Ayuda urgently needed to mitigate worsening poverty

August 21, 2021

by IBON Foundation

The enhanced community quarantines (ECQs) imposed throughout the country have ended. Yet cash assistance or ayuda is just trickling in with some areas having only distributed to less than half of beneficiaries. The government has just announced the transition from ECQ to modified ECQ (MECQ) to appease economic managers’ clamor to resume economic activities so the economy can recover. However, the Duterte administration’s over-reliance on destructive lockdowns without effective and substantial health and economic response, like much-needed ayuda, is what’s really worsening the crisis and pushing more and more Filipinos into poverty.

Trickling aid

Ayuda is necessary to dampen the impact of worsening poverty. This is as job and income losses have yet to be recovered and are even mounting with over a year and a half of repeated and ineffective lockdowns. Coupled with correct health and stimulus measures, emergency assistance can at least alleviate the economic distress of Filipinos, maintain some level of demand and consumption and put the economy on the road to recovery. Yet the government has increasingly made this less and less of a priority, leaving many vulnerable Filipinos to get by on their own.

For instance, the government’s budget for COVID-related ayuda has been shrinking – from Php239.3 billion under Bayanihan 1, to Php22.8 billion under Bayanihan 2, Php18.4 billion under the 2021 budget, and slightly increasing to Php22.9 billion for the National Capitol Region (NCR) plus in March 2021.

The administration has also made it clear that the passage of Bayanihan 3 or any other stimulus package is not a priority. Economic managers also claim they are still locating funds for this.

For areas put under the current ECQ, the government has only so far allotted around Php18.3 billion. Beneficiaries are supposed to receive Php1,000 per person or Php4,000 maximum per family for the 1-2 weeks of ECQ in some areas. However, this is not enough to make up for lost incomes. For instance, in the NCR, Php1,000 aid per individual falls short of even two days-worth of the measly daily Php537 minimum wage. And when looking at the family living wage of Php1,065 daily needed by a family of five to live decently, the Php4,000 max per household barely covers just four days of ECQ.

Ayuda amounting to Php10.89 billion was alloted to cover some 10.9 million individuals in the National Capital Region (NCR). But after Metro Manila mayors complained that the amount was not enough to cover all those needing assistance, Pres. Duterte only approved on August 12 an additional Php361.94 million for the NCR. So far, as of August 16, only Php4.5 billion or just 40.57% of the almost Php11.3 billion released by the budget department for the NCR has been distributed. Distribution only began on August 11 or almost one week into the ECQ and must be completed by August 25.

The government also allotted Php3.64 billion in ayuda for beneficiaries in Iloilo Province, Cagayan de Oro City, and Gingoong City in Misamis Oriental. Distribution also only began on August 11 with just Php1.2 billion or less than 33% of total cash aid funds distributed as of August 14. Meanwhile, assistance for Laguna (Php2.72 billion) and Bataan (Php698.28 million), which was also approved along with the additional amount for NCR, has only started to be distributed.  

The Department of Labor and Employment (DOLE) has said it will also provide aid to workers displaced by the ECQ who are not receiving cash aid under other programs. The agency will use the remaining Php4-billion fund of its Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) or cash-for-work program. DOLE has also requested from the budget department an additional Php2 billion for its COVID-19 Adjustment Measures Program (CAMP) which could give one-time cash aid of Php5,000 each to 400,000 displaced formal workers. But this request has not yet been approved and leaves hundreds of thousands of affected workers without assistance during the ECQ.

Worsening crisis

The country already had a weak economy and jobs crisis coming into the pandemic. But these have been made worse by the government’s refusal to take on bolder and effective measures to boost economic activity and protect Filipinos’ health, livelihoods and incomes. Substantial emergency aid, for instance, could have cushioned the blow of jobs and income losses and helped many vulnerable households recover and cope.

Despite economic managers’ claims, recent positive economic growth is not real recovery and is not expected to last in the coming quarters. This is further confirmed by the persistence of high unemployment and prevalence of poor quality work. The 3.8 million unemployed in June 2021 is still higher by 1.4 million than in pre-pandemic January 2020. The underemployed also grew to 6.4 million from 6.3 million.

While employment also increased by 2.5 million in the same period, many of these jobs have been low-paying and non-regular. By hours worked, there was a 1.2 million decrease in full-time work to just 27.5 million, while part-time work significantly increased by 3.6 million to a near record 17 million. By class of worker, there was a 769,000 drop in private wage & salary workers, a 1.3 million increase in unpaid family workers, and a 1.7 million increase in informal self-employed.

On top of the lost jobs and incomes, higher prices now compared to before the pandemic are making it even harder for struggling families to meet their basic needs. For instance, food prices have increased from January 2020 to August 2021: cabbage rose by Php140 to Php180/kilogram (kg); pork by Php120 to Php360/kg; ampalaya by Php75 to Php160/kg; eggplant by Php60 to Php140/kg; tomatoes by Php30 to Php100/kg; and fish like galunggong (by Php40 to Php240/kg) and tilapia (by Php10 to Php130/kg). The price of regular-milled rice also increased slightly by Php3 to Php38/kg.

Worsening poverty

Because of the weak economy, jobs crisis and price hikes exacerbated by the government’s poor pandemic response including its stinginess with ayuda, even more Filipinos are living in or are one the brink of poverty. Even the National Economic and Development Authority (NEDA) has estimated that there are an additional 250,000 poor Filipinos and additional 600,000 unemployed due to areas being put under ECQ, modified ECQ and general community quarantine (GCQ) with heightened restrictions.

Further indicators of worsening poverty are the declining household incomes and lost savings. IBON estimates that the poorest 70% of families (about 17.3 million) lost an average of Php13,000 – 32,000 in the past 17 months (March 2020 – July 2021). Meanwhile, the number of households without any savings rose by 2.4 million from 15.4 million in the first quarter of 2020 to 17.8 million in the second quarter of 2021. This means over 7 in 10 or 71.7% of total households are completely dependent on their precarious daily earnings or debt.

Widespread hunger and inability to access basic social services are further signs of more impoverished Filipinos. According to the Food and Nutrition Research Institute, around 15 million or 62.1% of families experienced moderate or severe food insecurity in 2020 due to not having enough money or being unable to borrow money to buy food.

Meanwhile, a recent household survey cited in the World Bank’s June 2021 Philippines Economic Update showed that 2 in 5 Filipino households worried about not having enough food to eat for the next week. It also noted that households had a hard time accessing health services due to a lack of money. This was cited by 3 of 5 households as a reason for not getting needed medical treatment.

Many areas in the country have already undergone several hundreds of days of multiple harsh lockdowns and are suffering from the ill effects of these. Yet the Duterte administration chooses to ignore worsening poverty and scrimp on much-needed cash assistance. To mitigate poverty, government needs to ensure substantial ayuda and support to help Filipinos in need. Real and substantial spending on the people’s immediate needs as well as that of the production sectors and small businesses is urgent to recover from the harsh impact of the pandemic crisis and lockdowns on livelihoods and incomes.