Boosting social services key to reviving economy post-COVID: think tank


Posted at Nov 12 2021 02:00 PM

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MANILA – Spending on social services may be a better way of reviving the economy, a think-tank said, as lawmakers tackle the 2022 proposed national budget that prioritizes infrastructure.

Under the 2022 proposed National Expenditure Program—deemed a COVID-19 recovery budget by Senate Finance Committee chair Sonny Angara—the Department of Public Works and Highways (DPWH) has the second biggest allotment at P665.5 billion, behind only the Department of Education’s P738.6 billion.

Institute for Leadership, Empowerment, and Democracy (iLEAD) executive director Zy-za Suzara said that prioritizing infrastructure to revive an economy crippled by the COVID-19 pandemic may not work well for the country in the short term.

“The problem with funding ‘Build, Build, Build’ so much in the middle of the pandemic is like it’s blind to the real impact of infrastructure spending on our economy,” she said.

“If you look at the spending performance, particularly the disbursement rate or how much the DPWH or (Department of Transportation) is actually using up year-on-year for their infrastructure spending, it’s actually on average just 40 percent last year.”

“So…if we really want our economy to recover quickly then low disbursing programs such as infrastructure projects might not be the best way to do it in the short term.”

“That’s really because what’s counted in our GDP numbers are the actual disbursements from DPWH and DOTR or the actual payments made by DOTR and DPWH for infrastructure projects,” she explained.

“Now with respect to social services, social services are more fast-disbursing but that’s of course based on the assumption that government agencies have better absorptive capacity as well during this pandemic.”

“That’s because social services projects involve direct cash assistance such as those lodged in the (Department of Social Welfare and Development) for the 4Ps program, things like emergency livelihood program, jobs assistance in the (Department of Labor and Employment), those are more fast-disbursing in the sense that because it’s directly, it’s support directly given to the people,” Suzara explained.

“Then it has a better chance of helping stimulate the economy in terms of spending since, you know, our economy is a consumption-driven economy,” she said.

Suzara lauded the Senate’s efforts to boost the budget for social services, such as funding to help seniors and other vulnerable sectors, the emergency employment assistance under the DOLE, the free COVID-19 testing for job seekers, and the increased subsidy for small businesses
She said she is not sure, however, if these will be enough to help the Filipino people.

“To be able to answer if those funds, those increases in the budget of DSWD, DOLE, and the SB Corporation or the (Department of Trade and Industry) itself are sufficient, we have to consider our economic situation. So even if our GDP growth in the 3rd quarter grew by 7.1 percent, the fact is unemployment is still high. Four million Filipinos are still unemployed.”

“So that means, lost income, lost jobs, lost livelihoods. So these are the people who would actually need help.”

“And I don’t think, I mean just looking at those topline numbers I don’t think such increases in the budgets of DSWD and DOLE will be enough to tide over four million unemployed Filipinos, not to mention Filipinos who’ve probably slid down the poverty line because of the protracted public health and economic crisis we’re now facing,” she said.

Suzara also noted the P44 billion in additional funding that the Senate granted to the Department of Health may not be enough to further help control the spread of COVID-19.

“With respect to expanding COVID-19 testing capacity there’s nothing that we see there in the budget of the DOH. What’s there is basically to buy, you know, testing kits and other perhaps laboratory commodities to be able to help in the operations of existing laboratories,” she said.

“There’s nothing by way of putting up new laboratories or, you know, especially in other regions where the surges have also been high in the past few months. And then there’s only P1 billion for contact tracing.”

“We’re not entirely sure if without expanding massive testing and without having a better and more integrated contact tracing system, we could actually make more targeted lockdowns work,” she said.

“If you look at the health budget, that grew by 17 percent compared to this year’s current budget. But we still see, at least in our assessment, it’s still not enough to fight the pandemic,” she added.

Suzara also said the Senate is justified in slashing the anti-communist insurgency task force’s budget and diverting a portion of its funds to the health sector.

“If you ask me, the Senate is very much justified in slashing these budgets, because of course the fiscal space is limited and so the executive branch and even Congress needs to be very careful and more prudent in allocating the funds.”

“So non-priority expenditures such as those that prioritize security should be de-prioritized somehow and channeled into health services and social services,” she added.

--ANC, 12 November 2021