify finally pushing for it, amid protestations by jeepney drivers and the adverse impact on millions of commuters.

The government is a signatory to the Bangkok Declaration on Sustainable Transport Goals (Bangkok 2020) on “environmentally-sustainable” transport policy. This is also in relation to the ADB’s Sustainable Transport Initiative that is ultimately premised on the continuation of “free market” and “inclusive” economic growth. The Duterte government’s accomplishment in fulfilling Bangkok 2020 rests on the jeepney modernization program. Ultimately, this is important for the Duterte administration to attract transport infrastructure investments as well as to push for the sale of brand new, imported, so-called environment-friendly, and modern jeepneys.

Through the Omnibus Franchising Guidelines (OFG) that the DOTr issued on 19 June 2017, the government is requiring the make of the body and engine of the traditional jeepney to be compliant with the requirements set by the Land Transportation Franchising and Regulatory Board (LTFRB). These requirements definitely prioritize electric jeepneys (e-jeep), while pushing away the traditional jeepneys which need to go through numerous hurdles to get licensed to operate. These hurdles include: upgrading combustion engines to comply with Euro IV and similar emissions standards; complying with the LTFRB-set age-limit of oldest vehicle part; refurbishing and rebuilding that should pass the type approval system test; and still finally going through the Land Transportation Office (LTO) for a roadworthiness test to get registration renewal.

Concerned automotive engineers, scientists and mechanics contest the need to phase out traditional jeepneys and argue that the government should support locally manufactured environmental solutions. They also question the availability of the parts of the imported modern jeepneys in case of repairs, unlike with the traditional jeepneys that can be replaced easily. They also claim that the body engineering of the modern jeepneys is not suited to Metro Manila’s narrow roads and more prone to accidents. Environmentalists have also criticized the government’s going electric or Euro IV as hypocritical when its own energy program is reliant on coal and other fossil fuels.

But the OFG just keeps on narrowing the chances for traditional jeepneys to survive. The OFG also requires a fleet size of 15 units for any type of PUV for six months for new routes, which prevents small operators from applying for new franchises. Actually, even medium-scale operators – if they exist – are constrained and marginalized under the modernization program. The modern jeepney costs about Php1.6 million to as high as Php2.5 million, which means that an operator needs at least Php24 million to get a franchise.

The DOTr has stated that the government is not phasing out jeepneys but simply modernizing. However, the government plays with words. The jeepney modernization program will ultimately kill the livelihoods of thousands of jeepney drivers and complete the corporate capture of the ‘last-mile’ resort of millions of Filipino commuters.

Still pushing for Build, Build, Build and foreign ownership

The Duterte administration is also not compromising its Build, Build, Build (BBB) infrastructure projects, despite their questionable viability even before COVID-19 struck and their diminishing relevance now. Of the 100 infrastructure flagship projects (IFPs) worth Php4.3 trillion, 73 are for transport and mobility. The government does not have plans to strengthen economic production so the projects will just end up reinforcing a service economy dependent on import-export trade, foreign investments and tourism. Much of the construction materials used are even imported rather than produced locally.

The transport sector is reflective of how the government has lost its capacity to govern and manage public services because of privatization. This raises questions therefore on government’s absorptive capacity for such a grand infrastructure program. Four years into the ambitious BBB, there are only two (2) completed and nine (9) ongoing projects to date. The Duterte administration has even increased the IFPs from 75 to 100 to make BBB “more feasible”. But it appears that only 38 projects will be finished by the end of its term.

The future of BBB in the time of COVID-19 is precarious. But like a beaten beast, the Duterte administration refuses to yield. The pandemic is posing serious challenges to the continuation of BBB, apart from the program’s innate weakness of simply being aimed at attracting foreign investments and momentarily stimulating a slowing economy.

The most obvious challenge for the construction industry is physical distancing because  masses of workers need to gather to finish a project. The IATF suspended construction at the start of the lockdown but later allowed it, while passing on to the construction companies the responsibility of ensuring that workers comply with health protocols.

The next challenge is how travel restrictions and physical distancing will certainly dampen transport, travel and tourism businesses, and foreign trade and investment for a long time. These are the sectors that BBB wishes to be relevant for – but they are less and less important for the economy’s survival in the time of COVID-19.

Another challenge is the commercial viability of the projects on which they are all premised. Instead of catering to genuine public service, the completed projects are designed to be run by private transport corporations who will collect user-fees for their profitability and sustainability. The most expensive BBB projects are mass commuter railways whose viability depends on expensive fares that will be beyond the reach of the majority of the poor and working people.

But the greatest challenge is how BBB’s socially inappropriate orientation can be shifted to support the proper health response to COVID-19. The pandemic has revealed how weak our health system is – lacking facilities and equipment, lacking health personnel, and even lacking the means to transport health personnel. Not a few health frontliners have had fatal road accidents biking to work due to lack of transport support from the government. There is not even a single health infrastructure facility in the IFP lineup. The administration has made pronouncements that it would reorient BBB to respond to the health crisis but has yet to release a new IFP list.

Meanwhile, one priority legislation of the administration is the amendment of the Public Services Act (PSA). On March 10, just before the lockdown, the House of Representatives passed on final reading House Bill (HB) 78 to amend the PSA. It is now at the Senate for deliberation and approval. These amendments include narrowly defining public utilities to bypass Constitutional restrictions on foreign ownership. Sectors considered public services, transportation included, can be opened up to complete foreign ownership. This further undermines public interest and national development. The PSA amendments will pave the way for the full foreign ownership of the mass transport system and government’s eventual surrender to private transport and transport infrastructure corporations.

The right direction

The Duterte government can address the transport crisis in the time of COVID-19 and in fact can look at the pandemic as an opportunity to overhaul the system. The health protocols may be followed indeed if only the government recognizes and addresses the transport crisis in a scientific manner.

There should be a first-step long-term modal shift from road to rail. The government can start by upgrading and adding rolling stock and rails to the train system. The corporations and officials of government agencies who forged lopsided privatization contracts should be held liable for poor service including breakdowns and accidents. The Philippines is among the first countries in Asia to have an urban rail system and has a long history of government running rail transport systems. These assets can be nationalized again and returned to public control. Rail transport can then be central to urban planning as well as to the dispersal of economic activities to the rural areas.

An efficient rail transport system, not to mention fully linked and accessible, will be the basis of an equally efficient route rationalization plan for PUBs and PUVs. The government should seriously conduct its own study to identify where the mass of commuters can have the most optimal travel time, including number of stops, from their workplaces to their homes. This should also include designation of walkways and bike lanes. It should not rely on self-interested privatization stakeholders to make such studies.

For a route rationalization plan to be truly systematic, PUBs and PUVs along with rail should be publicly run. Government can start by organizing PUBs and PUVs into cooperatives rather than allowing only single or corporate proprietorship of large fleets. It can also incentivize cooperatives to improve their service and compliance. Then, government can move on to careful consolidation of fleets through joint ventures and eventual nationalization. Such crucial steps will finally make PUB and PUV modes more economical and fares more affordable.

The DOTr is proposing to introduce service contract arrangements with private transport operators for the “new normal”. It also aims to shift from the “boundary system” to daily fixed wage for drivers and conductors so they can have steady incomes regardless of reduced ridership. This sounds acceptable, especially if we consider that transport groups have long been clamoring for government to abolish the “boundary system” to avoid competition-driven stresses, road hazards, and transport unpredictability.

However, the DOTr proposal remains outside the vision of living wages for transport workers, promoting their welfare and strengthening their unions, subsidizing commuters and controlling fares, and diminishing competition among the private contractors with stronger public control. In short, the current proposal should be within the framework of nationalization, lest it end up being another privatization contract.

The proposal is welcome if it is not being done in the context of the government’s jeepney modernization program. The Duterte administration cannot even give sufficient social amelioration to displaced drivers and conductors during a pandemic.

Moreover, government should once and for all restrain the explosive private car sales that defies all public mass transport logic. These just give the automotive corporations maximum returns on their businesses.

Finally, the pandemic gives us the vast opportunity to rethink sustainable development perspectives. The need for agrarian development and national industrialization cannot be overemphasized. But the government can start with arresting the anarchic building of offices especially for business process outsourcing and online gambling, shopping malls, hotels and leisure structures, residential and private subdivisions, and condominiums. Metro Manila’s urban development Is geared to increasing real estate profits and the wealth of the country’s economic oligarchs at the expense of public mobility and welfare.

Government can start by planning an economy that genuinely addresses severe inequalities existing pre-COVID-19 that, without corrective steps, will persist even far beyond. #

Ang sinapit ng mga drayber

“Dati, kami ang kinakawayan. Ngayon, kami ang kumakaway [para mamalimos].”–Joel Caligayan, tsuper ng jeep biyaheng Rosario-Cubao

The Old and New Bilibid Prisons in the Time of Pandemics

More than a century ago, Philippine prisons reeled from a flu pandemic. History might be repeated without adequate healthcare for prisoners and drastic interventions to stem the Covid-19 outbreak.

By Aie Balagtas See/Philippine Center for Investigative Journalism

Will the Philippines repeat the deadly record of the 1918 influenza pandemic in its jails and prisons?

On May 21, Henry Fabro, chief physician of the Bureau of Corrections, said fatalities in New Bilibid Prison (NBP) reached an “alarming” level: five inmates died in just one day.

At least 80 prisoners died from May 1 to May 19. The figure surpassed the prison camp’s average mortality rate of 50 to 60 deaths per month. Most deaths came from the Medium Security Compound, where inmates were cramped after returning to prison amid the Good Conduct Time Allowance (GCTA) fiasco.

“The numbers are alarming, that’s why I immediately hired two additional doctors and several nurses,” Fabro told the Philippine Center for Investigative Journalism in an interview.

“We wanted to contain it. So far, we were able to pull the death rate back to two per day,” he added.

In May, 40 out of an estimated 28,000 NBP inmates tested positive for Covid-19. One death was attributed to the highly contagious disease.

The death toll due to Covid-19 rose to 15 in June: 12 from NBP in Muntinlupa and three from the Correctional Institution for Women (CIW) in Mandaluyong, according to the Bureau of Corrections.

Fabro believes half of NBP inmates are infected with the virus. However, gauging the true extent of the contagion – with scant testing that yields “snail-paced” and “unreliable” results – is impossible, he said.

Case in point: two inmates were discharged from the NBP isolation area because the Department of Health said they tested negative for the virus, Fabro said. Days later, the health department said it made a mistake.

“We had to repeat the test and expand it to those they (inmates) interacted with,” Fabro said.

Reliable testing, he said, is important to slow infections in penitentiaries and determine which prisoner should be isolated.

This was not the first time a global pandemic tore through Philippine prisons. In 1918, more than 300 inmates throughout the country died. There were nearly 200 deaths at Old Bilibid alone. Back then, the national prison was right inside the capital Manila, on Oroquieta Street in Sta. Cruz district.

A 2009 study titled “The Philippines in the World of Influenza Pandemic 1918-1919” by historian Francis Gealogo said “almost all of the [Bilibid] inmates became sick of the disease during the height of the epidemic in October and November 1918.”

“Among the 2,674 cases of this disease treated during the year, 71 cases of lobar pneumonia complications occurred with 31 deaths. Almost all of the inmates had influenza, and of those who contracted complications in their respiratory organs nearly half died,” he said.

Gealogo said hospitals were so overcrowded during the flu outbreak that 1,897 Bilibid patients who could not be admitted were treated in their own brigades. “Due to influenza and pulmonary tuberculosis, the death rate for the year 1918 was higher than that of 1917,” he added.

The Annual Report of the Secretary of War published in January 1919 said a total of 378 inmates from four prison facilities died during the pandemic.

Old Bilibid had the most deaths with 193. It was nearly double the number of the previous year, which recorded 107 deaths.

Outstations were not spared. The report said Ihawig Penal Colony in Palawan had 72 deaths, San Ramon Penal Farm in Zamboanga City had 45 and Corregidor Island, 68. In 1917, Iwahig recorded 23 deaths, while San Ramon and Corregidor had four and 39 deaths, respectively.

The Old Bilibid Prison, built during the Spanish colonial regime in 1866, is now Manila City Jail.

A century ago, pulmonary tuberculosis was the chief cause of morbidity and mortality among prisoners.

Today, deaths in prisons are a result of multiple problems, such as poor healthcare services, lack of facilities and lack of government manpower and resources. The NBP hospital inside the maximum security compound, for instance, cannot adequately serve the overpopulated prison, and renovations were put on hold because of the lockdown, Fabro said.

The prisoners’ fear of isolation and hospitalization are another factor, Fabro added.

Inmates are also refused admission in hospitals, even in those run by the government, the official said. A nongovernment organization (NGO) working with prisons made the same observation, explaining that inmates are often turned away because they do not have money and relatives to accompany them. Prison guards are not allowed to accompany inmates in hospitals.

The coronavirus outbreak has made the problem worse.

Fabro said hospitals often rejected inmates by claiming they were operating at full capacity. “Recently, a dialysis patient was refused because the hospital learned that NBP has Covid-19,” he said.

The Department of Health did not respond to queries on hospital policies on the admission of sick prison inmates.

Fabro said emergency cases from NBP and the CIW were not spared of the apparent discrimination.

“Our Alpha Patient [of Covid-19] in CIW was refused by different hospitals in Mandaluyong. After hospital shopping, her relatives found a hospital that accommodated her,” Fabro said.

The Alpha Patient, or the first Covid-19 case in CIW, died on April 27. #

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Aie Balagtas See is a freelance journalist working on human rights issues. Follow her on Twitter (@AieBalagtasSee) or email her at [email protected] for comments.