Bills, kids, jabs: Philippines recovery strategy stuck a month into 2021
Commuters are seen queueing in this October 1, 2020 photo.
The STAR/Edd Gumban

Bills, kids, jabs: Philippines recovery strategy stuck a month into 2021

Ian Nicolas Cigaral (Philstar.com) - January 28, 2021 - 5:32pm

MANILA, Philippines — The Duterte administration’s optimism for a strong return to growth this year is getting a reality check from a sluggish loosening of restrictions and vaccine purchase as well as delays in legislations that economic managers said are badly needed for recovery.

Fresh from reporting a historic downturn last year, all Karl Kendrick Chua, acting socioeconomic planning secretary, could muster was a reiteration of a pledge for a rebound this year, yet still predicating that on two things: an easing of lockdowns sooner rather than later, and the passage of critical bills languishing in Congress.

Nearly a month into the new year however, signs of urgency seem to be lacking in both fronts and, compounded by a slow vaccination rollout, analysts said economic future remains bleak.

“2021 will test everything: it will test our resiliency, our economic foundation, our healthcare system and even our personal grit,” Chua said, reading into the economic managers’ statement on Thursday.

The three matters— vaccine procurement, relaxation of lockdowns, and passage of bills— are hardly interdependent on each other, yet developments on each were either murky or slowly unfolding. 


Take the vaccine as an example. Chua reiterated that the government has allotted P72.5 billion for their purchase, mostly funded by loans and grants. Officials had repeatedly said that next month, inoculations should start arriving, yet a clear blueprint on how mass vaccinations would proceed has remained unavailable.

Bryan Tse, country analyst the Economist Intelligence Unit, a think tank, said it would take the Philippines until the third quarter of 2023 to get 60% of the population vaccinated, the last among the so-called ASEAN-5 group.

“The feasibility of supply contract may be delayed by manufacturing bottlenecks and efficacy concerns,” he said in an email.

“Logistical challenges unique to the country…could make more difficult the transportation of vaccines within a certain temperature range,” he added.


While awaiting the vaccine’s arrival, the Duterte administration was banking on legislation to do the trick. The problem is bills deemed vital to return to prosperity are either stuck in the legislature or sitting idly on the president’s desk awaiting his signature.

These bills are the Corporate Recovery and Tax Incentives for Enterprises (CREATE), the Financial Institutions Strategic Transfer and the GFI’s Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE), each of which have different goals and, going into February, are stuck at various levels of legislation.

Among the three, FIST is the closest to enactment, having reached the president’s desk this week, Senate President Vicente Sotto III said in a text message. That bill aims to establish firms that would buy out bad loans from banks so they can lend. Presidential spokesperson Harry Roque did not reply to questions on when the bill will be signed.

CREATE is next in line, but the bill is so contentious that House and Senate contingents finalizing the measure are still at loggerheads on certain provisions. CREATE, once passed, would instantly lower corporate income tax rate to 25% from 30% for large firms, but a lot are also questioning whether its other provision that seeks to eliminate some tax incentives would be helping firms battered by the crisis.

Senator Pia Cayetano, head of the Senate contingent to the bicameral conference committee, gave a glimpse of how contentious CREATE is. “It’s been 2 months, dear colleagues,” she said in the Senate on Wednesday.

“I actually received a 57-page matrix of the changes they (House) want in CREATE. I can just imagine what these economic provisions are going to be about. I mean, seriously? A 57-page matrix on the changes in CREATE?”

“Yesterday, they said that they would be amenable to reducing it to three items, because the Senate had pretty much taken a stand that this is too much. This is what’s gonna go on,” she said.

The last bill, GUIDE, meanwhile was passed by the Lower House last year and is pending on second reading at the Senate. There is currently no update on the bill, which seeks to allow the government to buy stakes on companies under key economic sectors to prevent them from folding.  


Perhaps the most immediate reprieve to the economy there is, and one within the Executive’s control, is the further relaxation of quarantines. In fact, the government had moved toward that, announcing before the end of last year a pilot run of face-to-face classes with an end in view of slowly lifting other movement prohibitions. That decision, however, was reversed almost immediately upon consultation with the health department.

The most recent flip-flop was an order to allow kids aged 10 years and above to go out of their homes, supposedly because according to Chua, 50% of the economy is driven by family activities that only happen when kids go out with their parents. Days after the announcement, health officials detected the new and more contagious coronavirus strain from the UK in Mountain Province. Duterte was prompted to take back his order.

For Chua, however, such reversals are all expected as government continues to study the virus. But he also emphasized that lockdowns would have to go, sooner rather than later, if the economy is to see its way back to its glorious days.

“Further opening the economy in 2021 will require a careful and calibrated approach given risks from new virus strains. However, prolonging the status quo of community quarantine and risk aversion is not an option,” he said. — with Ramon Royandoyan

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