Ayuda still needed even with shift to GCQ

May 15, 2021

by IBON Foundation

Millions of poor and low-income households are still in desperate need of ayuda even with the Greater Manila area shifting to general community quarantine (GCQ). It is over a year into the pandemic and the harsh lockdowns that made jobs and incomes disappear. The crisis has not ended for Filipino families. Working class households are still going hungry and even the middle class is struggling to make ends meet. Tens of thousands of small businesses have shut down.

Filipinos were still grappling with the crisis when the new and higher wave of infections hit a month and a half ago. The government responded with more lockdowns while still not taking the rational public health measures needed. This is the biggest factor hindering economic recovery.

The poor and low-income majority of Filipino households are bearing the brunt of the crisis. Things are much worse for them than before the pandemic and the grossly inadequate government response. This includes the refusal to give the ayuda that so many so urgently need.

IBON explains why the Php10,000 ayuda for at least 1-2 months for 23 million vulnerable Filipino families is still very much in order:

  1. Unemployment is growing. The 3.4 million reported unemployed in March 2021 is 1.1 million more than before the pandemic in January 2020. IBON estimates that the real number of unemployed could be as high as 5.4 million if discouraged and unavailable workers not considered unemployed by the government’s methodology are also counted.
  • The quality of work is worsening. The government’s claim of 2.8 million new jobs created between January 2020 and March 2021 is overblown. By hours worked, over 3.2 million of the additional employment was just in part-time work (less than 40 hours) and full-time employment (40 hours or over) actually fell by 550,000. This caused the share of part-time work to increase from 31.6% to 36.7% over that period. By class of worker, over 2.6 million of the additional employment was in the informal sector (self-employed without paid employee and unpaid family workers) with wage and salary workers increasing by just 333,000. This caused the share of wage and salary workers to fall from 65.2% to 62% over that period.
  • Incomes are falling. The real value of the NCR minimum wage is 7.2% less today than at the start of this administration; measured at 2012 constant prices, this fell from Php468.06 in June 2016 to Php434.47 in April 2021.
  • Household savings are depleted. The savings of some 3.2 million families were wiped out last year. By the 4th quarter of 2020, around three-out-of-four (75.3%) of Filipino households did not have any more savings. This is equivalent to some 18.6 million families completely dependent on their daily incomes or debt.
  • Hunger is growing. Around 15 million or 62.1% of families went hungry last year. This was mainly from not having enough money or not being able to borrow enough to buy food.
  • Small businesses are shutting down. As much as 206,000 small businesses and entrepreneurs have closed shop due to the pandemic. This is approximated by the decline in employers in own-family operated farms or business reported by the latest labor force survey between January 2020 and March 2021.
  • Ayuda is shrinking.  The Php239.3 billion allocation for COVID-related ayuda under Bayanihan 1 was reduced to Php22.8 billion under Bayanihan 2, and even further to just Php18.4 billion in the 2021 budget. Beneficiaries ended up receiving quite token amounts. The public clamor for emergency cash assistance forced the government to give aid in the ECQ/MECQ-stricken Greater Manila area. However, the economic managers are still refusing to fully support even the small additional assistance proposed in the Bayanihan 3 bill.

Giving the Php10,000 ayuda demanded is extremely urgent. The amount merely approximates the government’s low official poverty threshold of Php10,756 and certainly does not come close to compensating the past year of collapsed incomes, anxiety and difficulty for tens of millions of Filipinos. This will give them immediate relief as well as, by spurring aggregate demand, make it easier to revive the economy.