Death by underspending

By MARLEN V. RONQUILLO, Manila Times, 9 May 2021

With his establishment credentials and obvious lack of intemperance, former Economic Planning secretary Ernesto Pernia is beyond the harsh and brutal blowback routinely given to government critics. And because his resignation was based on disagreements over policy responses, he can’t be accused of sour graping either. So, we still don’t know how the government people would react to his Labor Day tweet: “Lack of virtuous impatience, also known as sense of urgency, has clearly shone in responding to and managing the pandemic.”

How true. And, with deftness and grace, Mr. Pernia framed his indictment of the government’s Covid-19 response in language so civil that it can’t be flagged by professional and state-sanctioned hate groups, the Red-tagging groups specifically. The government trolls may even drool over the words “virtuous impatience” and log it under “pro-government.” The trolls, usually brain-dead, may even think it was poetry written in the service of the Duterte administration.

But if we backtrack a bit, Mr. Pernia elaborated on the same critique a few months back, where he cited facts and figures on the per capita Covid-19 response of the Philippines in comparison with our neighbors and on the government’s miserable, pathetic and anemic fiscal response to the pandemic.

The Asian Development Bank (ADB), at about the same time of Mr. Pernia’s tweet, released snapshots of the regional Covid-19 spending that validated what the former National Economic and Development Authority director general said. As of April 26, these were the figures on such spending in some Asean countries, per the ADB database: Indonesia, $115.3 billion; Singapore, $100.5 billion; Malaysia, $97.9 billion; and Thailand, $94.9 billion. The Philippines? A niggardly, austerity-inspired $30.3 billion. Count out Vietnam, with Covid -19 deaths of fewer than 50, and which economy posted the most impressive growth in the region — many said it was better than China’s GDP growth — last year.

Simply put, the ADB figures confirmed in one spending graph what Mr. Pernia has been telling Filipinos all along regarding the Philippines’ Covid-19 expenditures: Pinakamaliit noon, pinakamaliit pa rin hanggang ngayon. There was a time when Timor Leste was spending bigger in terms of response to the virus than austerity-obsessed Philippines.

So, when you hear propagandists tout Bayanihan 1 and Bayanihan 2 and earlier supposed swift responses of the government to the crisis, just don’t fall into the trap of taking things in isolation and look at the broader, regional spending. Instead of going big and acting fast, we clearly shone around doing the least in the region in terms of protecting our people from the coronavirus and granting safety nets to those battered by it. And helping the businesses ravaged by the long government-imposed restrictions. Go slow, spend little.

If we were an economically prostrate country before the pandemic hit, the anemic spending could have some, although tortured, justification. We can claim that a high level of spending was beyond our capacity, our pay grade. But were we not the “fastest-growing economy” in Asia, which was actually the claim of government propagandists? Were we not, again according to the official version, moving into the inevitable next stage — joining the countries that have moved up from poverty into the cherished category called “middle economies?” And were we not planning to spend — supposedly spend — an amazing amount of P8 trillion for the “Golden Age of Infrastructure?”

Why did we fail to translate that economic momentum to spend generously for Covid-19 fighting? After all the prepandemic economic prosperity was built on the backs of Filipino workers. Why did the government opt to let them down — to the point of massive deprivation and hunger — for them to be brutalized and waylaid by the pandemic? The latest report by a state-run food and nutrition institute placed hunger at 60 percent but no one in the government, more so Dr. Duque, described recently as the “hero” of the pandemic containment work, seems to be aware of that level of hunger and food deprivation.

Governments, Keynes said, should not act as Mr. Scrooge during depressions and crises.

There should be massive public spending for jobs, for health, for food and the basic human and societal needs. Austerity results across the board malaise and we eminently proved that. Of the 20 major economies in Asia, we contracted the most at 9.6 percent in 2020. This year, the verdict is already out, we would be the regional laggard in growth and 2022 remains a question mark because of possible long-term Covid-19 scarring. Our unemployment rate is still a sticky 7 plus percent and our unemployment rate is more than 16 percent.

Looking at our pandemic spending levels, we can only think of No Deal instead of the New Deal.

It boggles the mind on what data sets and economic assumptions led to the decision to spend the least for the Covid-19 battle in the Asean region. We all know the background. We failed to contain the virus after the initial outbreak. The policymakers then hedged on massive restrictions to contain the spread of infections, which Filipinos by and large complied with. But the restrictions failed to work. In fact, the limitations imposed on the general population were one of the most stringent in the region.

The harsh lockdowns and the overall compliance did not yield desired results as the government failed to support the lockdowns and the compliance with generous ayuda for those locked down and with massive health investments to contain the rampaging disease.

Such miserable failures brought us to where we are today. Infections already past the 1 million mark and daily cases of about 7,000 and thousands of preventable deaths. Truly, deaths by underspending.