The Ibon Foundation is urging the government to consider a shift in its assistance programs amid the Covid-19 pandemic by implementing a direct cash-transfer program to poor households.
In the online Midyear 2020 BirdTalk, Ibon Foundation Executive Director Sonny Africa said the government should spend P297 billion a month for cash transfers to boost aggregate demand and revive the economy.
Africa said the amount covers cash transfers, wage subsidies, and assistance to farmers and fisherfolk. This amount will allow them to spend and boost the economy.
“This is not the time to be stingy,” Africa said. “More priority must be given to workers and place more money in their pockets.”
Africa said efforts should also be exerted to helping the 31 million Filipinos working in the informal sector, who were the most affected during the lockdowns.
Ibon Foundation Research Head Rosario Guzman said that while workers in the informal sector received subsidies during the lockdowns, the amount translates to less than P130 per day.
Africa added that the stimulus of P140 billion as well as the P667 billion CREATE bill and P233 billion Bangko Sentral ng Pilipinas (BSP) liquidity support, are all directed to help the 9 million formal sector workers, many of whom still have jobs.
He added that the CREATE bill would also only benefit large corporations. In order to help more micro, small and medium enterprises (MSMEs), the government should make credit more affordable and accessible for them.
Compared to the country’s peers in the Asean, Africa said the Philippines has the second lowest fiscal policy response to the crisis at only 4.6 percent of GDP. Malaysia had the smallest at 4.3 percent of GDP.
The countries with the highest were Singapore, Thailand, and Vietnam at 19.7 percent, 14.9 percent, and 13.3 percent of GDP, respectively.
Africa said these are the countries that are expected to recover faster than the Philippines in the crisis.
Last week, BusinessMirror reported that boosting the confidence of businesses and consumers in the economy is the only thing that can provide the much-needed relief for millions of Filipinos here and abroad who became jobless because of the pandemic, according to experts.
With as many as 7.3 million jobless Filipinos as of April 2020 and over 80,000 overseas Filipino workers (OFWs) repatriated due to job losses abroad, the government must think of more ways to boost the economy, they said.
Ateneo Center for Economic Research and Development Director Alvin P. Ang said reopening the economy and loan-financed social safety nets can help, but these will not be sustainable and the overall lack of confidence prevents millions of Filipinos from getting jobs.
Ang said the country cannot wait for a vaccine to be available in order to provide assistance or employment for the millions who have lost their jobs and those who may still lose it.
He said that recently, the government announced that it intends to improve testing, contact tracing and isolation efforts for those infected, which Ang described as a good first step.