Gov't ready to "redo" gains as coronavirus seen to worsen poverty

Prinz Magtulis - Philstar.com
Gov't ready to "redo" gains as coronavirus seen to worsen poverty
Newly appointed Socioeconomic Secretary Karl Kendrick Chua lists down his marching orders from President Duterte: an economic recovery plan, speeding up infrastructure projects and the roll-out of the national ID system.
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MANILA, Philippines — Poverty would likely worsen because of the coronavirus disease-2019 (COVID-19) outbreak, but the Duterte administration is prepared to "redo" efforts to push it down just as it did on its first two years, the caretaker of the National Economic and Development Authority (NEDA) said.

The scale of the damage is yet to be known, as the government, like the rest of the globe, navigates through "great uncertainty" with the pandemic still unfolding, acting Socioeconomic Planning Secretary Karl Kendrick Chua told reporters on Tuesday.

Under the medium-term plan, the government targets to slash the poverty rate to 14% by 2022. There were notable gains in 2018 when the proportion of poor Filipinos was lowered to 16.6% from 22% in 2015, but Chua indicated the outbreak may have pulled some Filipinos back below the poverty line.

"I would like to highlight...that we actually lifted 6 million Filipinos out of poverty. That is a very good start because we are not going to have to redo a lot," Chua said in a briefing via Zoom.

"But this crisis is going to have a significant impact on everyone's lives so that we reduce those risks especially for the poor and those in the informal sector," he added.

That said, Chua, who assumed his new position on Tuesday, underscored that early state interventions through cash aid, and assistance to small firm employees, are essentially targeted to temper the outbreak's impact, which is yet to be fully gauged.

Target tweaks

After Ernesto Pernia abruptly stepped down last Friday, Chua was tapped to take over NEDA, a succession that happened in the middle of the government's massive response to the COVID-19 outbreak.

While the transition went smoothly, Chua was also immediately tasked by President Duterte to accelerate the crafting of an economic bounce-back plan, a blueprint still in its early stages of drafting and would consider, among others, the "tradeoffs" included in the lifting or modifying the Luzon lockdown after April 30.

"It's not an easy decision so our thinking here is that we have to understand fully the tradeoff of the decisions that we will have to make. We have to be very careful," Chua said.

"Once we have an idea how much is the damage, the cost, the impact, then we will be able to propose a better crafted stimulus, fiscal, recovery or bounce-back plan. That is a more prudent approach," he added.

What is clear for now is that the "Build, Build, Build" centerpiece infrastructure program will be a crucial part of the recovery, although its present line-up would also be tinkered with to focus on projects with "maximum impact" on the economy.

Apart from the recovery plan, Chua said a revision of macroeconomic targets, including gross domestic product (GDP) and poverty goals, is also on the table, partly because of updates on how GDP is computed. State statisticians revised the base year for GDP calculations to 2018 from year 2000 previously on Monday.

In a text message to Philstar.com, Finance Secretary Carlos Dominguez III said the new targets should be ready before the government submits its budget proposal for next year to Congress, which typically happens in July. 

Before the pandemic and methodology revisions, the Duterte administration aimed to grow the economy by 6.5%-7.5% from this year until 2022, after a revised 6% expansion last year.

"The harder part (of revising the targets) are adjustments that is driven by COVID-19 crisis. So this is a process that we have started. It really depends on the kind of trajectory that we expect to see the economy," he said.

National ID

Part of Duterte's marching orders is also to speed up the roll-out of the national ID program, which aims to establish a single national identification for Filipinos, a mechanism observers say would have fast tracked cash aid distribution at this time.

The target for full implementation is still in 2022, but Chua said registration to the program would likely be brought earlier to this year.

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