Fewer Pinoys trapped in poverty during the 2020 lockdowns

The “Bayanihan” cash doleouts to vulnerable households and businesses during the Philippines’ most stringent pandemic lockdowns lessened the number of Filipinos who slid to poverty, the World Bank said.

But the Washington-based multilateral lender’s report on the implementation of its $500-million emergency COVID-19 response development policy loan said the Philippines was unable to efficiently distribute money at that time due to the lack of a national ID system and, in turn, a dearth of database to identify the country’s poorest.

“Despite the challenges faced by the Philippine government in providing support during the pandemic of unprecedented scale and scope, evidence suggests that the Bayanihan packages were effective in mitigating poverty during the pandemic,” the June 15 report read.

The Bayanihan to Heal as One (Bayanihan 1) and Bayanihan to Recover as One (Bayanihan 2) Laws provided stimulus to the pandemic-battered economy through end-2020.

Nearly 22% poverty rate

The World Bank estimated that the cash transfers under the Bayanihan 1 and 2 Laws capped the country’s poverty rate at 21.9 percent in 2020 versus 23.5 percent if no doleouts had been given away. However, poverty could have been even lower at 20.3 percent then if the government had been able to implement a “perfect targeting” or had a system of identifying the beneficiaries who needed such cash assistance.

For 2021, the World Bank’s estimates showed the Bayanihan laws had lowered the poverty rate to 21.2 percent instead of 21.5 percent without the financial assistance, although the share of poor Filipinos could have been a slightly lower 21.1 percent with perfect targeting.

“The results suggest that the Bayanihan packages could have had a much greater poverty-reducing impact if social assistance measures were enhanced for better coverage and adequacy, targeting, and delivery,” the World Bank said.

Among the poorest households, the World Bank said the cash doleouts or so-called social amelioration program (SAP) tempered pandemic-induced poverty. “Poverty incidence declined by an estimated 1.6 percentage points (ppts) in 2020 due in large part due to the SAP. Moreover, poverty could have declined by an additional 1.6 ppts if transfers were efficiently distributed to targeted beneficiaries.”

Citing Philippine government data, the World Bank said the SAP across the different agencies’ subsidy programs benefited 17.9 million low-income families, 150,000 overseas Filipino workers, as well as 994,399 formal and informal sector workers.

As for businesses, the World Bank said the small business wage subsidy, whose disbursement had been spearheaded by the Department of Finance, “was effective in stemming job losses.”