The\n-11.5% growth, or contraction, in gross domestic product (GDP) in the\nthird quarter, confirms that the Philippines is on its way to\nbecoming the worst performing economy in Southeast Asia in 2020. The\neconomy is saddled by the Duterte administration\u2019s refusal to spend\non aid for Filipino families and support for small businesses so\nneeded amid the pandemic.<\/p>\n\n\n\n
A\nfiscal response commensurate to the crisis at hand is critical but\nthe economic managers are tying the government\u2019s hands. The\ngovernment package\u2019s demand-side effort is grossly insufficient and\neven undermines its supply-side measures.<\/p>\n\n\n\n
The\nPhp3 trillion in government spending in the first three quarters of\n2020 is only a 15.1% increase from the same period the year before.\nWhile this is larger than the 5.5% year-on-year increase in the same\nperiod in 2019, it is still much less than the corresponding 23.6%\nincrease in 2018.<\/p>\n\n\n\n
It\nremains to be seen how much more spending the administration can\nmanage in the fourth quarter of 2020. The Bayanihan 2 law is\nsupposedly the government\u2019s main response to COVID in the remaining\nmonths of the year. \n<\/p>\n\n\n\n
However,\nas of the president\u2019s last report to Congress at the start of\nNovember, it appears that at most just Php28.4 billion has been spent\nso far. With only a little over a month left in the law\u2019s\neffectivity, this is just 20.3% of Bayanihan 2\u2019s Php140 billion in\nappropriations and just 17.1% of its Php165.5 billion including its\nstandby fund. The report mentioned Php76.2 billion in allotments and\nreleases which appears relatively large. \n<\/p>\n\n\n\n
However,\nthe same report did not mention any actual disbursements in major\nitems especially for aid or support to small businesses or\nagriculture. These items with allotments released but not reported\nspent include: Php6 billion for the social amelioration program\n(SAP); Php13.1 billion for the COVID-19\nAdjustment Measures Program (CAMP),\nTulong\nPanghanapbuhay sa Ating Disadvantaged\/Displaced Workers (TUPAD)\nand Abot-Kamay ang Pagtulong\n(AKAP) programs; Php9.5 billion for\npublic utility vehicle (PUV) programs; and Php12.1 billion for the\nagriculture stimulus package. While there is supposedly Php8.1\nbillion for small businesses, only Php893 million worth of loans were\nreported.<\/p>\n\n\n\n
There\nis also little real stimulus in the proposed 2021 budget. The\nproposed Php4.51 trillion budget is a 9.9% increase from the 2020\nbudget. This is however smaller than the 13.6% increase in the\nprogrammed 2020 budget from the year before, and even smaller than\nthe historical annual average 11.1% increase in the national budget\nover the 35 years of the post-Marcos era. The Development Budget\nCoordination Committee (DBCC) actually projects an even smaller 5.3%\nincrease in 2022 which will be less than half the historical average.<\/p>\n\n\n\n
The\nDBCC initially projected the economy to have -5.5% growth in 2020. To\nachieve this, GDP will have to grow an impossible 6.6% in the last\nquarter of the year which is all the more impossible with the\nadministration refusing to give meaningful aid to millions of\ndistressed families and small businesses including in the country\u2019s\nvast informal sector.<\/p>\n\n\n\n
Additional\ndirect cash assistance to households is already pitifully small under\nBayanihan 2 and virtually non-existent in the proposed 2021 budget.\nThe record joblessness and collapse in family incomes because of the\ngovernment\u2019s poor COVID response compels much larger support to\nalleviate wide and deep suffering.<\/p>\n\n\n\n
The\neconomic managers also keep insisting that the CREATE law\u2019s\ncorporate income tax cuts will most of all benefit micro, small and\nmedium enterprises (MSMEs). This is untrue. Large taxpayers account\nfor an overwhelming 72% of all corporate collections as of 2019 which\nmeans that large firms will be the biggest beneficiaries of CREATE.\nMoreover, many MSMEs are also unregistered and in the informal sector\nso will not really benefit from any tax cuts under CREATE.<\/p>\n\n\n\n
The\nInternational Monetary Fund (IMF) projects the economy to contract\nwith -8.3% GDP growth in 2020. This is the worst GDP performance in\nthe region with other countries either contracting less or even\nregistering positive growth: Thailand (-7.1%), Malaysia (-6%),\nCambodia (-2.8%), Indonesia (-1.5%), Singapore (-6%), Brunei (0.1%),\nLao PDR (0.2%), Vietnam (1.6%), and Myanmar (2%).<\/p>\n\n\n\n
Even\nthe IMF\u2019s projected 7.4% GDP growth rebound in 2021 will still not\nbe enough to bring the economy back to its level last year in 2019.\nAs it is, the 2020 Philippine economy is going to be as small as it\nwas three years ago in 2017, and with GDP per capita approaching as\nlow as it was in 2016.<\/p>\n\n\n\n
\nThe\nPhilippines\u2019 COVID response is the smallest among those announced\nby the region\u2019s major economies, according to the Asian Development\nBank\u2019s (ADB) COVID policy tracker. This earlier reported the\nPhilippines\u2019 response as equivalent to just 5.8% of 2019 GDP which\nis smaller than in Singapore (26.2%), Malaysia (22.7%), Thailand\n(16%), Indonesia (10.9%), and Vietnam (10.1%).<\/p>\n\n\n\n
Months\ninto the worst economic collapse in the country\u2019s history, the\nDuterte administration\u2019s obsession with creditworthiness and the\nmyth of a fundamentally strong Philippine economy is preventing it\nfrom taking the measures needed for real and rapid recovery. Its\ninsensitivity is placing the burden of rebound and protracted\nrecovery on millions of poor families and distressed small\nbusinesses. ###<\/p>","protected":false},"excerpt":{"rendered":"
Statement | Months into the worst economic collapse in the country\u2019s history, the Duterte administration\u2019s obsession with creditworthiness and the myth of a fundamentally strong Philippine economy is preventing it from taking the measures needed for real and rapid recovery.<\/p>","protected":false},"author":3,"featured_media":10476,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[2048,14,961],"tags":[2408,2407,2199,2218,347,366,363,116,2248,2405,2406],"class_list":["post-10475","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner","category-news","category-statement","tag-akap","tag-camp","tag-covid-19","tag-covid-19-response","tag-duterte-administration","tag-gdp-growth","tag-gross-domestic-product","tag-philippine-economy","tag-sap","tag-stimulus-package","tag-tupad","wpautop"],"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-07-23 18:17:56","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/10475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/comments?post=10475"}],"version-history":[{"count":1,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/10475\/revisions"}],"predecessor-version":[{"id":10477,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/10475\/revisions\/10477"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media\/10476"}],"wp:attachment":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media?parent=10475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/categories?post=10475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/tags?post=10475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}