It could work

Published by rudy Date posted on February 4, 2009

It may not be a whole lot of money, considering the amounts really needed. But it’s a lot better than merely sniping at the government while thousands are already losing their jobs and any hope of improving their lives in the near future.

The government’s proposed P330-billion economic stimulus program could go a long way in easing the effects of the worldwide financial crisis in the Philippines. But that’s only if the sweeping infrastructure, employment and social welfare project also known as the economic resiliency plan is implemented with speed, transparency and accuracy.

Already, opposition politicians are sounding the alarm about the program, some of them imputing political (or even larcenous) motives on the Arroyo administration for making the proposal. But since next year is an election year, these brickbats can be largely ignored, because they are hurled by politicians with one eye already fixed on the polls.

Rescuing the people most affected by the growing malaise caused by the worsening crisis, after all, is not something that can be done by some “fiscalizing” senators out to raise their profile in the press. And since the clock continues to tick, the government must act right away and do everything in its power to provide what safety nets it can to the people who are losing their jobs and their security because of the crisis.

Others, more objectively, wonder when the specifics of the program will go beyond the “framework” drawn up by Socioeconomic Planning Secretary Ralph Recto last month, when it was unveiled. While Recto has outlined the program in broad strokes, the lack of specifics is only fanning the doubts of those who could be swayed by the do-nothing propaganda of the opposition politicians.

What, so far, has been proposed? According to Recto, the government’s response to the global economic crisis is a program that will upgrade infrastructure and capital stock and expand social protection at the same time—while aiming for growth by yearend that will be on the higher end of the projected 3.7-4.7-percent GDP increase that the state predicts for the entire year.

According to Recto, the government aims to save and create jobs (up to one million by July), protect the poorest of the poor, returning migrant workers and workers in export industries, ensure low and stable prices to support consumer spending and enhance competitiveness in preparation for the end of the worldwide recession. Most of the money, he said, would be spent in the first half of the year, so that those already affected by the crisis will benefit right away.

Contrary to the claims of the anti-Arroyo politicians, most of the money for the program will not come from new sources, such as the P50-billion combined “pot” to be put up by the Development Bank of the Philippines, the Land Bank of the Philippines, the Government Service Insurance System and the Social Security System. Taken with the P50-billion counterpart promised by Philippine businessmen, this will amount to only less than a third of the entire program, all told.

Most of the money to fund the plan involves spending 60 to 80 percent of the productive portion of the 2009 budget of government agencies during the first semester, with particular focus on the infrastructure sector. Recto said that in the first semester of 2008, the government—which accounts for 20 percent of the country’s gross domestic product—spent only 30 percent of its budget.

The planned frontloading and spending for the first half of 2009 is expected to boost private sector confidence in the economy. Instead of having “savings” by the end of the year that benefit no one, government agencies that will participate in the program will be able to use money already allocated in this year’s budget to jumpstart the ailing economy, according to Recto.

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What infrastructure projects will be funded? The Neda boss said the government wants to spend for fast, off-the-shelf infrastructure projects that have simple engineering requirements and no right-of-way problems. “We are encouraging the government financial institutions, government-owned and-controlled-corporations, local government units and the private sector to participate in these infrastructure projects,” Recto said.

The projects are expected to perk up the building sector and save the jobs of millions of workers as development slows down because of the crisis, while also improving public works such as roads, bridges, mass housing and other infrastructure. Of course, the current controversy about the World Bank’s blacklisting of several Chinese and local firms could put a damper on any new big-ticket project, but the government intends to pursue the make-work infrastructure program nonetheless, which is a good thing if it really wants to create new jobs.

As for giving jobs to those who lost them in the export sector and abroad, the government intends to provide more incentives to export-oriented companies to diversify and to retain their people. Safety nets for Filipinos returning home after losing their jobs abroad because of the recession will also be funded by the program.

As far as the aid component of the program is concerned, government wants to increase spending for hospitalization benefits through PhilHealth and the Health Department, while decreasing taxes for low-income wage earners. It will also increase the Social Welfare Department allocation for conditional cash transfers to include an additional 321,000 poor households by giving them a maximum cash grant of P9,000 per year.

All of this sounds really good, if the intended beneficiaries really get the jobs and the aid that the government wants to give to them. Unfortunately, beyond Recto’s rough guidelines, many are troubled by the lack of specifics in the program—especially which infrastructure projects will be given priority in the resiliency program.

The lack of details is also fueling suspicion that the usual hanky-panky could become the rule in the bidding out, awarding and actual implementation of the projects. More than anything else, transparency should be the government’s key word in implementing the infrastructure projects that the program will begin and complete, if it wants to avoid any more repeats of the World Bank bidding anomaly kind.

Also, there is the question of the speed by which the entire program will be implemented. Every day, hundreds or thousands are losing their jobs, especially in export-oriented companies whose markets are drying up. Unless the government acts right now to get the plan off the drawing board, we could see social and political unrest as more and more people lose their sources of income with the government not lifting a finger to help them.

Finally, there’s the matter of accurately identifying the intended beneficiaries of the program, so that the people who really need the aid and the jobs the government is promising in these trying times benefit. If only the contractors and suppliers, the middlemen and the traders and corrupt government officials benefit, and if whatever money is left is spent on useless white elephants, then we might as well scrap the whole thing and leave everyone to their own devices.

But government shouldn’t miss this golden opportunity to help the citizenry, especially those who need its help most these days. If the program is implemented properly, with speed and transparency, we may help the poor and the jobless survive this crisis, which is already bringing many powerful economies to their knees.–Jojo Robles, Manila Standard Today

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