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Grim economic scenario in 2021

/ 04:01 AM September 15, 2020

In contrast to past years when the “ber” months were looked at with guarded anticipation, this year’s remaining months have become a season for anxiety about the future.

Acting Socioeconomic Pla­nning Secretary Karl Kendrick Chua said in a recent Senate hearing that poverty in the country could worsen next year due to the COVID-19 pandemic.

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He said the unfavorable financial condition would be felt more in the urban areas because of the adverse effects of the lockdown on sources of livelihood.

This projection jibes with the latest survey of Social Weather Stations (SWS), which showed 40 percent of adult Filipinos expected the economy to worsen in the coming months amid the pandemic.

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According to SWS, this sense of pessimism was the highest in over 12 years since the 52 percent recorded in 2008.

In 2008, the global economy was shaken by the housing bubble crisis in the United States that almost resulted in a repeat of the Great Depression of the 1930s where hundreds of businesses closed and thousands of Americans lost their jobs.

As the saying goes, when the United States sneezes, the rest of the world catches a cold and the Philippines was not spared that contamination in 2008.

For the Philippine National Police, historically, the ber months are marked with an upsurge in crimes against property, e.g. theft and robbery.

There is something in the holiday season that seems to encourage people with limited financial resources to join the gift-buying frenzy at the expense of others, regardless of penal consequences.

With thousands of Filipinos rendered jobless by the pandemic, ber months-related crimes may go higher than their usual levels in the past.

What’s more worrisome is that scenario may continue into the coming year unless the economy gets back on its feet and the unemployed (at least a substantial portion) get back their jobs.

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The government’s projection on poverty in 2021 is an input that companies still in operation should take into serious consideration when they do their corporate planning.

Business will no longer be conducted the way most companies have been used to in the past.

Unlike before when health issues in the work premises were treated as matters that were left to HR to attend to, this time (and until an effective vaccine on COVID-19 is discovered) those issues will become part of board meetings or corporate planning agendas.

The gloomy projection is somehow made less discouraging with the recent enactment of Bayanihan to Recover as One Act, or Bayanihan 2, which provides for, among others, the lending of billions of pesos to sectors that have been adversely affected by the pandemic, such as micro, small and medium scale enterprises, transport, tourism and agriculture.

This business stimulus package looks good on paper. It is well-meaning and reflects the desire of the lawmakers to provide the financial resources needed to bring back life to our economy.

But there is a whale of a difference between enactment and implementation.

Following existing administrative rules, the departments that would be tasked with distributing the funds would be required to come up with the appropriate implementing rules and regulations.

Since several departments are involved and knowing the way government officials can be very protective of their turfs, that process may take months to complete.

And even if those guidelines are finished within 90 days from the date the law became effective, which is the standard, the disbursement of funds cannot avoid compliance with strict government rules on documentation, audit and liquidation.

And, more importantly, the ease or difficulty of releasing the money would depend largely on the level of enthusiasm for efficient public service of the officials involved.

Let’s keep our fingers crossed this law will not join the ranks of other laws of similar nature that were long on promises but short on accomplishment. INQFor comments, please send your email to [email protected]

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