People's Domain

The economy is diving down and gov’t is “alarmingly prepared”

While the COVID-19 trajectory is approaching the tipping point; the economy is moving on an opposite direction – diving down deeper to rock bottom in just 1.5 months. It is only now that I appreciated the usefulness of graphical curves. Yet I cannot show it here. 

The curves that I’m referring about are the ones that we have come to know because of Covid-19 – epidemic, economic, and recession curves. Interestingly, these curves facilitated an understanding about behaviors and tendencies that shape projections. It simultaneously show two patterns: what we are expecting once the epidemic curve have flattened, and what are the signals being communicated by an economic curve’s sharp journey downward. It signifies a recession. 

These restless curves brings us on the doorstep of government’s preparedness as we confront recession together with the rest of the world economies. 

Finance secretary Carlos Dominguez have revealed that the Duterte administration has a funding preparation for the Covid-19 and that the government has a lot of headroom, he stressed, once more spending is required by the crisis. Besides that, a stimulus package is on the works.

Let’s check the money. The fund that is flowing down from government’s faucet is part of the P27.1 billion package of priority action that is targeted to provide aid on the most affected sectors of our society, the poorest of the poor. The budget allocation constitutes mobilization for Covid-19 response and for various social protection programs distributed among different agencies for release to beneficiaries.

In addition, President Duterte has secured a three-month authority from Congress to exercise urgent measures related to the Covid-19 crisis through a passage of the Bayanihan to Heal as One Act (RA 11469). The law grants President Duterte the power to realign, reallocate, and reprogram a total of P275 billion out of P438 billion national budget for 2020.

These amounts is further boosted by conglomerates who are also discharging millions of pesos from their profits for conscience and social responsibility spending. The amount of accounted contribution as of April 1 is estimated to have hit a P1.6 billion mark. But San Miguel Corp. alone has reported having spent close to P1-billion on donations already. 

But as far as the Covid-19 crisis is concerned, the struggle to contain the virus is ongoing and the state of national emergency is far from over. In fact, its real impact will come in the form of economic crisis. This scenario will be our economic backdrop for the remaining months of 2020 and it will linger on for the next two years. 

Where do we stand now as our government confront the exigencies of the post-Covid crisis? 

The government is “alarmingly prepared” for the recession. What Sec. Dominguez was referring about when he said that the government is prepared for Covid-19, was a momentary kind of preparedness for it only covers two months (April to May). June onwards is a different crisis story altogether. 

It is mind-boggling to track the billions of pesos being executed for Covid-19, but it remains barely felt, especially by those who belong to the poorest of the poor, who have, by far, received 2 rounds of relief food package composed of two cans of sardines and two gantas of rice. If you have received your food pack late March, remind yourself that it is intended to last until the end of May. 

Government agencies are grappling with funds even when the budget has already been obligated. They are now made aware that midnight presscons are nothing but telenovelas with a storyline that no longer carry safety nets or second round response to people affected by the crisis. Take the Dept. of Social Welfare and Development for instance. Once the agency completes distribution of Social Amelioration subsidy – that’s it – it indicates that the Covid crisis is over, or so it seemed. No second serving. 

The government holds a “mythical stimulus package.” Sec. Dominguez have said that a stimulus package is on the works to resuscitate the economy from the pandemic. But he also project a zero to negative economic growth this year. 

The finance secretary is now at the helm of making this package possible considering the fact that President Duterte doesn’t know where to find or get the funding. Thus, he carry the mission statement: “magnakaw ka, maghiram ka, wala akong pakialam” as he made rounds among International Finance Institutions and ally nations like China for debt facility. 

The rich may be able to hold on for another month under home quarantine, but not the poorest of the poor and the middle class. The sector is now restless with job displacement, income loss, and with no savings to financially carry them through the rest of the crisis.
Preparedness? You guessed it.

*The opinion piece has appeared at the Opinion Section of www.imtnews.net

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