How much poorer are Filipinos due to pandemic?

Published August 24, 2021, 6:00 AM

by Zoilo "Bingo" P. Dejaresco III

Many Filipinos are much poorer now than before the pandemic. Instead of progressing, many have slid back to the 2017 levels, representing a loss of four (4) years.

Philippine Statistics on Income Level of Filipinos show that Filipinos earning from P7,800 to P16,000 monthly comprise 7.1 million households, or about 35.5 million, and 4.2 million households, or 21 million, earn only less than P7,2000 monthly. Thus, some 56.5 million Filipino are considered in the lower and poor income levels. 

Meantime, World Bank data show the following Poverty Incidence Level in the country: (2017-23.1 percent), (2018-21.9 percent) and (2019-estimated 20.7 percent). Due to the pandemic and assorted types of lockdowns, the Philippine economy is said to have been brought back to 2017 poverty incidence levels (23.1 percent). Based on the latest PH population count of 109 million X (23.1 percent),  therefore, about 25.2 million Filipinos are now considered poor, or about a quarter of the population.

The target was for this poverty range to drop to16 percent at the end of the Duterte era in 2022.

What was also unexpected was the recent attack of the Delta Variant and another two weeks of resulting lockdown which will cost the economy close to P300 billion and rendered 167,000 folks in NCR jobless.

This could put in doubt some of the government projections for annual GDP growth rates for 2021. The “high” GDP growth rate of (2nd quarter 2021) of  11.8 percent has little meaning since our economy had sunk to a very low base, having performed the worst in the ASEAN for 2020. The loss in 2020 (2Q) was even bigger at (16.9 percent) than 11.8 percent.

Optimistic government figures forecast a 6-7 percent annual GDP growth rate for 2021. Statistically, the Philippines has, therefore, to grow by 8.0 percent in the second half of 2021 to achieve annual growth of 6.0 percent and 10.2 percent (second half)  to get an annual growth of 8.0 percent. It is an “iffy” situation. (The government recently revised GDP growth rate for 2021 to 4-5 percent per annum).

Last week’s Moody Analytics (per Bloomberg) downgraded the GDP forecast for  PH in 2021 to at 4.0 percent. Our ASEAN neighbors forecast theirs at: (Thailand at 2.2%), Malaysia  at 4.0 percent, Indonesia at 4.0 percent) and (Vietnam at 5.8 percent). Assuming Moody’s number of (4 percent) for PH, it is not such a big deal because we are starting from a lower economic base compared to others.

Eminent economist and columnist Solita Monson added two more dimensions to feel the economy better. She cited Philippine Statistics Authority numbers stating the following GDP absolute values of the Philippine economy: (2018 – P8.9 trillion), (2019 – P9.4 trillion) and (2021 – P8.95 trillion) ( First half of their respective years).

This drop in absolute amount is validated by the decrease in “per capita GDP” of Filipinos back to the 2017 levels – that instead of improving the lives of Filipinos: (2021 2nd Quarter per capita GDP is P42,132)  which is back to the 2017 level of P42,765 or even slightly worse off. We lost four years  and retrogressed backward.

Lack of government pandemic subsidy

There is one other disturbing fact.

According to the World Bank and the IMF, not only did the Philippines impose a  stricter lockdown for a longer time than the ASEAN neighbors, it had allocated the least in government subsidy to the people compared to these same ASEAN nations.  Senator Grace Poe said so correctly in understandable terms: it is as if the people were imprisoned in their homes for 16 months but were only given two months’ worth of food (“ayuda”).

Not only were the subsidy numbers lower than the ASEAN neighbors, but the distribution was also even flawed. Last week, the Senate Blue Ribbon Committee disclosed that the COA (Commission on Audit) flagged the DOH (Department of Health) for failure to release  P 64-billion in COVID funds to procure critical equipment and release the benefits to health workers.

On the farmers’ side, COA said that while the farmers were promised P10,000 each last December 2020 as aid, P9.8 billion was not used and reverted to the government coffers and P9.5 billion was not released by the DBM (Department of Budget and Management).

Meanwhile, COA pointed to the DSWD (Department of Social Welfare and Development) about the unused SAP (Social Amelioration Fund) worth P780 million affecting 139,300 beneficiaries or about 1.0 million including dependents.

Does one, therefore, still wonder why there are many  Filipinos poorer now and 50% having felt hunger sometime in the pandemic period?

Worse, Monsod cited PSA’s recent statistics that the  Government  Expenditure (one of three determinants of GDP growth aside from Consumer  Spending and Investment) descaled by 4.9 percent. in the 2nd quarter of this year. Bite some more bullet, Juan?

In the meantime, due to a combination of governance miscues and unfortunate events, Fitch (an international rating agency) already dropped the outlook for the Philippines from “stable” to “Negative.” This could mean that the ability of the government to maneuver fiscally (as in borrowing more) could be somewhat restrained henceforth  in anticipation of higher debt levels. What will save the Philippines?

Obviously, it is job creation. This means people – foreign and local – must first have CONFIDENCE in a government in 2022 so that they will invest, which is what creates more jobs for Filipinos.

This is why the country probably needs a 2022 President who is both a UNIFIER (of the People) and an INSPIRER (of business confidence)  to raise investment levels and consumer spending while government’s arms are partially locked. We need to get out of this merciless bind.

(Bingo Dejaresco, a former banker, is a Financial Consultant, Media practitioner and Book Author. He is a Life and Media member of FINEX. His views here, however, are personal and do not necessarily reflect those of FINEX. [email protected]).

 
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