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 99,523 to
130,677 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 22% unemployment in April 2020, by IBON’s
reckoning. The combined 20.4 million
unemployed and underemployed were 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, this will 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
this 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 this.
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 suffered, indeed 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 in 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 released in May. This seemed
more detailed, comprehensive and forward-looking. There were some relevant
health and education measures.
But
some very important measures were 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 seemed oblivious
to unsound fundamentals, the global crisis, and accelerating protectionism. On
the other hand, unfounded feel-good platitudes were 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 not spending on what would have the greatest development impact.
A
Philippine Economic Recovery Plan was supposed to be presented 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. ###
