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Balik-pasada at ayuda, hiling ng mga tsuper

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Ginanap ngayong araw, Hunyo 27, ang Araw ng Pakikiisa para sa mga Jeepney Driver. Nagkaroon ng magkakahiwalay na pagbibigay ng ayuda sa iba’t ibang pondohan ng mga tsuper sa Metro Manila.

Pangunahing tinulungan ng Bayang Matulungin, isang proyekto ng Bayan Muna at PagAsa, ang mga tsuper sa Project 3, Quezon City, Samson Road, Caloocan City, at Rizal Ave., Manila. Nasa mahigit isang daan ang kanilang natulungan.

Panawagan ng mga tsuper na ibalik na sila sa pamamasada at bigyan ng ayuda ang bawat isa. Lampas 100 araw na ang lockdown, ganun din ang kanilang tigil-pasada. Kasama ang kanilang pamilya sa mga apektado ng kanilang kawalang-trabaho. (Bidyo nila Jo Maline Mamangun, Jola Mamangun, at Reggie Mamangun)

PH Debt: All’s well that swells

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by Rosario Guzman

Lenders have offered to defer debt payments for those severely affected by the lockdown. The World Bank has encouraged the Group of 20 nations to postpone repayment of official bilateral credit, although has not yet considered suspending debt payments owed it. The International Monetary Fund has approved debt relief to its 25 poorest member countries. Commercial banks have offered a 60-day grace period for loans, including for household debts borrowed through credit cards. Even informal moneylenders in the Philippines’ urban poor communities have reportedly stopped collecting loan installments for a while.

These are not necessarily all done out of sheer goodwill. In many cases they seek to stop debtors from succumbing to severe debt-driven crisis due to the pandemic which would stop them from paying anything at all in the future. In short, they are also favorable to the creditors.

The Duterte government, with its much-brandished good credit standing, could have moved for debt relief too but instead, at the height of the COVID-19 pandemic, it started borrowing more. The finance department underscores the need for government to borrow from foreign sources to fund its economic recovery plan. Multilateral and country creditors have unsurprisingly exploited the situation and recycled funds to lend.

Do we really need to borrow for COVID response? People have asked. How are we going to pay for all of these debts?

Accumulating debt

The Duterte administration’s Philippine Program for Recovery with Equity and Solidarity (PH-PROGRESO) is worth Php1.7 trillion, Php561 billion (US$11 billion) of which is targeted by the Department of Finance (DOF) to come from bilateral and multilateral loans and global bonds. There is another Php404 million (US$8 million) in foreign grants.

From March 14 to June 4 this year, based on IBON monitoring, the Duterte government has already obtained foreign commitments of US$3.95 billion in loans, US$17.3 million in grants, and US$5 million in technical assistance (TA) – all for addressing the COVID-19 pandemic. The Philippine-headquartered Asian Development Bank (ADB) accounts for US$2.1 billion of the loans plus all of the TA and much of the grants. The World Bank accounts for US$1.1 billion, and the China-led Asian Infrastructure Investment Bank (AIIB) for US$750 million. There are US$9.3 million in grants from USAID. In sum, there are 7 project loans, 2 grants, and 1 regional TA so far.

Loans amounting to US$3.95 billion are, at the current exchange rate of Php50.05 to a US dollar, equivalent to Php197.7 billion. This increased the outstanding national government debt which has already risen from Php7.7 trillion by the end of 2019 to an astounding Php8.6 trillion by April 2020. The Php869-billion increment in the last four months far surpasses the full-year increments of the last three years.

Government securities increased by Php436 billion, while the Bangko Sentral ng Pilipinas used its repurchase facility to lend Php300 billion to the national government for COVID response. Meanwhile, external debt increased by Php133.1 billion from December 2019 to April 2020. In April 2020, the Duterte government’s foreign debt grew 16.5% year-to-date and 16.4% year-on-year, or the biggest increase in the last four years.

The Duterte government has already reached 66% (or Php919.5 billion) of its Php1.4 trillion projected gross borrowings for the year. If the planned foreign financing for PH-PROGRESO alone is realized, the government would already go over its borrowing projection. This does not yet include the uncontrollable increase in domestic debt due to the continuous issuance of government securities. Domestic debt comprises 68% of the outstanding national government debt.

For whose sake, really?

The loan commitments are specified for strengthening healthcare, augmenting funds for socioeconomic relief, and providing economic stimulus for agriculture and micro, small and medium enterprises (MSMEs). There are also wage subsidies for small enterprises and support for repatriated overseas Filipino workers (OFWs).

These are urgent things to attend to during the pandemic that the Duterte government has not competently addressed. Instead, we have only witnessed how government’s policy of health privatization, neglect of essential economic sectors, and myopic understanding of the poor have made it ill-prepared for an emergency such as COVID.

COVID-19 is unplanned thus the need to apply for a loan – that has been the official line. Are the loans meant to help us cope with the coronavirus, while government opts to keep spending for its neoliberal policies and to protect business?  Actually, these urgent loan-financed items are part of a larger package which includes even bigger support for businesses who get financial relief in the form of tax deferrals, low-interest loans, and credit guarantee schemes.

The country’s creditors are more straightforward. They will provide budgetary support so that the country’s economic managers can continue spending on the administration’s Build, Build, Build (BBB) infrastructure projects, foreign investment attractions, tourism and other boosters of the otherwise slowing, and now contracting, economy.

The ADB has pledged US$1.5 billion from its COVID-19 Active Response and Expenditure Support (CARES) program for fiscal management, among others. The AIIB’s US$750 million loan is co-financed with CARES. The AIIB only has loan facilities for infrastructure investment and does not have a ‘development financing’ orientation. It recently launched a COVID recovery facility but even this is oriented towards addressing liquidity problems, providing fiscal and budgetary support in partnership with multilateral banks, and building health infrastructure – all so that governments can focus on COVID impacts and leave infrastructure funds alone.

The more recent Php400 million loan commitment of the ADB to strengthen domestic capital markets and investments is more explicit. This is to enable the Duterte government to fund infrastructure at lower costs and to enable the private sector to raise infrastructure funds from capital markets.

COVID-19 is unplanned, while the Duterte administration’s focus is unchanged. The government is still fixated on burnishing the economy’s image to attract foreign investors, and will only address the emergency by as much as it can borrow. This reinforces the country’s vicious spiral of debt and shallow economic growth. Creditors are complicit in this neoliberal COVID response.

Protecting profits

But what really demolishes the argument that government needs to take out a loan for COVID-19 is that there are viable sources of money that government chooses to forego in behalf of big business. Case in point is the DOF-backed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, the renamed second package of the unpopular Tax Reform for Acceleration and Inclusion (TRAIN) Law. The first package taxes consumption goods by the poor and relieves the rich of paying income taxes. CREATE in turn reduces corporate income tax from 30% to 25%  from July 2020 until 2022 and thereafter 1% yearly cut until 20% by 2027. This gives corporations up to Php667 billion worth of tax breaks over the next five years, which is the largest in the country’s history.

CREATE is at the core of the administration’s recovery plan, PH-PROGRESO. It also proposes Php133.7 billion in loans and guarantees, Php142.8 billion in other tax cuts and foregone revenue, and Php233.3 billion in additional liquidity. PH-PROGRESO declares prioritizing the resumption of BBB. To do so, it incentivizes big business with tax cuts and liquidity and equity infusion through government intervention and borrowing in the guise of helping them recover from the pandemic recession. The creation of jobs and recovery of incomes of the poor and vulnerable are an afterthought.

Indeed, government has to revive the economy from the unnecessary lockdown, but this has to start with what is truly essential. The COVID crisis is an extraordinary opportunity for government to strengthen national production in agriculture and industry – a surefire way to stimulate employment and consumption. But agriculture and the MSMEs that make up the majority of the country’s enterprises are extremely marginalized.

In the House-approved Php1.3 trillion Accelerated Recovery and Investments Stimulus for the Economy (ARISE) bill, agriculture gets a paltry Php66 billion and MSMEs are allocated only Php125 billion in loans and guarantees. The COVID crisis is also a golden chance to bridge the chasm between rich and poor, which has become stark especially during COVID. But quite to the contrary the Duterte government has relieved the rich and increased borrowing to sustain such economic order – an addition to the mounting burden of the poor.

Unpayable future

The DOF reiterates that the debt is payable and that the country is in no way headed to a debt crisis. It says that the debt-to-gross domestic product (GDP) ratio is only around 39.6% at the end of 2019 and 43.3% as of March 2020. The ratio indicates manageable levels, says the government, and is much less than in 2000-2010 when the debt-to-GDP ratio hovered around an annual average of 60% until it started going down in 2011 at the start of the country’s high growth episode.

But those days are gone. Fast economic growth peaked in 2012-2016 then steadily declined since the start of the Duterte presidency. Before COVID, the administration tried to but could not cover up the slowing economy. The GDP growth slowed from 6.9% in 2016, 6.7% in 2017, 6.2% in 2018, and to just 6.0% in 2019, the slowest in eight years. The economy shrank in the first quarter of 2020 by 0.2%, and the economic managers are seeing a severe decline in full-year real GDP growth to -0.6% to 4.3 percent.

All the sources of economic growth that government has relied on – OFW remittances and foreign direct investment in BPOs and export manufacturing – have slowed down since the beginning of the Duterte administration. And these are definitely headed into a tailspin as the global economy sinks deeper into crisis.

The Duterte government has never considered the erosion of agriculture and manufacturing to arrest the economic slowdown. Instead, it has artificially boosted economic growth with pump-priming – increasing government spending to its highest level as percent of GDP. Infrastructure spending comprised 4.7% of the GDP in 2019 and is targeted to reach 7.0% of the GDP by 2022. It shall be the highest among all the administrations.

BBB projects are the Duterte administration’s preferred drug for resuscitating the ailing economy before it slips away. However, it has been borrowing heavily for this. Of the Php4.3 trillion needed for the 100 flagship infrastructure projects of the administration, 83% is expected to come from official development assistance (ODA), mostly in the form of loans. The Duterte government’s borrowing binge is unprecedented – on a monthly average, it is borrowing Php45.6 billion, almost three times as much as Aquino (Php19.0 billion) and over twice as much as Arroyo (Php21.2 billion).

The fiscal deficit is thus a growing problem, with the Php660.2 billion deficit in 2019 equivalent to 3.5% of GDP. The fiscal deficit is already at Php348 billion as of April 2020.

Here is why the debt is eventually unpayable and such a huge burden. First of all, ODA loans may be at concessional rates but are tied to the conditionality of using the technology, materials and expertise of the creditor country. In the case of China, this includes even the use of Chinese labor. Secondly, absorptive capacity in a program as grand as BBB is a major issue. The Philippine government lacks the bureaucratic and technical capacity to implement all the grand infrastructure projects. This capacity has been eroded by decades of privatization and deregulation. The private sector, on the other hand, is not that deep because of the economy’s backward fundamentals. Third, BBB’s main focus is mobility for the benefit of the service and trading oriented economy, and not in building Philippine agriculture and industry. Thus the infusion of infrastructure capital or even the construction of the facility will not be useful in the long run for national development.

Lastly and most ironically, we are being obliged to fully pay for this mounting debt. This early, the government is already thinking of taxing and raising government fees on the very coping mechanisms of the dislocated working people. For instance, the economic managers want to tax online selling even as people are losing their sources of livelihood, or want to collect bike registration fees as workers seek alternatives to the poor public mass transport, among others. The government already failed to meet its revenue target in 2019, short by Php12.2 billion, and is anticipating even bigger spending and bigger debt in 2020.

Our future is being mortgaged. It doesn’t help to cure apprehensions when government says that the debt is manageable. Government has to end its anti-people neoliberal economic policies, and only then shall we be well. #

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

Explore beauty and heritage in the Philippines, Vietnam and Thailand while staying at home

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Virtual packages give would-be tourists a taste of better times ahead.

By Mong Palatino

Movement restrictions in place across the world as a result of the COVID-19 have canceled travel plans and left entire industries devoted to tourism in tatters.

In Southeast Asia, where tourism plays an important role in generating jobs and revenues, the pandemic has already weakened the economies of many countries. Tourism numbers are minuscule at a time when they should be booming.

The Philippines’ Department of Tourism reported that foreign arrivals went down by over 54 percent to 1.32 million from January to April this year. The tourism sector accounted for 12.7 percent of the country’s gross domestic product in 2018.

According to the General Statistics Office, Vietnam welcomed 3.7 million international tourists from January to March, which was 18.1 percent lower compared to the same period in 2019.

Thai authorities said that from January to March, foreign tourist arrivals decreased by 38 percent to 6.69 million. Spending by foreign tourists accounted for 11 percent of the country’s gross domestic product in 2019.

In response, governments in these countries have established virtual tours for those who want to explore famous travel locations in Southeast Asia without leaving their homes, and to encourage tourists to visit these places in the future.

Below are some of the free online travel packages on offer.

Philippines

The Intramuros Administration (IA), a Philippine government agency, has partnered with Google Arts and Culture to create a platform that allows users to virtually visit the ‘walled city’ of Intramuros in Manila.

Intramuros was the site of the old capital during Spain’s 300-year rule over the Philippines. Visitors can explore famous landmarks like Fort Santiago and Plaza Roma.

The website also showcases the IA’s art collection. The online exhibit ‘Christ in Filipino Consciousness’ features religious images of Child Jesus that reflect how Christianity was deployed to colonize the Philippines.

Meanwhile, the Department of Tourism is also offering virtual backgrounds featuring famous tourism destinations in the Philippines which users can display in video conferences.

Screenshot of the Ha Long Bay 360 degree tour. Source: Website of ‘Stay at Home with Vietnam’

The Vietnam Tourism Advisory Board and the Vietnam National Administration of Tourism have launched the ‘Stay at Home with Vietnam’ kit that allows visitors to explore the country from a distance.

The website offers 360-degree tours of its eight UNESCO World Heritage sites which include Halong Bay and the Phong Nha caves.

Visitors can also download homemade recipes of popular Vietnamese dishes such as banh mi sandwich and bun cha (rice noodle served with grilled pork meatballs).

Several short videos feature local citizens providing tips and unique perspectives on some Vietnamese destinations.

A coloring-in pamphlet that features Vietnamese icons is available for download.

Lastly, visitors can download photos of famous tourism sites that can be used as virtual background during video calls.

Thailand

Thailand has recently eased lockdown restrictions but it will take some time before international tourists are welcomed back again.

The Tourism Authority of Thailand (TAT) tried to sustain interest through its #BooknowTravelsoon campaign and Amazing Thainess social media promotion.

It has launched 3D virtual tours for 13 attractions in nine provinces.

One of the virtual museums offering a glimpse of the country’s riches is the Arts of the Kingdom Museum, which features art collections created by the craftspeople of the Queen Sirikit Institute.

Jewels of the collection uploaded on social media include the ‘Model of the Mongkol Suban Royal Barge’ and ‘Egg-shaped Urn with Khankorbua Print Golden top etched’

The model of the royal barge, including the hull and the keel, are made of gilded silver. The bow is made of carved gold and colour enamel in the shape of a Garuda clutching a Naga in each claw.

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Kodao publishes Global Voices articles as part of the content-sharing agreement.

These officials flouted lockdown rules in Myanmar, Malaysia, and the Philippines

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Arrest a community volunteer, then throw yourself a party

By Mong Palatino/Global Voices

Lockdown restrictions were enforced by many countries across the world to contain the spread of COVID-19, and Southeast Asia has hosted some of the harshest.

Most quarantine protocols require residents to stay at home, while mass gatherings are typically prohibited.

In Malaysia and the Philippines a particularly strict enforcement of these measures saw thousands of arrests and heavy penalties for violations from March onwards.

But a number of government officials were caught violating the very quarantine protocols they were supposed to oversee.

Global Voices looked into some of these cases, and their outcomes, which highlight how rules apply to ordinary citizens more than to powerful politicians.

We also considered a case in Myanmar that showed how religious discrimination can have a bearing on the application of the law.

Malaysia: ‘Disparity in sentencing’

Malaysia has arrested almost 30,000 people for violating its Movement Control Order (MCO). Harsh implementation was cited by authorities as necessary to prevent a surge in COVID-19 cases.

But the public noticed that several politicians flouted the guidelines. The Centre For Independent Journalism compiled documented many of these instances. In one case, Deputy Health Minister Noor Azmi Ghazali posted a now-deleted Facebook photograph of him and another elected representative sharing a meal with about 30 students. Deputy Rural Development Minister Datuk Abdul Rahman Mohamad meanwhile enjoyed an impromptu birthday party. Datuk Abdul Rahman Mohamad claimed that the party was a surprise sprung on him by friends and said he was unable to send them away for reasons of courtesy.

In many cases politicians and their families who got charged for failing to practice social distancing measures were slapped with light fines. Ordinary citizens, in contrast got maximum penalty fines and even jail time.

This prompted the Malaysian Bar to issue a statement about the ‘disparity in sentencing’:

The Malaysian Bar is disturbed by accounts of excessive sentences and cases of disparity in sentencing between ordinary people and those with influence, in relation to persons who have violated the MCO.

We acknowledge that the range of sentences handed down may well be within the ambit of the law, but the power of the Court to hand down sentences must be exercised judiciously in order to avoid any travesty of justice.

Philippines: ‘Mañanita’, not a birthday party’

The Philippines is cited by the U.N. Human Rights Office as another country that relied on a “highly militarized response” to deal with the pandemic. More than 120,000 people have been arrested for curfew and quarantine transgressions. Checkpoint security measures have led to numerous human rights violations.

But the government’s credibility in enforcing the Enhanced Community Quarantine (ECQ) guidelines suffered a tremendous blow after it was reported that Major General Debold Sinas, the director of the National Capital Region Police Office, benefited from a birthday bash organized by subordinates.

Sinas insisted that there was no birthday party but only a ‘Mañanita’ — a police tradition that features an early morning serenade for the chief. But the public backlash forced him to issue an apology.

Critics pointed out that Sinas and his team have enthusiastically arrested activists and community workers organizing relief activities during the lockdown. They blasted the general for holding festivities at a time when millions have lost jobs and income due to anti-pandemic measures.

Sinas was later charged for violating ECQ rules but has so far managed to retain his position. His case is still pending in the court.

A retired military officer, Ramon Farolan, advised Sinas to step down:

Your apology would take on greater meaning if you step down from your position. Accept that you made a poor judgment call, showing insensitivity to the plight of our less fortunate. Don’t wait for higher authorities to decide your case.

Myanmar: Religious event or pagoda renovation?

In Myanmar, Yangon Chief Minister Phyo Min Thein and Naing Ngan Lin, chairman of the COVID-19 Control and Emergency Response Committee, are both accused of breaking the law by attending a Botataung Pagoda festival while the country is observing a ban on religious gatherings.

Photos uploaded on the chief minister’s Facebook page showed dozens of individuals congregating at a riverside site to observe a Buddhist rite.

Social media reactions focused on the clear breach of government guidelines, which include a prohibition on gatherings of four or more people.

Phyo Min Thein denied that the activity was a ceremony, insisting instead that it was a pagoda renovation and that the other people in the photographs were mere onlookers.

Many commented that while the government has been consistent in jailing Muslims and Christians for holding religious activities during lockdown restrictions, it has been less decisive in probing activities connected to Buddhism — the country’s most widely observed religion.

Kyaw Phyo Tha, news editor of the English edition of The Irrawaddy, criticized the chief minister’s actions:

Whatever the case, the chief minister’s actions were unacceptable. They have put the Union government in an awkward position, as its orders have been undermined by a senior official. Due to U Phyo Min Thein’s shortsightedness, Myanmar will have to pay the price internationally by being accused of religious discrimination.

Phyo Min Thein may yet pay for his lockdown scandal — a growing number of Yangon regional legislators are seeking to file an impeachment case against him for breaking the rules. #

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

Defiance greets passage of Duterte’s Anti-Terror Bill

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Progressive groups, activists, and human rights advocates held an indignation rally at the University of the Philippines and House of Representatives last Wednesday, June 4, as the Philippine Congress passed President Rodrigo Duterte-certified anti-terrorism bill.

After the government imposed a lockdown over much of the country, the protesters defiantly held one of the first rallies to denounce the bill they fear would violate the people’s civil and political rights instead of going after real terrorists.

Among the provisions of the proposed law the protesters oppose is the allowance of warrantless arrests, extended imprisonment without charges and a vague definition of terrorism that may lead to arrests of government critics. (Video by Jek Alcaraz, Sanafe Marcelo, & Joseph Cuevas/Kodao, Music by Levy Abad)

KODAO ASKS: Kung walang mass testing, mapipigilan kaya ang COVID-19 sa Pilipinas?

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Sa mahigit dalawang buwan na pagpapatupad ng lockdown sa buong bansa dahil sa Covid 19, wala pa ring malawakang testing upang malaman talaga kung gaano kalala ang paglawak ng sakit sa mamamayan. Maraming grupo ang nanawagan na ipatupad ang mass testing na anila’y siyang tunay lulutas sa nasabing pandemya.

Sa kabilang banda, mabibigyang-solusyon ba ang pandemya na ito kung walang mass testing? (Bidyo ni Joseph Cuevas Background Music: Bumper Tag by John Deley)

Financial strength, development weakness

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By Sonny Africa

The Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF), presided by Pres. Rodrigo Duterte, addressed the country on Tuesday. Finance Secretary Carlos Dominguez III was a moment of lucidity especially compared to his principal’s rambling incoherence. Unfortunately, being lucid doesn’t necessarily mean being correct.

Resilient and the best?

Sec. Dominguez opened by rejoicing about the Philippines being ranked number six out of 66 countries in the world for “economic resiliency” and supposedly “the best in Southeast Asia for financial strength”. The compulsion to welcome any sort of accolade is understandable especially coming from The Economist, a well-regarded business newspaper. We’re so starved of good news that ranking highly on any international scale – like in boxing or beauty pageants – always gives an endorphin rush.

But then again, it’s probably useful to be a little more circumspect about the metrics used to say that the country is supposedly doing well. The four measures of ‘financial strength’ in the magazine’s report are of course fine as they are and include the most important usual measures of financial strength – public debt, foreign debt, cost of borrowing, and foreign exchange reserves. Hence Sec. Dominguez’s elation over our so-called financial strength and the country’s credit ratings.

But we should presumably see things from a real development perspective and beyond the shallow endorphin rush. In which case, the main problem is the confusion between means and ends. This is actually a recurring problem with our neoliberal economic managers in particular, and free market-biased economists, policy folks, and business minds in general.

The four metrics and credit ratings aren’t valuable in themselves but for how useful they are for the presumably real development ends of policymaking – enough jobs and livelihoods so that there are no poor Filipinos, and an equitable, stable, self-reliant and sustainable economy. It’s always been odd that whenever policymakers see a conflict between financial strength and social development, the latter always loses.

Which is also to highlight that while those measures are of course better favorable than unfavorable, supposedly favorable performance can actually be undesirable depending on the price paid to get them.

Financially strong for whom?

So, some thoughts on Sec. Dominguez’s self-congratulatory echoing of an assessment that the Philippines “continues to enjoy the confidence of the international community” – meaning all the foreign creditors and investors whose main interest in the country is that we keep borrowing and stay profitable for them, to put it bluntly.

First, “financial strength” is a misnomer if this is in any way taken to refer to the level of development of the Philippine economy or even of the government. The only underlying so-called strength these metrics refer to is the country’s perceived ability to pay its foreign debt obligations. There’s no direct correlation between such so-called financial strength and a country’s level of development – a quick scan of the ranking with countries like Botswana, the Philippines, Nigeria, Indonesia and India ranking high should make that easily clear.

Finance secretaries, central bankers, and other economic managers around the world are regularly feted as the World’s Best this or that by global finance magazines and organizations. Their countries, economies and governments correspondingly benefit from the halo effect and are projected as developing – even if, as is often the case, they’re not.

Second, it matters how “good performance” along these indicators was achieved. Put another way, what may be good for financial strength may be bad for development. As is often the case.

For instance, the Philippines has had comfortable foreign exchange reserves since the 1990s mainly because of remittances from the unprecedented export of cheap labor and overseas Filipino workers. We’re so used to it, but it’s worth keeping in mind that this enormous reliance on overseas work is at huge social costs for families and exposes the inability of the domestic economy to create enough jobs for its population. It also actually distorts the economy with a huge imbalance between domestic production and incomes and final household demand. Mammoth overseas remittances – not brilliant economic managers – are arguably the biggest factor in the country avoiding foreign debt payments crisis such as in the 1980s.

Public debt, including public foreign debt, has moderated and credit ratings also improved. However, this was done on the back of an increasingly regressive tax system that relies more and more on consumption taxes rather than on direct taxes. The regressive trajectory of the country’s tax system started in earnest with the introduction of value-added tax (VAT) in the 1980s then worsened with VAT expansion in the 2000s and 2010s, and with cuts in personal income, estate and donor taxes particularly through the regressive Tax Reform for Acceleration and Inclusion (TRAIN) reforms since 2018.

All this increases so-called financial strength by unduly burdening poor and low-income groups who make up the majority of the population, while making it easier for the narrow sliver of the richest in the country. Sec. Dominguez is unrepentant and noticeably still pushing for the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill which, among others, lowers corporate income taxes – most of all to gain further favor from the international community.

Lastly, what is prevented by insisting on these measures as if they were ends in themselves also matters. The onset of COVID-19 and the national and global measures to control the pandemic have a tremendous impact on the economy. The Philippines and the world are in recession, and some are saying that the world is in its worst economic crisis since the Great Depression almost a hundred years ago.

Our current pandemic panic will eventually settle in the coming months, but the economy will still be stumbling. Worse, poverty and unemployment will be soaring. In such circumstances, it doesn’t make sense to be so insistent on narrow indicators of so-called financial strength to the point that urgent development measures are prevented.

Today, it’s incredibly important to put more money in people’s pockets both to help them maintain their welfare as well as to boost effective demand. It’s also important to support rural producers and small enterprises to ensure that the goods and services needed are still available. It’s also important to rapidly expand the public health system to deal with the pandemic and to meet the country’s vast COVID-19 and non-COVID-19 health problems.

Attending to all this means the government having to spend more as well as building up its capacity to intervene. Giving unwarranted emphasis on measures of ‘financial strength’ unfortunately sets artificial limits to the government meeting its human rights obligations to intervene on a massive scale.

To force an analogy, it’s like being in the hinterlands of the Philippines with an emergency case in the back of the car and the nearest hospital hours away. In this kind of situation, you don’t obsess about fuel-efficient driving or not red-lining the tachometer or limiting the car’s mileage – you step on the gas. Glorifying ‘financial strength’ is stepping on the brakes. #

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

The fate of BBB in the time of COVID-19

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by Jose Lorenzo Lim

The COVID-19 lockdown and further containment measures are drastically slowing down economic activity in the Philippines and elsewhere. The government sees the Build, Build, Build (BBB) program as jumpstarting the Philippine economy in the time of the pandemic. But with its current neoliberal framework, will BBB be enough?

Even before COVID-19, multilateral funding institutions like the World Bank and Asian Development Bank (ADB) have been pushing for an infrastructure offensive especially in developing countries. Moreover, as early as the late 1980s the World Bank proposed using the private sector to fund and undertake these projects in lieu of the Keynesian idea of giving the State a bigger role in the economy especially in terms of large public spending.

The Golden Age of Infrastructure

Infrastructure is a tool for reducing poverty and driving economic growth. But the current framework of infrastructure development in the Philippines and other developing countries is profit-driven and hence overly focused on economic infrastructure. Contrarily, development in so-called advanced and high-income countries such as the US, Singapore, South Korea, and Taiwan also included substantial public investment in social infrastructure such as education and health.

The Duterte government’s focus on a narrow set of economic infrastructure is aimed at attracting foreign capital. This is driven by the belief that having better infrastructure attracts more foreign investments, which enables countries to attain economic development. The World Bank claimed that, in Asia, around US$8.6 trillion worth of infrastructure investments are required in 2010-2020 to achieve economic development. It cited a huge infrastructure investment gap in Asia, Sub-Saharan Africa, and Latin America, which are mostly composed of developing countries.

One of the promises of the Duterte government is to usher in a “Golden Age of Infrastructure” through its grandiose BBB program. The project includes high-impact projects under the Department of Transportation (DOTr), Department of Public Works and Highways (DPWH), and the Bases Conversion and Development Authority (BCDA) to build more railways, urban mass transport, airports and seaports, more bridges and roads, and new and better cities.

In selecting the original 75 flagship projects, the government applied the following criteria, among others: 1) consistency with regional and national development plans; 2) implementability (i.e. must be accomplished within the Duterte administration); 3) high economic impact with 10% minimum social discount rate; and 4) “big-ticket” (above Php500 million or US$10 million).

Etienne Girardet@etiennegirardet/Unsplash

Issues, from 75 to 100

Despite the supposedly meticulous criteria for identifying the most important projects to undertake, many issues surround the infrastructure flagship projects (IFPs). Its neoliberal fixation with pleasing investors and big business puts to question whether or not it will benefit the people and lead to genuine development.

First, the identification of IFPs was problematic from the start. In November of 2019, the government announced that it revised the list of IFPs from 75 to 100. The National Economic and Development Authority (NEDA) Board chaired by the President approves each project before it is even considered as a flagship infrastructure project. However, the BCDA said that the Duterte administration put the wrong projects on the list. Moreover, some projects turned out to be unfeasible, which is strange because this was presumably a basic criterion for selecting the 75 flagship projects in the first place.

The Duterte administration had been boasting of the 75 IFPs since assuming office in June 2016. Former Budget and Management Secretary Benjamin Diokno was even optimistic that the Duterte administration would complete 74 of the 75 projects before its term ends in 2022. Now, the BCDA expects only 38 of the 100 IFPs to be completed by the time Duterte steps down.

The Metro Manila Bus Rapid Transit (BRT) Line 1 and Line 2 and Cebu BRT project, for example, were taken out of the 75 IFPs due to narrow roads and right-of-way issues. The DOTr even wrote a letter to the NEDA Investment Coordination Committee (ICC) to cancel the projects. Yet the projects were eventually re-included after a technical inspection by the World Bank and NEDA on Quezon Avenue (one of the main stations of Metro Manila BRT) and in Cebu.

The Metro Manila and Cebu BRT projects are targeted to be funded by France and the World Bank, but they have faced problems with financing. It also did not augur well that Pres. Duterte suspended all talks on loans and grants from the 18 countries that supported a United Nations Human Rights Council (UNHRC) resolution to probe his controversial drug war, which included France. Ultimately, the fate of the Metro Manila BRT is in limbo since it is no longer among the 100 IFPs. The Cebu BRT meanwhile is still included and is targeted for completion by 2021.

Second, the priorities of the infrastructure projects are questionable. The majority of the projects are for transport when the country badly needs social infrastructure. For instance, there is a need especially for more hospitals and health facilities as bared by the country’s glaring incapacity in the face of the COVID-19 pandemic. The country also badly needs infrastructure for agriculture production, and to support local industries.

The 100 IFPs are now composed of projects for transport and mobility (73), water resources (10), urban development (9), information and communication technology or ICT (6), and power and energy (2). The overwhelming majority are for transport and mobility. In the absence of a basic strategy for developing agriculture and domestic industry, these will mainly end up supporting the overly import-oriented and export-oriented enterprises constituting our economic backwardness.

Third, BBB will be hugely funded by loans from other countries and financial institutions and will further bloat Philippine debt. The 100 IFPs are worth around Php4.3 trillion and official development assistance (ODA) is the biggest funding source of projects. There will be Php2.4 trillion funded with ODA, followed by Php1.2 trillion through public-private-partnership (PPP) funding, and Php172 billion funded solely from the General Appropriations Act (GAA).

Leading the ODA funders is Japan with a total of around Php1.3 trillion, China with Php700 billion, and ADB with Php273 billion. Data from NEDA as of June 2019 show that the Philippines has US$8.1 billion worth of ODA loans from Japan, US$2.8 billion from ADB, and US$273 million from China.

Fourth, contrary to the goal of infrastructure pushing development, most of the 100 IFPs are still centered in Luzon, where poverty incidence is relatively lower compared to other parts of the country.

Of 26 projects worth Php1.6 trillion in Luzon, the biggest concentration of 22 projects worth Php916.5 billion will be built in the National Capital Region. Meanwhile, there are 17 projects worth Php474.6 billion in Visayas, and 25 projects worth Php474.4 billion in Mindanao. Additionally, there are projects worth Php913.5 billion that will be implemented nationwide, the bulk of which is taken up by the New Manila International Airport located in Bulacan.

Fifth, vested interests appear to be benefiting from the BBB infrastructure offensive. Bong Go’s family has been accused of being the largest contractor in BBB projects. Go’s father, Desiderio Go, owns the Davao-based construction company CLTG builders. Through CLTG builders, the Go family secured 20 contracts in 2017 for road networks in Davao. These were worth around Php3 billion in solo projects and joint ventures. In 2018, CLTG Builders also bagged Php116 million worth of projects in Davao.

Aside from Go’s family, other businessmen may also be gaining from the BBB program. For instance, DPWH secretary Mark Villar’s father, Manuel Villar, through Prime Asset Ventures Inc. (PAVI) is eyeing two unsolicited proposals worth Php213.3 billion. These include the LRT 6 Cavite Line A project worth Php56.3 billion and the Cavite LRT Line 6c and Sucat Line 6b projects worth Php157 billion.

The COVID-19 pandemic does call for a “new normal”. This should include a change in the way the government spurs economic growth where the current infrastructure push is becoming irrelevant.

Fons Heijnsbroek@fonsheijnsbroek51/Unsplash

Jumpstarting the economy

The BBB program is seen by the government as essential in jumpstarting the economy. While economic managers have already insisted that they will hardly touch funding for infrastructure projects to augment the budget for COVID-19 response, they took a step back and realigned some of the infrastructure budget.

The DOTr in April realigned funding for infrastructure projects worth Php16.9 billion that is from 35 projects. The MRT-3 rehabilitation and the PNR Clark Phase 1 are some of the projects that had their budget realigned for the government’s COVID-19 response, which are transportation related.

Data from NEDA show that there are 34 projects from the 100 IFPs that are already being implemented. Of the 34 projects, 26 are transport and mobility related, 2 are ICT projects, 3 are urban development, and 3 are water resources.

Meanwhile, there are 43 pending projects in the 100 IFPs to be implemented within 6-8 months. Majority is still composed of transport and mobility projects with over 30 projects, 4 water resource projects, 4 ICT projects, and 5 urban development and redevelopment projects.

These roads and airports under the 100 IFPs would have been useful to aid economic activity in the long run, particularly tourism and trade. But will these be useful in the “new normal”? For instance, the Department of Tourism has already acknowledged that the number of foreign visitors will drastically fall until at least next year. The United Nations World Tourism Organization estimates that foreign travel will fall by 20-30% and tourism receipts by one-third in 2020. Meaning, the tourism industry in the time of COVID-19 is practically suspended indefinitely.

The 2020 Budget of Expenditures and Sources of Financing shows that the government has allotted Php989.2 billion for infrastructure outlays. Of this, the highest share or Php349.9 billion is allotted for road networks. Government should review the budget for road network projects which could be additionally used for the country’s COVID-19 response. Another source could be the outlay for airport systems worth Php2.4 billion.

The composition of BBB projects being mostly road networks and airports is attributed to its business and trade inclined framework. Basically, the aim of the government’s infrastructure program is to push for high-impact projects to stimulate the economy and arrest its further slowdown and possible decline. But while the Philippines does need these types of infrastructure, the factor of the COVID-19 pandemic highlights a long-overdue change in this framework.

Josue Isai Ramos Figueroa@jramos10/Unsplash

The future of infrastructure

Looking at IBON’s economic blueprint dubbed People Economics, developing the countryside, building Filipino industries and protecting the environment could be used as the new framework for the government’s infrastructure development.

One way to reframe the government’s infrastructure program in the time of COVID-19 is to focus on social infrastructure such as government hospitals and health centers in the provinces, sanitation facilities on barangay level, and housing projects for the poor. This should be coupled with a plan for countryside development and building rural and national industries. This puts substance in a ‘Balik-Probinsya’ program if it genuinely aims inclusive development.

With a plan of building Filipino industries and making them competitive, the Philippines won’t have to be dependent on importing a wide range of commodities. The countryside could also benefit from a much-needed infrastructure push with irrigation, post-harvest facilities, farm-to-market roads, and ICT projects such as marketing, prices and production support. This does not end with a basic social services and infrastructure push but ensuring that people have decent jobs and living wages to support domestic consumption and demand. Decongesting Metro Manila then won’t be a problem.

The Philippines has to improve the current state of infrastructure especially in the context of COVID-19: one that supports a strong public health system and the stable production of the nation’s needs in order to withstand and battle a pandemic. The problem with the BBB program is how this massive infrastructure program is not only disconnected from correcting but even reinforces the fundamental problem. BBB ignores the need for reliable, strong and public-controlled social services and public utilities infrastructure, for agricultural development and national industrialization, and healthy environment.

What infrastructure to build should figure in a larger strategic plan that supports sustainable consumption and production and social well-being. The current infrastructure framework needs to be transformed. #

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The author 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.

Before Covid-19, Philippine Jails Already a Death Trap

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Human rights advocates believe that numbers will still increase and the full force of Covid-19 is yet to be felt. They also call for transparency in releasing death and infection rates to help craft policies and mitigate the spread of false information.

BY AIE BALAGTAS SEE/Philippine Center for Investigative Journalism

AN AVERAGE of 50 to 60 prisoners have died in the New Bilibid Prison (NBP) every month for the past six months but only one death in April has been attributed to Covid-19.

For the Bureau of Corrections (Bucor) the death toll in February, March, and April was still within the range of monthly deaths in the last quarter of 2019 to early 2020. The pandemic has ravaged the country since March, with local transmission of the coronavirus taking place as early as February. Humanitarian groups have since warned of its catastrophic effect on the country’s prison system.

“It still falls under our average death rate for the past six months,” Bucor spokesperson Gabriel Chaclag said in a phone interview.

The high death rate, Chaclag said, was proportional to Bilibid’s huge population, currently at 28,000. The population could create from 11 to 14 barangays. Chaclag claimed that if they have lower population, then they will have fewer deaths.  

Bilibid is one of Bucor’s seven facilities for convicts. It had recorded one to three deaths daily from October 2019 to April 2020, noted Chaclag. Most came from the maximum-security compound, which was designed for 6,000 but currently holds 19,000 men. Chaclag said that the cause of these deaths varied, citing illnesses such as cancer and heart failure as major ones. 

“Loneliness, nightmares, and accidents” were also seen as reasons for these deaths according to Chaclag.

Prisoners in extremely congested jail facilities live in deplorable conditions, lacking proper health care, hygiene, and nutrition. Human rights advocates have called for the early release of elderly and sickly detainees. They have also pushed for making available information on death and infection rates.

With Covid-19 breaching Bilibid walls, the deaths are sowing panic and paranoia among disgruntled detainees who, according to an insider, fear that the virus has already exploded within prison compounds.

The lone Covid-related death from NBP was reported on April 23. There have been no confirmed Covid-19 cases in Bilibid since, but at least 44 inmates have been in quarantine, Chaclag confirmed. Four of them were tested for the virus, with results yet to be released.

Health undersecretary Maria Rosario Vergeire, in a phone interview, said that only one NBP inmate had tested positive for coronavirus as of May 4.

A prison insider said bodies were piling up in NBP’s old isolation ward called Dorm 1D. In late April, at least “20 bodies emitting foul odor” were stacked there. On May 1, the insider added, three men died after the NBP hospital ran out of oxygen.

“The inmates plan to hold a noise barrage but Bucor guards threatened to shoot them,” the insider said. 

Chaclag denied this, saying those “who have agenda” should stop weaving stories that sow paranoia, which could lead to a riot in NBP. Bodies were not piling up, he said. There were days when the funeral parlor could not retrieve them because the cause of death was unknown. “We had to wait for the crematorium personnel to pick them up,” he explained.

Guidelines issued by the Health department stated that deaths with unknown causes shall be treated as Covid cases and the corpse cremated within 12 hours.

Six to five NBP inmates who died in their dormitories were cremated last month. This is not a known practice in NBP. Bodies without cause of death were usually autopsied and kept by funeral parlors until someone claimed them.  

Chaclag said that unclaimed bodies in the past were either buried in the NBP cemetery or were taken advantage of by funeral parlors who sold them to operators of “sakla,” a form of illegal gambling carried out during wakes to help families raise funds for burial expenses. In the case of unclaimed inmates, the earnings simply went to the pockets of the syndicates.

Old conditions and new virus, a lethal mix

Inmate deaths is a decades-old problem at the New Bilibid Prison. The global pandemic merely reopened the old Pandora’s box. 

The national penitentiary was already in the spotlight last year because of the alarming number of deaths there. Henry Fabro, the Bilibid hospital chief, said one prisoner there dies each day.

Humanitarian groups have long blamed overpopulation, poor hygiene, lack of proper food, and limited access to health care for the lamentable condition. The calls to depopulate jails have only grown louder with the coronavirus now part of the equation.

Rights advocates have called for the release of vulnerable inmates, saying infections in detention areas might risk jail staff and visitors, and can potentially lead to the reinfection of the general public. 

One of these advocates, Raymund Narag, an associate professor at Southern Illinois University and expert in Philippine jails, told PCIJ that there should be transparency in dealing with these problems.

“It is their moral and legal obligation to be transparent. It is the only way to mitigate the spread of false information. It is also helpful in crafting policies if information are timely and accurately provided,” Narag said.

Death and infection rates in detention facilities have always been difficult to obtain. Like Narag, Human Rights Watch has called for transparency after learning that one detainee dies every week in Quezon City Jail since the coronavirus hit the facility last March.

Paul Borlongan, chief doctor of the Bureau of Jail Management and Penology (BJMP), which supervises city jails, also claims that BJMP’s death statistics is still “acceptable.”

In recent years, from 300 to 800 detainees have died in BJMP annually. “So far, I can say that our death statistics is still acceptable,” Borlongan said, adding that, “we expect 20 to 40 per week and sometimes 60 to 80 per month.”

Clash of statistics

Transparency is not the only problem. A clash of statistics among government agencies, and between the local and national governments, is adding to the confusion. 

According to Usec. Vergeire, there were 249 Covid-positive inmates in jails and prisons as of May 3. Of these, 187 were in Cebu City Jail, 49 in the Correctional Institute for Women in Mandaluyong, 12 in Quezon City Jail, and one in Bilibid. 

The facilities that appear to be the hardest hit are the most congested. Cebu City Jail is overpopulated by 1,000 percent and has the highest number of inmates at 6,237. Quezon City Jail is the third most crowded with 3,821 inmates as of March 2020.

As far as BJMP is concerned, only nine inmates — not 12 — from Quezon City Jail are considered Covid-positive patients. Borlongan surmised that the three other inmates in DOH’s list were those whose deaths were considered “possible Covid” cases because they had flu-like symptoms or pulmonary problems.

As of April 27, BJMP has recorded a total of 195 inmates and 34 jail staff who tested positive for Covid-19. Five jail personnel had recovered while none of the inmates have yet to be cleared of the illness. BJMP also documented cases in Mandaue City Jail, Marikina City Jail, Pasay City Jail, and Mandaluyong City Jail. These jails are not in the DOH list.

The City Reformatory Center in Zamboanga City was also reported to have Covid-positive cases. BJMP’s Borlongan said he has not received the official report about these cases.

Infections were also reported in the Cebu Provincial Jail, which is managed by the local government.

A Bucor official, who requested anonymity, also complained of slow and unreliable test results from the Health department. “We have to repeat the test each time they release results to us. It’s a waste of resources. Once, our staff tested positive but when the Philippine Red Cross rechecked it, the results were negative.”

The World Health Organization, International Committee of the Red Cross, and the Health department are working alongside Bucor and BJMP in setting up quarantine facilities for infected detainees. 

DOH Undersecretary Vergeire said they also plan to “conduct targeted testing, provide treatment and management of cases, and ensure that infection control measures are in place to prevent the spread of Covid-19 in penal and correctional facilities.”

Prisoner release and other urgent calls

From March 17 to April 29, almost 10,000 inmates have been released as bid to curb the spread of coronavirus in jails. The Supreme Court has also allowed the release of pre-trial detainees in jail for crimes punishable with six-month incarceration and below. A reduction of bail has been recommended for non-convicts facing charges punishable with jail time of six months to 20 years.

Petitions seeking temporary freedom for the sick and elderly are still pending approval.

Last March, Interior secretary Eduardo Año rejected calls to release vulnerable inmates, saying jails were the “safest” place for them. The growing number of Covid-19 cases now appear to disprove this claim.

“If many people — prisoners, guards, their families, the people i[n] neighborhoods around jails— die because of Covid-19, the massacre is squarely the responsibility of government,” Human rights advocate and Ateneo de Manila University professor Antonio La Viña said.

Narag and La Viña believe the numbers will still increase and the full force of Covid-19 is yet to be felt. “I believe that there will be multiple bombs that will explode. Many PDLs [persons deprived of liberty] had been dying from many jails… only that it is not reported as such. But once the news report will catch up, I will not be shocked,” Narag said.

Warnings about the coronavirus being a bomb that could explode in jails and prisons were made in early March. These fell on deaf ears until infections began to manifest, with  jails and prisons fast becoming the next epicenters of the virus. “Our prisons will be ground zero unless we decongest now,” said La Viña.

Narag and La Viña are urging the government to take swift actions, stressing that the disease’s spread is a public issue and not only the problem of the corrections and prison system. “We are already faced by a problem that can kill us all,” Narag said.

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.

Photograph by Kimberly dela Cruz— PCIJ, May 2020

PH economy was already slowing – COVID-19 just made it worse

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by IBON Media & Communications

The Philippine economy was already weak coming into the COVID-19 crisis, research group IBON said. Growth will remain slow if the government does not acknowledge pre-existing weaknesses that the pandemic merely intensified.

The group said that recognizing the problem is the first step to the bold measures needed for long-term growth and development.

The Philippine Statistics Authority (PSA) reported -0.2% growth in gross domestic product (GDP) in the first quarter of 2020, marking a significant drop from the 5.7% growth in the same period last year.

The National Economics and Development Authority (NEDA) attributed this to the Taal volcano eruption in January, decrease in trade and tourism due to COVID-19 in February, and the eventual lockdown in March.

IBON said however that the economy was already slowing for three consecutive years and headed for its fourth such year even before COVID-19 came into the picture.

Official figures show annual GDP growth falling from 7.1% in 2016 to 6.9% in 2017, 6.3% in 2018 and 6.0% in 2019.

Year-on-year first quarter growth also reflects this trend, falling from 6.9% in the first quarter of 2016 to 6.4% in 2017.

This slightly increased to 6.5% in 2018 but fell to 5.7% in 2019. In 2020, first quarter growth dove to -0.2%, which is the first GDP contraction since the fourth quarter of 1998 (-3.4%).

Important accustomed drivers of growth were falling even before the eruption of Taal Volcano in January and the COVID-19 crisis since February and especially since the lockdown starting mid-March.

Growth in overseas remittances slowed from 5.3% in 2017 to 3.9% in 2019, and foreign investment flows from US$10.3 billion to US$7.6 billion over the same period.

The manufacturing sector slowed from 8% in 2017 to 3.2% in 2019, and agriculture from 4.2% to 1.2% over the same time.

Tourism had also been lackluster, said the group. Growth in gross value added of tourism industries remained virtually stagnant from 10.1% from in 2016 to 10.3% in 2017 and 10.6% in 2018.

In terms of expenditure, gross capital formation considerably slowed from 10.9% growth in 2017 to 2.5% in 2019 and exports from 17.4% to just 2.4 percent.

Household consumption spending remained steady at 6% in 2017 and 5.9% in 2019.

Hence, overall economic growth has just been artificially driven by government consumption spending, which increased from 6.5% in 2017 to 9.6% in 2019 and by public infrastructure projects rather than an underlying dynamism from vibrant domestic agriculture and industry.

These basic economic weaknesses result in record joblessness and the proliferation of informal and irregular work.

Correcting the official methodology which underreports joblessness, IBON estimated that the number of unemployed reached a record 4.7 million in 2019.

The group also estimated that 27.2 million or 64% of employment in the same year was really poor quality work comprised of non-regular and agency-hired, government contractuals, and informal earners.

Widespread poverty is another indicator of a sluggish economy, said the group.

According to PSA data, some 12.4 million or over half of 22 million families nationwide were trying to survive on less than P132 per person per day.

IBON pointed out that the last three years of slowing growth has been despite the Duterte administration’s expanding Build, Build, Build infrastructure program.

Despite annual appropriations for infrastructure increasing to 4.7% of GDP in 2019, economic growth still fell for a third consecutive year.

The group explained that infrastructure spending is a short-term stimulus at best and that domestic agriculture and Filipino industry have to be strengthened for growth to be higher and more sustained.

The agriculture sector has been weakening due to long-time government neglect. It grew from -0.1% in 2016 to 4.2% in 2017, but steadily declined thereafter to 1.1% in 2018 and 1.2% in 2019.

First quarter growth in agriculture slid to -0.4% in 2020 from 0.5% the previous year. Continued agricultural liberalization, such as of the rice subsector, will only weaken agriculture further.

Growth in manufacturing, which has long been foreign-dominated and export-oriented, has also been dwindling. The sector registered 6.8% growth in 2016, which increased to 8.0% in 2017. But this dropped to 5.1% in 2018 and 3.2% in 2019. First quarter growth in manufacturing went down to -3.6% in 2020 from 5.2% in 2019.

IBON said that the government will be making this same mistake in overly relying on infrastructure spending as its response to the unprecedented COVID-19 crisis.

The group stressed that the government needs to implement bolder measures that prioritize the needs of Filipinos, especially the most vulnerable, and that genuinely develop the national economy.

These include: immediate emergency relief, and especially with unemployment soaring, extended income support to poorest households; expanding the public health system and providing universal social protection; and repurposing the economy for domestic demand-driven employment and growth by strengthening agriculture and building Filipino industry.

The resources needed for these can be raised by imposing a wealth tax, higher personal income taxes for the richest families, and higher corporate income tax for the largest corporations.

IBON said that if the government insists on its old neoliberal policies and does not change course, the economy will be even weaker after the COVID-19 crisis. #

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