Just like many COVID-19 patients fighting for their lives, what the Philippine economy needs right now is a sturdy ventilator for life support.
But at the rate government is distributing aid, our economy’s ventilator seems dismally broken.
On March 25, President Rodrigo Duterte signed the Bayanihan to Heal as One Act. This chiefly authorized him to marshal resources to fight COVID-19.
That law also mandated government to hand out disaster relief. Specifically, it provided for a monthly “emergency subsidy” to help tide over 18 million households whose incomes and livelihoods have been diminished (or totally swept away) by the pandemic.
But this aid program, no matter how well-meaning, is too little, too slow, and too politicized.
First, the emergency subsidies are so low they don’t even hurdle poverty lines.
Each beneficiary family is entitled between P5,000 to P8,000 a month, in both April and May. (The exact amount depends on the beneficiary’s region of residence.)
But the graph below shows that in all regions the cash transfers are well below 2018 regional poverty lines. In other words, the monthly subsidy isn’t nearly enough to meet the minimum income needed by a family of 5 for basic expenses, such as food and shelter.
How did government settle on P5,000 to P8,000 anyway?
The Bayanihan Law said the transfers ought to be based on prevailing minimum wage rates, which vary across the regions. To my mind, however, a better benchmark would have been the government’s regional poverty lines (although this would mean the total subsidy bill might nearly double).
The emergency subsidy is made even more inadequate by the following:
First, costs of living have risen since 2018, so poverty lines today must also be higher.
Second, the emergency subsidy program exempts too many people.
These include beneficiary households of the Pantawid Pamilyang Pilipino Program or 4Ps (they will just get a top-up over their grants), pensioners, and senior citizens with working sons or daughters.
But it’s not as if these people receive a ton of money from their safety nets. The maximum transfer a family can get from 4Ps doesn’t reach P6,000 a month. With the economy in forced hibernation, senior citizens can scarcely rely on their families’ incomes or remittances.
Third, it’s not at all unusual for several families to live under one roof. All too often local executives have confused “families” and “households,” divvied up the benefits, and shortchanged many poor families.
Second, delivery of the emergency subsidies has been painfully slow.
Giving aid to 4Ps households – totaling 4.4 million – should be relatively quick: they already have their cash cards, so the infrastructure to deliver aid to them is already there.
As of Wednesday, April 15, nearly 3 weeks since the Bayanihan Law took effect, the Department of Social Welfare and Development (DSWD) has handed out aid to 3.7 million 4Ps beneficiaries.
The bigger challenge is giving aid to the 14 million beneficiary households who aren’t covered by 4Ps. The stark, sad truth is that government is ill-prepared to quickly distribute aid at this scale.
So far the DSWD has given aid to a mere 170,989 – or a little over 1% – of these non-4Ps households.
Note the program doesn’t even cover yet all lower-middle income households, nor those at the very middle of the income distribution.
The DSWD has Listahanan, a master list of some 15 million low-income households, which should be a good place to start targeting non-4Ps beneficiaries. It seems government still hasn’t maximized this list yet.
Giving out aid to 10 million households should also be easier now, what with the unconditional cash transfers (UCTs) distributed in the wake of the 2017 TRAIN Law. But apparently, owing to logistical problems, government has yet to pay out P18 billion of UCTs due last year.
Identifying beneficiaries would also be a lot easier had there already been a national ID system in place. In mid-2018 Duterte already signed the law for this program, but its rollout has been slow.
Third, the distribution of aid has been heavily politicized.
Money isn’t the biggest problem now: the DSWD has already downloaded P57.5 billion worth of emergency subsidies to various local government units.
Rather, government isn’t sure whom to give such money.
To identify eligible households, local executives are handing out “social amelioration cards” which potential beneficiaries must fill out and submit. Local executives must then transmit the information to the DSWD for validation.
But all this bureaucracy is making lots of people angry – more like “hangry” – and mayors and barangay captains are almost exclusively at the receiving end of the public’s ire.
The DSWD allots per city or municipality a fixed number of beneficiaries who can get aid. But local executives nationwide have decried this “quota system,” saying more families need help than the DSWD had originally indicated.
Absent clear guidelines from the DSWD, local executives have been forced to improvise and, in some cases, deliver supplementary aid on their own.
Governments worldwide are grappling with the trade-off between giving aid quickly and the necessity of targeting such aid (to avoid, say, duplications or arbitrary rules).
For some people, the pandemic presents a strong case for universal basic income (UBI). This entails giving cash to each and every Filipino above a certain age – no questions asked. Unencumbered by pesky targeting, money could reach more people quicker.
The case for UBI is gaining traction worldwide, and makes particular sense in countries where the majority of people are vulnerable to all manner of disasters and shocks. Pope Francis even expressed support for UBI in his Easter letter.
UBI will be expensive: in the Philippines a one-month subsidy of just P1,000, given to all Filipinos 10 years old and above, might already cost P87.2 billion.
But since we’re one of the world’s most disaster-prone countries, maybe UBI deserves from our policymakers more than a passing glance.
Let’s rethink social protection
It’s not too late to improve the delivery of COVID-19 aid.
But sooner rather than later we also need to rethink and reform our country’s broader social protection system: if anything, this crisis has shed light on just how fragmented and puny it is (just about 1% of our nation’s income).
Sadly, too many of our policymakers, acclimatized to wealth and privilege, are inured to the plight of the poor. They’ve grown complacent and thought 4Ps is enough.
Yet risk and uncertainty come in many shapes and sizes, and in some catastrophes – like this one – the enemy doesn’t really distinguish between rich and poor.
May this pandemic open our leaders’ eyes to our need for more holistic, inclusive, and permanent social safety nets. – Rappler.com
The author is a PhD candidate and teaching fellow at the UP School of Economics. His views are independent of the views of his affiliations. Thanks to Aura Sevilla for useful comments and suggestions. Follow JC on Twitter (@jcpunongbayan) and Usapang Econ (usapangecon.com).