Among all members of the Association of Southeast Asian Nations (ASEAN), the impact of the pandemic on incomes is worst in the Philippines. The even more dreadful news is that the Duterte administration is providing the least resources for economic aid to support affected workers and other vulnerable sectors.
Based on a recent survey by the Asian Development Bank Institute (ADBI), 67% of Filipino households saw their income drop by more than 25% due to the pandemic. Indonesia ranked second with 64% of households and Malaysia, the lowest, with 40 percent. The ADBI study was published in March 2021.
Further breaking down the data, more Filipino households also suffered the steepest declines in income during the pandemic than any of our ASEAN neighbors. About 21% of Filipino households had their income fall by more than 75 percent. Three countries (Cambodia, Indonesia and Thailand) had 11% of their households experience such decline in incomes during the pandemic; Vietnam posted the lowest with four percent. Similarly, an income decline of more than 50% was felt by 41% of Filipino households; Indonesia is a far second with 27% of households while Vietnam recorded the lowest with 15 percent.
The ADBI survey also noted that in the ASEAN overall, the income class of household on average is not related to the likelihood of experiencing a decline in income. This suggests that the pandemic affects the income of all households regardless of their economic status before the pandemic. But the trend is different in the Philippines where households in the lower-income classes are more likely to have income declines than those in the upper-income classes. This means that the fall in income in the Philippines described above was a phenomenon mainly felt by the poorer households.
Consequently, the Philippines also ranked first in the region in terms of households that experience financial difficulty during the pandemic. About 85% of Filipino households indicated in the ADBI survey that they were having financial difficulty; Indonesia followed with 84% while Myanmar ranked the lowest at 27 percent.
Obviously, the poorer the household, the greater the likelihood of financial difficulty during the pandemic. This however is more felt in the Philippines than in any other countries in the region. In ASEAN overall, the average difference in the likelihood to get into financial difficulty between the richest group and the poorest group is 20 percentage points. But in the Philippines, the difference is a huge 40 percentage points, the worst in the region.
More than half of Filipino households or 51.8% said that if they lose all of their income sources, their resources to cover daily needs could only last up to two weeks. It is the second worst to Indonesia which had a staggering 86.6% of households saying that their resources will not last for more than two weeks. About 73.2% of households in the Philippines will not last beyond a month; 87.3% will not last beyond three months.
These numbers summarize the economic hardship experienced by millions of households when lockdowns are implemented. The ADBI study illustrates how such suffering is more severe for poor households in the Philippines compared to other ASEAN countries.
According to government data, 9.1 million workers lost their job between March 2020 and February 2021. Of this number, 2.2 million remain jobless up to this day, adding to the current number of unemployed which stands at 4.2 million based on official data.
The actual extent of unemployment could be much widespread than what government numbers show. For instance, based on surveys of the Social Weather Stations (SWS), the number of jobless adults averaged 21.2 million in 2020. In 2019, the average was 9.3 million which indicates that the number of jobless swelled by 11.9 million during the pandemic.
Nonetheless, latest available official unemployment data again show the Philippines as the most impacted by the pandemic. As of February 2021, the unemployment rate among Filipino workers is pegged at 8.8% and was at 8.7% in January. In Indonesia, unemployment rate is at 7.1% (August 2020); Malaysia, 4.8% (December); Vietnam, 2.5% (December); and Thailand, 1.9% (December).
With the reimposition of lockdowns, Filipino households face more miseries. The National Economic Development Authority (NEDA) said that lockdowns cost PHP 700 million to PHP 2.1 billion in lost wages every day. Government economic managers also expect unemployment rate to remain at almost twice the pre-pandemic levels up to 2022.
Sadly, the Philippine government also allocates the scantiest resources for economic support to those impacted by the pandemic. Based on the COVID-19 policy tracker of the International Monetary Fund (IMF), the Duterte administration’s fiscal package for vulnerable individuals and groups is equivalent to 3.1% of the gross domestic product (GDP). The package includes cash aid program for low-income households and social protection measures for vulnerable workers, including displaced and overseas Filipino workers (OFWs).
In contrast, Thailand’s package of support for its workers, farmers, and other vulnerable sectors, including subsidies for daily household needs like water and electricity is about 9.6% of its GDP. Indonesia allotted an equivalent of 4.4% of its GDP for assistance schemes to its low-income households, for unemployment benefits and tax relief. Malaysia’s stimulus package is around 4.3% of its GDP, intended for cash transfers to low-income households, wage subsidies, electricity subsidies, etc. Even Vietnam allocated a higher 3.6% of its GDP for cash transfers, deferred tax payments, etc.
Duterte, in a leaked memo, instructed all government media platforms “to carry regular updates about the world data on COVID-19, specifically to convey to the public that the Philippines is faring better than many countries in addressing the pandemic”. The order is an attempt to counter the widespread criticism on government’s inadequate response to the crisis, but it merely further exposed Duterte’s incompetence.
Because no matter how government spins the data, the deteriorating situation on the ground confirms what the numbers show – that the Philippines has among the worst levels and suffers the gravest impacts of the pandemic; and that government response is among the most inadequate and failed. ###