MANILA, Philippines—In one of the longest Christmas holidays in living memory, Filipinos stepped into a vacuum of a stupor of two weeks beginning on Dec. 24, bracing themselves for the worst of the Great Recession in 2009, without any concrete plan to blunt its shocks except wishful thinking.
Within this vacuum, the government ceased to be visible. It went into prolonged holiday with the rest of the population that it has lulled into a false sense of security about the resilience of our financial system that weathered the Asian financial crisis of 1997.
When Congress went into Christmas recess on Dec. 18, it left hanging two of the most important legislative documents on the national agenda—the budget for 2009 and the extension of the Comprehensive Agrarian Reform Program (CARP), which expires on Dec. 31 after surviving 20 years of sustained attacks by landlord interests trying to disembowel it.
Defining policies
Of the two documents, both defining economic and social policies, the budget is more critically important because it provides the wherewithal to cope with the most devastating global financial crisis since the Great Depression of the 1930s.
Deadlocks between the Senate and the House in trying to reconcile their respective versions of the budget bill are not an uncommon experience in our legislative history.
For the sixth time in eight years, the government will open a new year running on a rolled-over budget from the previous year.
The 2008 global financial crisis that came down with full force with the near collapse of Wall Street last October rendered irrelevant the assumptions of the 2009 budget. The proposed 2009 budget contains provisions for pump-priming the economy with a stimulus package as a response to the crippling effects of the financial crisis. Similar stimulus packages are being rolled out by other countries like India and the incoming administration of United States President-elect Barack Obama.
The World Bank has warned that East Asian economies, including the Philippines, will experience sharply lower growth in 2009. It has forecast that more Filipinos will start to feel the ill effects of the economic crisis in 2009, with gross domestic product expected to grow by only 3 percent.
P1-B stimulus package
The administration has proposed in the 2009 budget a P1 billion stimulus package for infrastructure spending. But the emergency provisions in the 2009 budget are no more than an ad hoc response and hardly addresses the critical issue of job creation. Nor does it spell out the specific targets of infrastructure spending.
There are no indicative targets for government spending in the modestly financed—when compared to the $700 to $1 trillion spending program that Obama is contemplating—Philippine stimulus package. This lack of details suggests haphazard planning.
For instance, the plan simply glosses over the magnitude of job losses for the country from the global economic crisis.
Unemployment effects
Sen. Edgardo Angara has highlighted the unemployment effects of the financial meltdown. During the deliberations on the 2009 budget, Angara said that “by next year, of the 5.1 million Filipino working abroad, 590,000 are at risk of losing their jobs.” He said some 50,000 to 100,000 Filipinos were already losing their jobs.
According to Angara, the secretary of labor who recently assured the public that “we are still okay” because the crisis had not affected the oil-rich Middle East, has ignored reports early this month that massive lay-offs had already taken place in Dubai.
The senator said that even if remittances from the overseas Filipino workers again reach record highs this year, the country should be prepared for slowed remittances and weak export markets next year.
The 2009 budget debate is the best platform to warn the public of impending trouble, said Angara.
Invest in infrastructure
He believes spending from the stimulus budget should focus on infrastructure, education, health, housing and the environment.
He said government can pump-prime the economy by investing in infrastructure.
“Infrastructure spending is the best way to create jobs and stimulate consumption, especially in the rural areas where we need it most,” he said.
“Public works [projects] place money in the pockets of our citizens. This will provide us with a safety net for our people,” Angara said.
Without targeted spending on public works, the stimulus package will be like throwing good money after bad.
No such targets for infrastructure spending are outlined in the 2009 budget bill submitted to Congress by Malacańang.
