Think-tank blames 'harsh, overlong' lockdowns for rising poverty

ABS-CBN News

Posted at Aug 16 2022 12:41 PM | Updated as of Aug 16 2022 12:42 PM

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MANILA – Government must be held accountable for continued poverty in the Philippines, a think-tank said Tuesday, after government statistics showed poverty incidence rising to 18.1 percent equivalent to 19.99 million Filipinos in 2021. 

IBON Foundation executive director Sonny Africa said continued poverty in the country can be blamed not on the COVID-19 pandemic itself, but on government’s response to it.

“To be more precise, it’s not actually because of the pandemic, it’s because of the lockdowns, which are unfortunately 2 distinct things,” he said in an interview on ANC’s “Rundown."

“The pandemic hit every country in the world, but because the lockdowns of the Philippines was--we have held (them) ever since the start, they’re very misguided, they were too long, they were too harsh, the lack of public health measures and the overreliance on lockdowns to contain the pandemic, that caused the economy to contract,” he noted.

“Because other countries in Southeast Asia did not have as long lockdowns, did not collapse economies as much, did not increase poverty in the same way we did, I think that points to the government being accountable for the over long lockdowns and I think they should be held accountable for the continued poverty even in 2022.”

Africa said cash transfers are important in helping alleviate poverty in the Philippines.

“That’s always been our sticking point with the infrastructure program, a lot of infrastructure spending, specially with big ticket projects, that’s spent abroad. You know, it goes to importing materials, equipment, even contractors from Japan and China, and in terms of job generation, for instance, the Mindanao Railway Project, only about 5 percent or less of the whole budget goes to unskilled labor.”

“So it doesn’t actually get spent on creating employment, it doesn’t get spent in the Philippines and we’d argue, if you want to stimulate the economy, to get more bang for your stimulus buck, it has to be money spent in the Philippines, circulating in the local economy. As ayuda, as support to micro, small, and medium enterprises, as opposed to, you know a distant promise of infrastructure (that) will create opportunities down the line.”

“People are suffering right now, poverty is increasing right now, the money should be spent, here in the Philippines, right now,” he stressed.

Africa noted that government can generate funds for cash transfers by turning to more “radical options” like the imposition of a wealth tax.

“If the government thinks that the only resources to be generated are from consumption taxes, then it’s a fiscal straightjacket because people’s incomes are collapsing…for us, it really points to, if there is a huge amount of resources, untapped in terms of the wealth accumulated in a few Filipinos, that actually means that the government is tying its own hands,” he said.

“A wealth tax, even just at least a one-off wealth tax for a couple of years, or perpetual health tax on just the richest billionaires--that can generate resources for ayuda, for helping micro small medium enterprises, for subsidizing agriculture, for boosting domestic manufacturing.”

The expert said it is quite easy to identify the wealthiest Filipinos from publicly available documents. Collecting them, however, is a matter political will.

"If the government does feel that this is the moment, time of crisis that those who have benefited from the economy can give back more to the economy, I think that’s a question of the government pushing for that."

"And the president did say that he has the largest electoral mandate in Philippine history…and most of those who gave him that mandate are actually going to benefit from a wealth tax."
--ANC, 16 August 2022