The pandemic’s economic fallout

Photo from Department of Trade and Industry’s (DTI) Facebook page.

PRESIDENT RODRIGO Duterte on March 16 placed Luzon under “enhanced community quarantine,” which restricts the movement of roughly 60 million Filipinos.

The quarantine mandated the temporary closure of non-essential shops as well as the suspension of public transport. For many, this meant the loss of jobs and livelihood. The shutdown of some 700 factories has slowed down production. Lockdown measures in certain areas have disrupted supply chains and trade linkages. Social distancing has limited consumer spending. Inevitably, the government’s measures to prevent contagion also created an economic crisis among its unintended consequences.

While it is still too early to determine the full extent of the pandemic’s economic impact, Socioeconomic Planning Secretary Ernesto Pernia told the Philippine Daily Inquirer that a recession “can’t be ruled out.”

News reports focused on the spread of the disease with case and death counts, as well as measures taken to care for patients. Important reports on the economy were relegated to the business sections of print and online organizations. Articles on the economic fallout of the pandemic barely made it to the front pages, reflecting the failure of some editors to see this as a critical issue that people should know about and which requires government attention.

Primetime newscasts did report on the impact of the quarantine on the informal sector and urban poor, but these reports did not carry any economic analysis.

Generally, piecemeal reports on the economy lacked coherence. Discussions did not examine how the government’s economic policies could be pursued given the pandemic and massive disruptions in economic activities.

There was very little effort to scrutinize the PHP 275 billion discretionary fund embedded in the “Bayanihan Act” that gave the president “special powers.” The disbursement of this emergency fund could be fraught with problems without a comprehensive, short- and long-term masterplan.

CMFR monitored reports from the three major Manila broadsheets (Manila Bulletin, Philippine Daily Inquirer and The Philippine Star); four primetime newscasts (ABS-CBN 2’s TV Patrol, CNN Philippines’ News Night, GMA-7’s 24 Oras and TV5’s Aksyon); as well as selected news websites from March 16 to March 23, 2020.

The president’s promises

The administration’s weak response to the economic crisis was apparent on March 12 when the president announced the month-long community quarantine in Metro Manila.

Other than his appeal for assistance from the private sector, the president did not mention the economy. Some reports noted how he offered to pay the rent of cash-strapped tenants and stand as guarantor for small businesses. Unfortunately, the media did not point out that these verbal promises, like many of his pronouncements, were not backed by  actual orders.

Disjointed efforts

In the days that followed, the media reported measures taken by different agencies, including the Department of Trade and Industry’s (DTI) price freeze on basic commodities, the Department of Agriculture’s (DA) food resiliency action plan and the Department of Labor and Employment’s (DOLE) financial assistance for displaced workers.

Media reported these separately, with nothing to tie the pieces together, which an editor could have provided, asking the questions that could have drawn out this lack as part of an overall picture of the government’s approach.

CMFR notes the exceptions: Cebu Daily News and GMA News Online carried a press statement from the National Economic and Development Authority (NEDA) calling for “seamless coordination and comprehensive planning” to mitigate the economic impact of the pandemic. GMA News Online emphasized the need for the government to balance both social and economic factors in its response. Cebu Daily News, for its part, cited NEDA Chief Ernesto Pernia who pointed out the need for the “whole-of-government approach” in crafting the policies and programs needed.

On March 24, NEDA proposed a three-phased program that would cover public health, rebuilding public confidence and resumption of “new normal” economic activity. The socioeconomic planning body, however, did not specify which agencies would be involved in the implementation. So far reports have not checked how the Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) was involved in the NEDA proposal.

Dubious emergency powers

No higher authority seems to have taken up NEDA’s plan as a guideline. And the media have not pursued the point with Palace officials. As though disconnected from all this, the government proceeded with the roll out of a PHP 27.1 billion fiscal support package from its 2020 budget; followed by the latest legislation that allows the president to re-program PHP 275 billion for the outbreak without requiring the breakdown for this allocation.


Overview: A call for leadership

The latest legislation which gives new emergency powers to President Duterte so he can assist and aid the poor does not spell out how such a massive operation will be accomplished. Again, the lack of a strategic plan and the absence of a system raise concerns about how these re-aligned funds would be put to good use in a timely manner. [READ MORE]

A closer look at the weak link in the fight against COVID-19

Crisis reporting calls on journalists to ask the right questions, creating the kind of interaction that could help both government and public, as such inquiries can lead to a more instructive flow of relevant information. [READ MORE]