Part two
5. Poverty shall continue to swell and hunger shall affect the millionswho cannot find jobs or well-paying jobs or receive incomes/assistance sufficient to support their families. Already, there are reports of “harvest snatching” even in the rice areas. Those in dire situation happen to be living in congested communities that are most vulnerable to the Covid spread and have very limited access to basic services. The country’s experience in 2020 shows that many living in urban, peri-urban, coastal, rural and upland communities are unable to avail themselves of any government assistance, partly because they are not officially registered as residents. These include the ambulant vendors, migrant construction workers, street dwellers, informal settlers and low-income lodgers such as the “endos.”
6. The government spending on the people’s survival shall remain niggardly. Under the Bayanihan 1 and 2 laws, passed in 2020, around 18 million families were supposed to be given social assistance. Studies show that less than 14 million got assistance and the amount involved is niggardly and given only once (at the most twice). There is a provision for wage subsidy for companies in distress, and yet, reports by the Department of Labor and Employment (DOLE) indicate that only a few companies had taken advantage of the assistance. With falling government revenues due to an eroded tax base and with the government commitment to keep paying the debt service despite the crisis (over a trillion pesos a year), government budgeting for the poor can only reach a paltry amount.
7. The government shall try to rev up the economy through limited stimulus spending. Such spending did not make any major dent on the market, or create substantial positive impact on businesses and jobs in 2020. This is so because the amount involved is not much and the focus is narrow: on big-ticket infrastructure projects enjoying official development assistance and loans from China and other investors. In the meantime, the government has been cancelling the gains from the limited stimulus spending by pursuing an all-out trade liberalization program, which penalizes domestic farmers and domestic industrial producers.
8. A full-blown human capital crisis is happening. The government pushed hard for the continuation of schooling at all levels in 2020 and in 2021. The problem is that the Department of Education and the teachers and parents are not prepared for the online and even blended system of teaching and learning. The children of the elite and those enrolled in elite schools are somehow doing well. But the millions of poor children, with no laptops and Internet connections are not getting the right education. Eventually, this will affect the country’s productivity in the coming years. This will also deepen further social and economic inequality in the country.
9. The global economic environment has serious downsides for the Philippines. It is a VUCA world—volatile, uncertain, complex and ambiguous. If there is social distancing at home, there is global distancing among countries due not only to fears of virus spread but also of the rise of economic protectionism among big countries, hence, the continuing US-China trade war. Yes, the Philippines can import with ease, but can it export with extra vigor in return? Meantime, regions hosting overseas Filipino workers en masse have become extremely volatile. In particular, the Middle East, which has millions of OFWs, can be a major Israel-Arab battleground
10. Overall, the country is facing several pandemics—Covid pandemic, debt pandemic, inequality pandemic and climate pandemic. All these pandemics are intertwining, as articulated by UN General Secretary António Guterres. They need to be addressed in a holistic and coherent manner because they tend to reinforce one another in a vicious circle. For example, the spread of Covid is fanned by poverty obtaining in poor communities, which, in turn is due to the social and economic inequalities obtaining in the country, aggravated furtherby bad debt and fiscal management. What is likely to happen? Like in 2020, the climate and inequality issues shall be at the bottom of government priorities, while the Covid and debt issues shall be handled in a haphazard manner.
Conclusion: A People’s Stimulus versus Trickle-Down Economics
IN sum, 2021 is likely to be another annus horribilis for the people, especially the ordinary working people and their families.
As it is, many poor people have been surviving with extreme difficulty because the government’s capacity to help is extremely limited.The displaced, the elderly and other vulnerables have to fend for themselves, scrounge for whatever assistance they can, as what happened in 2020.
To be continued tomorrow
Dr. Rene E. Ofreneo is a Professor Emeritus of University of the Philippines.
For comments, please write to reneofreneo@gmail.com.