Recent Posts

Breaking News

Toward a New Normal

New Normal

DOMINO EFFECT The Covid-19 crisis is a threat not only to public health but also to the global economy (Image by Noel Pabalate)

By Jaime C. Laya

The Bayanihan to Heal as One Act (R.A. No. 11469) gives the President authority until June, to protect and care for health workers, to give emergency assistance to indigent families (P5,000-P8,000 for two months), and to take other necessary measures to deal with Covid-19 pandemic.
Meanwhile, of course, unemployment is reaching unbelievable levels. Manufacturing and commerce are at standstill. Malls have waived rents but with stores closed, sales people are jobless and merchants wonder how long they can last and if they will have enough working capital to reopen. Many companies have continued paying salaries, advanced 13th month pay and bonuses, converted leaves to cash, deferred loan payments, etc. Some have also voluntarily supported their service providers who have been on a no-work no-pay basis. Obviously this cannot last.
Agricultural production has continued but for want of transportation, it seems that harvests are rotting while city folk grab whatever is available. Construction has ceased, leaving thousands stranded in Manila, unable to return to their homes. A group was discovered in Cubao walking home to Tarlac from their discontinued project in Alabang, 30 kilometers away. It could be fake news but it is reported that a starving group in Quezon city is reduced to eating cats and rats. Restaurants, coffee shops, cafes are closed. Tourism is down as are hotels and resorts, air and bus lines. Events where social distancing is a problem, e.g., weddings, birthday parties, banquets, business meetings, conventions, sports events, even funerals, are cancelled, leaving unemployed cooks, waiters, dishwashers, musicians, movies, concerts, stage shows, florists, and further up the supply chain, coffee makers, bakeries, vegetable growers, flour millers, etc. Few go to work, leaving jeepney, tricycle and bus drivers, gas station attendants, idle.
Because Covid-19 is worldwide, OFWs are laid off and our BPO workforce could similarly suffer. Cruise ships are grounded, leaving Filipino seamen, cooks, waiters, and chambermaids jobless.
There will be a new normal after the lockdown and it won’t be for the better.
Expecting reduced housing demand and financing difficulties, a leading developer announced at its annual stockholders meeting that it plans to cut capital expenditures by more than half, throwing thousands of its own and subcontractor workers out of work. Other industries are bound to do the same. Supply chains have been disrupted and with unemployment, the optimism that drives demand will take time to recover.  The list could go on.
The only flourishing industries are mask and PPE production; services for groceries, veggies, cooked food, medicine; and remittance and online payment services.
The Bayanihan Act has two provisions on economic revival, both within the responsibility of the Bangko Sentral ng Pilipinas. The President is authorized to: (a) ensure credit availability through measures like interest rate reduction and reduced bank reserve requirements; and (b) direct banks, credit card companies, and other lending institutions to extend a minimum 30-day grace period on loan payments without incurring interest, penalties, fees, or other charges.  We have no unemployment insurance, which would have been a quick palliative and administratively easier.
On the fiscal side, government is focusing on Covid-19 control, including health worker welfare as provided by the Bayanihan Act. Relief goods are being distributed and DOLE has announced a 10-day emergency employment program focusing on disinfection and sanitation. Funding for these and other still to be determined activities are to be funded by national and local government, and government corporation funds, including GAA realignment and Treasury borrowings from the the Bangko Sentral  Credit availability has been the principal thrust so far announced. Bangko Sentral ng Pilipinas is easing its regulations to encourage banks to provide relief to borrowers. DTI is setting up an Enterprise Rehabilitation Financing Facility for micro and small enterprises. DA is inaugurating a loan assistance to marginal farmers and fisherfolk and agri-fishery micro and small enterprises.  With consumption, private investment, goods and service exports down, government investment is the major instrument available for economic recovery. This is a chance for rational and long-term capital expenditure.
Legislators have announced they will give up one month’s salary. Wouldn’t it be nice if they were also to give up all pork barrel, budgetary insertions, discretionary funds and, if the Executive, Judiciary and Constitutional Commissions were to follow suit, with everything pooled to implement a rational long-term development strategy.
This is an opportunity to complete projects with minimum re-election advantages, e.g., reforestation and water supply for power, irrigation and waterworks; public transportation for Metro Manila, Cebu, and other population centers; urban renewal and low cost housing a la Singapore; railroad modernization; maximizing agricultural production; upgrading public education; and maybe even a national government center that groups House and Senate and Executive Offices.
These will provide jobs for displaced Filipino construction workers, assuming imports of Chinese laborers stop. And oh, wouldn’t it be nice if politicians who profit from the crisis, like in relief goods distribution, are disqualified from future candidacy.
 Comments are cordially invited, addressed to walangwala888@gmail.com

Source: Manila Bulletin (https://lifestyle.mb.com.ph/2020/04/27/toward-a-new-normal/)

No comments