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Business

Bayanihan 3: Beneficial or burdensome?

Elijah Felice Rosales - The Philippine Star

Special Report: (First of two parts)

MANILA, Philippines — Last year, Reynaldo Peligro, 58, crossed three regions spanning more than 80 kilometers by foot just to reach his family in San Jose del Monte, Bulacan, from a factory in Calamba, Laguna.

When President Duterte placed Luzon under lockdown, Peligro’s boss decided to shut the plant and send his workers home, making himself clear that a no work, no pay policy will be enforced.

As all forms of public transportation were banned, Peligro woke up at 7:30 in the morning of March 18 to walk his way through half of Laguna and the whole of Metro Manila to get to Bulacan.

Peligro remembers the torture he endured from bridging three regions with his two legs, and yet he rushed to the factory as soon as the President lifted the lockdown two months after. He said he would rather lose his limbs than see his wife and their grandchildren starve to death.

At present, Peligro earns at least P8,000 a month assembling car parts and gears for a firm that he has served since 1995. He rents a room – which can only fit a foldable bed and a monoblock chair – near the plant for P2,000 monthly, and only travels home every two weeks to save up on bus fare.

In his condition, Peligro said any cash assistance from the government, even just P500, would mean a week’s serving of rice, canned sardines, heck even instant noodles.

It is for people like Peligro struggling to survive the pandemic that policymakers should legislate and finance the Bayanihan to Arise as One Act, also known as Bayanihan 3, according to former socioeconomic planning secretary Ernesto Pernia.

Pernia, who resigned from Duterte’s Cabinet in April last year, said Bayanihan 3 will inject in the pockets of the most vulnerable sectors direct cash which they can spend for basic needs.

“When the economy is hurting from a downturn, what is needed is demand stimulus. Bayanihan 3 should be passed because, as a demand stimulus, it is the correct policy intervention,” Pernia told The STAR.

Bayanihan 3, passed by the House of Representatives in June, requires P165.9 billion in its first phase, P186 billion in the second and P48.6 billion in the third, for a total of P400.5 billion. More than half at P216 billion will be used to distribute P2,000 in ayuda to each Filipino.

Likewise, the measure dedicates P54.6 billion to cover for the pension arrears of retired military and uniformed personnel to address their cash needs during the pandemic.

Further, it allocates P30 billion for the government’s social safety net for families and individuals affected by the pandemic and another P30 billion for interventions in the farm sector intended to steady food supply and prices.

Ser Percival Peña-Reyes, associate director at the Ateneo Center for Economic Research and Development, said funding Bayanihan 3 will jumpstart the recovery of household spending and sustain the performance of the agriculture sector.

Although a P2,000 cash aid can only do so much, Peña-Reyes said this will empower the poor, hungry and displaced to spend for their basic needs, even to the benefit of subsisting suppliers. Last year household spending dropped by 7.9 percent on loss of jobs and income, dragging the consumption-based economy to crash by a record low 9.6 percent.

Peña-Reyes also said the government should put cash in people’s pockets rather than in banks, as the Bangko Sentral ng Pilipinas expects non-performing loans to rise to 8.2 percent in 2022. He added business owners worry about sinking in debt without assurance that they can pay up, no thanks to reverts to lockdown that force them to close shop.

On the other hand, Peña-Reyes said the P30 billion stimulus for agriculture will make sure that farmers in the regions—away from the virus epicenter Metro Manila—sustain their production to keep food prices within manageable levels.

As the industry and services sectors declined by 13.12 percent and 8.9 percent, respectively, in 2020, agriculture grew flat to somewhat mitigate the economy’s worst contraction in history.

They say the road to hell is paved with good intentions. Senators have yet to discuss Bayanihan 3 in their chamber, as the economic team scrambles to source P401 billion. From a question of why, the proposed stimulus becomes a question of how.

(To be concluded)

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