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How COVID-19 impacted vulnerable communities in the Philippines

Ditte fallesen.

Man and two girls walking in a neighborhood in the Philippines. ©Ezra Acayan/World Bank

When people around the world started to bear the brunt of the COVID-19 pandemic in mid-2020, the World Bank launched COVID-19 surveys to monitor the social and economic impacts of the pandemic on communities.   In the Philippines, the community survey conducted in collaboration with the Department of Social Welfare and Development (DSWD), provided important insights on how best to deliver pandemic response and recovery programs aimed at supporting the poorest and most vulnerable rural communities. Respondents included community volunteers and barangay (village) officials from some of the poorest communities identified through the country’s existing national community-driven development project . 

In August 2020, the first round of the community survey had 180 respondents representing 101 barangays. The second round in April 2021 had 200 respondents from 135 barangays across the three main group of islands—Luzon, Visayas, and Mindanao.  

Using a standard questionnaire developed to capture the community’s socio-economic conditions, respondents were asked to share their views on the situation in their communities. These results reflect the general observations of community leaders based on their perception and knowledge of their respective communities.  

Economic impact on communities  

COVID-19 has taken a heavy toll on rural livelihoods. Loss of income and job opportunities were overarching challenges in poor communities in the Philippines.     Disaster-prone communities experienced more difficulties in coping with COVID-19 restrictions and its severe economic impact. Results show the most pressing problems before and during COVID-19 were: 

  • Lack of income opportunities and reduction of pay were pre-existing challenges but had worsened significantly due to the pandemic.  
  • During the pandemic, communities reported continued insufficient food supply and health, sanitation, and nutrition issues.  

The economic impact of COVID-19 is particularly worrisome as the surveyed communities are already a subset of the poorest and most vulnerable communities in the Philippines. Following significant job and income losses, communities are at risk of further increases in poverty. 

In August 2020 , job losses were particularly severe in the construction sector (56%) and public transportation (52%) while cumulative job losses were seen among informal workers such as laundry women, hairdressers, and workers in small canteens; and in informal retail like “ sari-sari ” stores , street vendors, and markets. The farming sector also saw significant job losses reportedly in 70% of communities in formal agriculture and 61% in small-scale farming.  

The situation had somewhat improved by the second round of the survey in April 2021. The sector that saw the biggest improvements was retail, where reported incidence of job losses decreased by 13%. However, construction workers and public transport drivers continued to be most affected by job cuts (56% and 52% respectively). 

Social cohesion 

Seventy-four percent (74%) of communities did not observe any peace and order problems such as theft, crime, arguments, and community-level conflict because of COVID-19.  However, there was an increase in peace and order problems when the second round of the survey was carried out. This seemed to be mainly caused by loss of employment. While cases of COVID-related discrimination similarly increased, there was no increase in sexual harassment, rape, and domestic violence according to respondents. However, findings from an independent conflict monitoring system ( Conflict Alert ) covering a smaller area of the Philippines, the Bangsamoro Autonomous Region in Muslim Mindanao suggests there may be more vulnerable communities . The Conflict Alert data , based on police and media reports, reveals a significant increase in gender-based violence during the periods of strict COVID lockdown. 

Gender and women’s roles 

Half of the respondents found that women and men were equally affected by job and income losses, while 29% found that women were more affected. Women were also identified as one of the groups most in need of assistance because of COVID-19.  

Health and vaccine concerns 

In the Philippines, access to health care during the pandemic remained consistent, though a main challenge was the lack of medical supplies and PPEs, especially in the early phase. 

The survey finds that there was significant concern about vaccine safety (86%) and effectiveness (60%). Vaccine hesitancy was hampering the rollout of the vaccines in the country. Communities mainly trust doctors and health practitioners for information on vaccines. Though the respondents knew vaccines could prevent COVID-19, they were aware that health and risk mitigation protocols were still needed. While respondents generally found the government-issued rules and restrictions appropriate, they suggested that local governments should be more stringent and consistent in the enforcement of these health-related protocols. Vaccine hesitancy continues to be a challenge in the Philippines, and further analysis is being initiated to identify key incentives and constructive messaging. 

The results of the community survey, along with the firm and household surveys, were shared with the Philippine government and other stakeholders. Future rounds will strengthen the validity of results and will provide an opportunity for focusing on additional sub-themes, including gender and coping strategies, or new themes that emerge as relevant.  

The survey clearly highlights how poor and vulnerable rural communities are affected by the economic impacts of COVID-19. Going forward, we hope that the valuable insights into the situation and perceptions of the communities can help inform target policies as well as response and recovery programs.    

Learn more about the surveys monitoring COVID-19 impacts on families and firms in the Philippines: http://www.worldbank.org/philippines/covidmonitor  

Through additional financing for the Kalahi-CIDSS National Community Driven Development Project , the World Bank is supporting early recovery of rural poor communities from the pandemic. The Philippine government will undertake community-driven development projects that promote inclusive service provision and support economic recovery, such as cash-for-work programs and local economic development activities using the project’s Disaster Risk Operations Modality.  

  • Philippines
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Ditte Fallesen's picture

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Thinkwell

Reflecting on Life in the Philippines During the Pandemic

18 March 2021

A year after the Covid-19 crisis really took hold in the Philippines, we sat down with Technical Advisor Helena Alvior, who supports ThinkWell’s  Strategic Purchasing for Primary Health Care  project, to chat about what life has been like for her and other Filipinos over the past 12 months.

How has life changed over the past year for you and for most Filipinos?

I wouldn’t compare my experience to the experience of most Filipinos. The pandemic has been much harder for less fortunate people. When the lockdown first happened, malls were closed so people who had entrepreneurial micro-businesses were very affected. Another challenge for people who still had to commute for work was that since public transportation ridership decreased, the fares were increased.

I have three boys, ages seven, five, and one. When school was canceled, they had to stay home. So that was hard because I was working virtually and trying to keep them quiet and look out for them. It was a big help to have husband and family here, but still it was difficult to not have a boundary between work hours and family hours. But for most Filipinos it’s been more difficult than it’s been for me.

What has been the greatest health systems challenge that the Philippines has faced in the past year while fighting Covid?

Before Covid, our health system was fragmented because of devolution. The health system issues have become even more glaring during Covid. Before the pandemic started, the Universal Health Care (UHC) law was passed so there was health system support buy-in from stakeholders, health leaders, and government. Because of that, officials were better prepared to implement Covid response actions because they had been discussing health system and UHC issues for a long time. The UHC preparations created more dialogue between actors at different levels of the health system. We’ve worked with health system leaders to show them how innovations they’ve implemented for the Covid response can be applied to addressing universal health care challenges.

A large challenge is that social media is a hotspot for misinformation. Everyone thinks they’re an expert in epidemiology and medicine! Misinformation has been a challenge in the face of disseminating accurate information about Covid. One of the largest problems is that misinformation around vaccines on social media contributes to vaccine hesitancy.

In terms of my experiences, a lot of my work for ThinkWell is grounded in strong inter-personal relationships and face-to-face conversations with Filipino health stakeholders. Filipinos aren’t used to working virtually because you normally have to sit down with someone if you want to get something done. That’s been a big challenge to overcome.

Has there been anything that’s inspired you during the pandemic in the Philippines?

In April, May, and June of last year, was a large community mobilization in Western Visayas, a region, to address pandemic needs at the community level. Science high schools created alcohol and distributed it across hospitals. Engineering schools mass produced face shields. Then there were a lot of food drives during lockdown.

Guimaras, an island province, that is world renowned for mangos has its harvest in the summer. Due to lockdowns and reduced global demand for mangos, there was a surplus of mangos, so the local economy was struggling. The local government lowered the prices for the mangos so neighboring provinces could afford to purchase mangos. Because of that, the mangos didn’t go to waste and the farmers got paid!

What does vaccine roll-out look like in the Philippines?

The global vaccine access inequities are quite sad. Philippines just received a donation of vaccine from China but we haven’t procured any yet. Vaccine preparations in the Philippines are ongoing. Filipinos have been surveyed on whether they would take a vaccine and about 60-70 percent of people are willing, but some don’t want vaccine from China. Of course, the best vaccine is the one that is available to you.

What has it meant for you to both be working on Covid-related issues and be directly impacted by the pandemic? In other words, how has your work on the pandemic affected how you experience the pandemic?

My team and I helped the Department of Health and other health stakeholders make sense of Covid data and communicate the data via policy notes. (Read more here .)

After the initial four months of strict lockdown, we picked back up our UHC work with provinces. We helped provincial health leaders see how the integration work they’ve done for the Covid response can be applied to UHC.

Some of my work involves meeting with health workers and people who work with health workers. So I’ve been worried about potentially getting Covid from my work and then transmitting it to my family. It’s nerve-wracking, the anxiety of potentially exposing people because of the nature of your work.

What is your personal biggest lesson learned from the past 12 months?

Before Covid, we took for granted the liberties that we have. We could travel freely and have meals wherever we wanted. With the lockdown, you get to see what the essentials things are in your life. I’m grateful to not be in metro Manila, the capital. I live in Iloilo City and I’m grateful to be in an area with nature, open spaces, and beaches nearby.

Finally, on a personal note, where do you want to travel to once it’s safe to travel? 

I haven’t been outside of the country before, so I want to travel internationally, perhaps on assignment for ThinkWell!

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The Philippines’ Response to the COVID-19 Pandemic: Learning from Experience and Emerging Stronger to Future Shocks

  • Celia M. Reyes
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The coronavirus disease 2019 (COVID-19) pandemic hit the Philippine economy and society unprecedentedly. To protect the people, the government had to act decisively and identify solutions to contain the rapid spread of the virus and the devastating economic and social disruption caused by the pandemic.  This book compiles papers assessing the strategies, policies, and recovery efforts that the government had implemented during the first year of the COVID-19 pandemic. It discusses the challenges that the country had experienced and the government's responses in the areas of health, macroeconomy, food security, labor, social protection, poverty, education, digitalization, fiscal policy, and crisis and risk communication. Learning from these experiences, this book provides recommendations to help the Philippines recover from the current crisis and build better resilience to future shocks.

This publication has been cited 4 times

  • Alviar, DC. 2023. Sapat ba ang teknolohiya upang epektibong magturo? Mga aral mula sa PIDS . Tutubi News Magazine.
  • Daily Guardian . 2024. COVID-19 school closures led to significant learning losses – expert . DailyGuardian .
  • Manila Standard Business. 2023. PIDS: Technology key to learning amid crises . Manila Standard.
  • Nazario, Dhel. 2023. NAST PHL set to introduce new members, recognize outstanding Filipino scientists . Manila Bulletin.

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COVID-19 in the Philippines – at a Glance

  • Marjorie Pajaron

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This is the third installment in our series, “Stories in a Time of Pandemic,” in which APARC alumni across Asia share their perspectives on the responses to and implications of COVID-19 in their communities. In part 1 and part 2 of the series, we feature observations from our alumni in China, Mongolia, Myanmar, and Singapore.

The first case of COVID-19 in the Philippines was reported on January 30, 2020, and local transmission was confirmed on March 7, 2020. As of May 21, the number of cases of COVID-19 has risen to 13,434 and the number of deaths attributed to the virus increased to 846, according to the Philippine Department of Health COVID-19 Case Tracker . It is quite alarming that among the ASEAN countries, the Philippines had the second-highest mortality due to COVID-19, next to Indonesia (as per May 5 date by the WHO COVID-19 Dashboard ). This could be attributed to several factors, including whether the country’s health system can handle the overwhelming demand for health care due to the COVID-19 crisis and how effective the government’s response is in stemming the spread of this new pathogen. Inherent in the death statistics is the capacity of a country to conduct COVID-19 tests, which means that there should be a sufficient number of test kits available and that the health workers are properly trained to conduct the tests, trace the contacts, and isolate identified individuals.

The President of the Philippines imposed a total lockdown called enhanced community quarantine (ECQ) for the entire island of Luzon, which encompasses eight administrative regions, including the national capital region, from March 15 to April 30. Other parts of the country have also been under some degree of quarantine at different periods since the appearance of local transmission. Executive Order 112 , signed on April 30, 2020, was issued to further extend the ECQ in identified high-risk areas and a general community quarantine (GCQ) in the rest of the country. The inter-agency task force for the management of emerging infectious diseases defines ECQ as the implementation of temporary restrictions on the mobility of people, strict regulations of industries, and a heightened presence of uniformed personnel. GCQ is, in a nutshell, a less strict version of ECQ.

A table showing COVID-19 cases in Southeast Asian countries compared with U.S., China, and total global case count

The Philippines has faced a lot of challenges during this crisis. First, the health system lacks adequate surge capacity to safely handle a nationwide outbreak of COVID-19 due to shortages of personal protective equipment (PPE), mechanical ventilators, and hospitals with ICUs and isolation beds (see this World Bank report and this Rappler article ). More importantly, the insufficient number of health workers , especially in areas outside the metropolitan, is a major concern. Nonetheless, the Department of Health has worked hard to meet the surge in demand due to COVID-19, including partnering with the private sector to repurpose structures and providing data to the public to ensure transparency and accountability. As in other countries, the health workers and those with frontline responsibilities have truly been the new heroes or “bayani” with their tireless efforts and sacrifices. 

Another challenge pertains to the adverse economic impact of COVID-19. The Philippines has a relatively large informal sector and the income of many families depends on daily transactions with no formal job or social security. This has prompted the government to extend cash or in-kind support to vulnerable populations – a response that has posed several challenges, particularly related to the who/what/how framework. First, the Philippine government had to properly identify those in need (who). Second, it had to ensure that sufficient resources can be allocated to the identified groups (what). And third, it had to distribute aid in an efficient, timely, and equitable way (how). The government's social welfare efforts to provide for the vulnerable groups have mixed results: at times, the distribution of aid is organized and efficient, at other times insufficient and disorderly (see these CNN Philippines reports of April 7 and April 30 ).

COVID-19 in the Philippines – How Filipinos Have Coped

There has been a strong spirit of “bayanihan” or collectivism in the country amidst the COVID-19 crisis. People are volunteering, distributing goods to vulnerable groups, or donating PPE to those with frontline duties. Some enterprises also rose to the occasion by repurposing their businesses to meet the local demand for medical products and PPE.

Different individuals have coped differently: some have welcomed the work hiatus that the quarantine has afforded them, some connected more with friends and family, others become more productive working from home. Staying healthy and being mindful are also factors that contribute to remaining calm and rational in this time of national distress.

Despite the challenges, we will continue to face, especially once the quarantine has eased and the new normal is in effect, we can say that Filipinos have also learned some valuable lessons amid this crisis. For one, Filipinos have become more mindful of the importance of good sanitation and non-pharmaceutical public health measures in mitigating the transmission of the virus. Most Filipinos have also become more proactive in their approach, keeping social distance, wearing masks, and practicing proper handwashing, among others. Furthermore, this crisis has redefined and created new heroes who rose to the challenge – from those staying at home to avoid the further spread of the virus to those on the frontline who have dedicated their time and effort to combat the pandemic, to government and business leaders who have served the country sincerely during this crisis.

Perhaps there really is a silver lining in every cloud.

Lessons from Mongolia’s COVID-19 Containment Strategy

Stories in a time of pandemic: aparc alumni share their experiences.

The Philippine economy under the pandemic: From Asian tiger to sick man again?

Subscribe to the center for asia policy studies bulletin, ronald u. mendoza ronald u. mendoza dean and professor, ateneo school of government - ateneo de manila university.

August 2, 2021

In 2019, the Philippines was one of the fastest growing economies in the world. It finally shed its “sick man of Asia” reputation obtained during the economic collapse towards the end of the Ferdinand Marcos regime in the mid-1980s. After decades of painstaking reform — not to mention paying back debts incurred under the dictatorship — the country’s economic renaissance took root in the decade prior to the pandemic. Posting over 6 percent average annual growth between 2010 and 2019 (computed from the Philippine Statistics Authority data on GDP growth rates at constant 2018 prices), the Philippines was touted as the next Asian tiger economy .

That was prior to COVID-19.

The rude awakening from the pandemic was that a services- and remittances-led growth model doesn’t do too well in a global disease outbreak. The Philippines’ economic growth faltered in 2020 — entering negative territory for the first time since 1999 — and the country experienced one of the deepest contractions in the Association of Southeast Asian Nations (ASEAN) that year (Figure 1).

Figure 1: GDP growth for selected ASEAN countries

GDP growth for selected ASEAN countries

And while the government forecasts a slight rebound in 2021, some analysts are concerned over an uncertain and weak recovery, due to the country’s protracted lockdown and inability to shift to a more efficient containment strategy. The Philippines has relied instead on draconian mobility restrictions across large sections of the country’s key cities and growth hubs every time a COVID-19 surge threatens to overwhelm the country’s health system.

What went wrong?

How does one of the fastest growing economies in Asia falter? It would be too simplistic to blame this all on the pandemic.

First, the Philippines’ economic model itself appears more vulnerable to disease outbreak. It is built around the mobility of people, yet tourism, services, and remittances-fed growth are all vulnerable to pandemic-induced lockdowns and consumer confidence decline. International travel plunged, tourism came to a grinding halt, and domestic lockdowns and mobility restrictions crippled the retail sector, restaurants, and hospitality industry. Fortunately, the country’s business process outsourcing (BPO) sector is demonstrating some resilience — yet its main markets have been hit heavily by the pandemic, forcing the sector to rapidly upskill and adjust to emerging opportunities under the new normal.

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Second, pandemic handling was also problematic. Lockdown is useful if it buys a country time to strengthen health systems and test-trace-treat systems. These are the building blocks of more efficient containment of the disease. However, if a country fails to strengthen these systems, then it squanders the time that lockdown affords it. This seems to be the case for the Philippines, which made global headlines for implementing one of the world’s longest lockdowns during the pandemic, yet failed to flatten its COVID-19 curve.

At the time of writing, the Philippines is again headed for another hard lockdown and it is still trying to graduate to a more efficient containment strategy amidst rising concerns over the delta variant which has spread across Southeast Asia . It seems stuck with on-again, off-again lockdowns, which are severely damaging to the economy, and will likely create negative expectations for future COVID-19 surges (Figure 2).

Figure 2 clarifies how the Philippine government resorted to stricter lockdowns to temper each surge in COVID-19 in the country so far.

Figure 2: Community quarantine regimes during the COVID-19 pandemic, Philippine National Capital Region (NCR ), March 2020 to June 2021

Community quarantine regimes during the COVID-19 pandemic, Philippine National Capital Region (NCR), March 2020 to June 2021

If the delta variant and other possible variants are near-term threats, then the lack of efficient containment can be expected to force the country back to draconian mobility restrictions as a last resort. Meanwhile, only two months of social transfers ( ayuda ) were provided by the central government during 16 months of lockdown by mid-2021. All this puts more pressure on an already weary population reeling from deep recession, job displacement, and long-term risks on human development . Low social transfers support in the midst of joblessness and rising hunger is also likely to weaken compliance with mobility restriction policies.

Third, the Philippines suffered from delays in its vaccination rollout which was initially hobbled by implementation and supply issues, and later affected by lingering vaccine hesitancy . These are all likely to delay recovery in the Philippines.

By now there are many clear lessons both from the Philippine experience and from emerging international best practices. In order to mount a more successful economic recovery, the Philippines must address the following key policy issues:

  • Build a more efficient containment strategy particularly against the threat of possible new variants principally by strengthening the test-trace-treat system. Based on lessons from other countries, test-trace-treat systems usually also involve comprehensive mass-testing strategies to better inform both the public and private sectors on the true state of infections among the population. In addition, integrated mobility databases (not fragmented city-based ones) also capacitate more effective and timely tracing. This kind of detailed and timely data allows for government and the private sector to better coordinate on nuanced containment strategies that target areas and communities that need help due to outbreak risk. And unlike a generalized lockdown, this targeted and data-informed strategy could allow other parts of the economy to remain more open than otherwise.
  • Strengthen the sufficiency and transparency of direct social protection in order to give immediate relief to poor and low-income households already severely impacted by the mishandling of the pandemic. This requires a rebalancing of the budget in favor of education, health, and social protection spending, in lieu of an over-emphasis on build-build-build infrastructure projects. This is also an opportunity to enhance the social protection system to create a safety net and concurrent database that covers not just the poor but also the vulnerable low- and lower-middle- income population. The chief concern here would be to introduce social protection innovations that prevent middle income Filipinos from sliding into poverty during a pandemic or other crisis.
  • Ramp-up vaccination to cover at least 70 percent of the population as soon as possible, and enlist the further support of the private sector and civil society in order to keep improving vaccine rollout. An effective communications campaign needs to be launched to counteract vaccine hesitancy, building on trustworthy institutions (like academia, the Catholic Church, civil society and certain private sector partners) in order to better protect the population against the threat of delta or another variant affecting the Philippines. It will also help if parts of government could stop the politically-motivated fearmongering on vaccines, as had occurred with the dengue fever vaccine, Dengvaxia, which continues to sow doubts and fears among parts of the population .
  • Create a build-back-better strategy anchored on universal and inclusive healthcare. Among other things, such a strategy should a) acknowledge the critically important role of the private sector and civil society in pandemic response and healthcare sector cooperation, and b) underpin pandemic response around lasting investments in institutions and technology that enhance contact tracing (e-platforms), testing (labs), and universal healthcare with lower out-of-pocket costs and higher inclusivity. The latter requires a more inclusive, well-funded, and better-governed health insurance system.

As much of ASEAN reels from the spread of the delta variant, it is critical that the Philippines takes these steps to help allay concerns over the country’s preparedness to handle new variants emerging, while also recalibrating expectations in favor of resuscitating its economy. Only then can the Philippines avoid becoming the sick man of Asia again, and return to the rapid and steady growth of the pre-pandemic decade.

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Adrien Chorn provided editing assistance on this piece. The author thanks Jurel Yap and Kier J. Ballar for their research assistance. All views expressed herein are the author’s and do not necessarily reflect the views and policies of his institution.

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100 days of COVID-19 in the Philippines: How WHO supported the Philippine response

Exactly 100 days have passed since the first confirmed COVID-19 case was announced in the Philippines on 30 January 2020, with a 38-year old female from Wuhan testing positive for the novel coronavirus. On the same day, on the other side of the world at the WHO headquarters in Geneva, WHO activated the highest level of alert by declaring COVID-19 as a public health emergency of international concern. The Philippine government mounted a multi-sectoral response to the COVID-19, through the Interagency Task Force (IATF) on Emerging Infectious Diseases chaired by the Department of Health (DOH). Through the National Action Plan (NAP) on COVID-19, the government aims to contain the spread of COVID-19 and mitigate its socioeconomic impacts. The Philippines implemented various actions including a community quarantine in Metro Manila which expanded to Luzon as well as other parts of the country; expanded its testing capacity from one national reference laboratory with the Research Institute of Tropical Medicine (RITM) to 23 licensed testing labs across the country; worked towards ensuring that its health care system can handle surge capacity, including for financing of services and management of cases needing isolation, quarantine and hospitalization; and addressed the social and economic impact to the community including by providing social amelioration to low income families. The World Health Organization (WHO) has been working with Ministries of Health worldwide to prepare and respond to COVID-19. In the Philippines, WHO country office in the Philippines and its partners have been working with the Department of Health and subnational authorities to respond to the pandemic. The country level response is done with support from the WHO regional office and headquarters.

Surveillance

Surveillance is a critical component and is used to detect cases of COVID-19 as well as to understand the disease dynamics and trends and identify hotspots of disease transmission. The Department of Health included COVID-19 in the list of nationally notifiable diseases early in the outbreak to ensure that information was being collected to guide appropriate response actions. Existing surveillance systems were capitalized upon to speed up identification of cases as well as identify unusual clusters. Laboratory confirmation is a critical component of the surveillance system but cannot be the only sources of information. The non-specific symptoms and the novel nature of the disease means that the DOH, with support from WHO, are looking at all available information sources to guide response decision making. WHO also provided technical assistance to selected local government units to strengthen field surveillance for timely data for action at the local level.

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Risk communication and community engagement

Effective communication and engagement with communities is essential for people to understand the situation, know the situation and practice protective measures to protect their health, their family and the larger community. WHO supported and amplified DOH messaging by releasing various communication materials on the risk of COVID-19 and how people can protect themselves through social media and traditional media. WHO also worked with partners such as UNICEF and OCHA in reaching vulnerable groups, getting their feedback and understanding their information needs.

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Logistics support

With lots of moving equipment and supplies required for COVID-19, logistics support is an important part of the response. WHO provided technical support to the DOH in the recalibration of PPE requirements by using WHO projection tools, provided cost estimates, and advised on streamlining the distribution flow of PPEs and other essential supplies. WHO also supported DOH in the development of a commodities dashboard that provides real-time PPE stocks at the facility level, as well as assisted in building an information system for tracking essential COVID-19 commodities.

Commodities Dashboard_1

Subnational operations support

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Responding to outbreaks in high risk areas

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Moving forward with the response

Much more needs to be done to break the chain of COVID-19 transmission. Some of the challenges that the Philippines continues to face are containing transmission of infection, mitigating the impact in high risks communities and confined settings, as well as ensuring the uniform enforcement of non-pharmaceutical interventions that are already in place. The continuation of the community quarantine will have substantial social and economic impact and thus a heightened effort to control  transmission of infections through rigorous contact tracing, isolation of cases, quarantine of contacts while ensuring timely and adequate treatment to save lives will continue to be the primary public health measure. In addition, while the government is exerting all its efforts in this current situation, it also needs to prepare its health systems for surge capacity in the event that a wide-scale community transmission occurs.

In the next few days, the government will carefully consider the next steps, especially on deciding whether or not the communty quarantine will be lifted or levels of quarantine will be differentiated based on the situation of provinces. WHO strongly recommends that when the government considers adjusting public health and social measures in the context of COVID-19 the following requirements must be in place:

  • COVID-19 transmission is controlled through two complementary approaches – breaking chains of transmission by detecting, isolating, testing and treating cases and quarantining contacts and monitoring hot spots of disease circulation
  • Sufficient public health workforce and health system capacities are in place
  • Outbreak risks in high-vulnerability settings are minimized
  • Preventive measures are established in workplaces
  • Capacity to manage the risk of exporting and importing cases from communities with high risks of transmission
  • Communities are fully engaged
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Navigating a Challenging Recovery in the Philippines (Philippines Economic Update June 2021)

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STORY HIGHLIGHTS

  • The resurgence of COVID 19 cases and the reimposition of stringent quarantine measures held back early signs of an economic rebound.
  • The economy is expected to recover over the forecast horizon, but there are significant downside risks.
  • The key policy challenges are to manage the pandemic, effectively deliver social protection, and mobilize private sector participation in the recovery.

Recent Economic and Policy Developments

  • The economy remained in recession, contracting by 4.2% year-on-year in the first quarter of 2021. The growth contraction was fueled by weak domestic demand, driven by the combination of containment measures, weak confidence, and rising inflation.
  • Meanwhile, tepid external demand was driven by the sharp contraction in services exports amid lingering restrictions and weak demand for international tourism while goods exports recovered.
  • The public sector was the main driver of growth with an expansionary budget.
  • The impact of the recession is broad-based, affecting all sectors, i.e. industry, construction, manufacturing, services, trade, transportation, accommodation and food services.
  • The Central Bank of the Philippines (Bangko Sentral ng Pilipinas) maintained its key policy rate at 2.0% throughout the first four months of 2021 to support the economic recovery.
  • The authorities also accelerated public spending. Stimulus spending and infrastructure investment drove public spending from 19.1% of GDP in the first quarter of 2020 to 23.4% of GDP in the same period in 2021.
  • The unemployment rate decreased to 7.1% in March 2021 after remaining steady at 8.7-8.8% in the past five months.

Outlook and Risks

  • The growth prospects hinge on the country’s ability to manage the COVID-19 health crisis.
  • The economy is projected to expand at 4.7% in 2021, before accelerating to 5.9% in 2022 and 6.0% in 2023. The economic recovery will contribute to renewed progress in poverty reduction.
  • A resurgence of infection due to the entry of new virus variants is the most significant risk, which may yet overwhelm the healthcare system.
  • Ineffectively containing the virus or implementing the mass vaccination program may extend mobility restrictions, which could lead to further job and income losses, disrupt businesses, and delay economic recovery.
  • External risks include a slower-than-expected global recovery, disruptions in international logistics and global value chains, and trade protectionism.

Policy Recommendations

  • The key health policy response remains the management of the virus and roll out of the vaccination program.
  • Effectively delivering social protection programs will help reduce the extent to which the crisis adversely affects long term human capital accumulation.
  • Mobilizing greater private sector participation in public infrastructure projects will be important as the government faces limited fiscal space in the short term.
  • Relaxing restrictions on FDI is expected to boost the economic recovery.

Special Focus on Subnational Finance

Local governments have played a crucial role at the front lines of the COVID crisis. A current lack of resources prevents local government units (LGUs) from fulfilling their devolved mandates.

  • The Mandanas Ruling that will be implemented in 2022 is the first step towards strengthening decentralization and improving local service delivery.
  • Large disparities in LGUs’ financial resources have led to persistent inequalities across LGUs.
  • Implementation challenges can be addressed successfully through improved coordination and strategic planning and budgeting.
  • Addressing the structural challenges of decentralization requires a long-term investment in designing institutional arrangements that will ensure the success of decentralization.
  • Clearly define, communicate, and coordinate the re devolution of functions.
  • Minimize inefficient allocation of LGU budgets by focusing on implementation ready programs and projects.
  • Support capacity building in local government units.
  • Reduce inequality by re devolving gradually and targeting national government support toward disadvantaged LGUs.
  • Strengthen systems of monitoring and evaluation within government.
  • Amend the Local Government Code to address fundamental challenges towards effective service delivery.
  • Strengthen demand for transparency and accountability.

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June 10, 2021 Report Launch Replay

  • [FULL REPORT] Philippines Economic Update June 2021: Navigating a Challenging Recovery
  • [PRESS RELEASE] Manila, June 10, 2021-Mandanas Ruling Provides Opportunities for Improving Service Delivery Through Enhanced Decentralization
  • [SLIDE PRESENTATION] Mandanas Ruling: An Opportunity for Effective Decentralization
  • [SLIDE PRESENTATION] Philippines Economic Update June 2021: Navigating a Challenging Recovery
  • Get past issues of the Philippines Economic Update

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Philippines

Filipinos and nationalism during the covid-19 pandemic, filipinos helping fellow filipinos.

#ProtectTheFrontliners

As COVID-19 strikes the Philippine nation, people rise together to counter it. At the forefront of the fight against the virus are our healthcare workers and various frontliners. Daily, they face the hazard of infection with their mantra: “We go to work for you. Please stay at home for us.”

Healthcare workers who directly work with COVID-positive patients are outnumbered; and due to their first-hand exposure, some staff require quarantine themselves - reducing their numbers. Another big challenge for frontliners is the lack of medical supplies including Personal Protective Equipment (PPEs).

Community quarantine and social distancing has not hindered our kababayans in looking for ways to help with the battle. Different groups, individuals, classmates, colleagues - groups big and small - have come together, despite limited resources and movement. Showing everyone that we are all #InThisTogether.

Asia 21 Young Leaders , Darwin Mariano and Harvey Keh , used their platform, Ticket2Me – The Kaya Natin! Movement in coordination with the Office of the Vice President to help raise funds in order to purchase PPEs, other medical supplies, and care/food packs needed by our health workers and frontliners.

“Each PPE Daily Set Ticket consists of one N95 mask, one gown, two sets of gloves, two pieces of head covers, two sets of shoe covers and one pair of goggles. This is only good for one (1) health worker. Each Food and Care Pack Ticket will help one health worker/frontliner per day. All donors will receive an electronic ticket from our ticketing platform as proof of donation to the Kaya Natin! Movement. Ticket2Me has waived its service fees for this campaign but third-party payment gateway service fees will apply. These service fees are charged by the system's various payment partners including: the credit card processing bank, PayPal, GCash, 7-Eleven, MLhuillier, Cebuana Lhuillier or ECPay. To observe social distancing, online donations are coursed through our #AngatBuhay partner Kaya Natin!”

As of March 24, 2020, The Kaya Natin! Movement has reached PhP28,868,752.79 and have already distributed 23,475 daily sets of PPEs to 1,565 workers.

Ticket2Me is not the only platform and group reaching out to help our frontliners and our most at risk. Netizens have come together to compile organizations seeking donations and assistance through a collaborative spreadsheet HOW TO HELP OUT DURING COVID-19 CRISIS. The list includes drives for frontliners, our affected daily wage earners, homes for the elderly, and our most at risk.

Here are some of the organizations (catering to frontliners) you can donate to:

1. Tulong Kabataan – UP Manila

- What they need: Asking for masks and alcohol

- Who are they helping: patients, healthworkers, and interns of Philippine General Hospital

- Contact Details: +639082111437

2. Philippine General Hospital

- What they need: Personal Protective Equipment (n95 mask, surgical mask, face shield, surgical gowns) 70% Ethyl Alcohol

- Who are they helping: Frontliners (Healthcare Workers)

- Contact Details: Dr. Mia Tabuñar (Coordinator for Resource Generation) 09193506917

3. Ospital ng Muntinlupa

- What they need: Asking for N95 masks, face shields, 70% Ethyl Alcohol, surgical gown, clean/sterile gloves

- Contact Details: Dr. Edwin Dimatatac - 09176294301

4. Philippine Association of Medical Technologists, Inc. (PAMET)

- Contact Details: PAMET Secretariat -  (02) 8817-1487  / 09178901118

5. National Children’s Hospital (NCH)

- What they need: PPE, N95 masks, face shields, 70% Ethyl Alcohol, surgical gown, clean/sterile gloves

- Who are they helping: Frontline government workers and healthworkers

- Contact Details: Dr. Jennifer Gianan, Chief Resident - National Children's Hospital 09176392278 or at 264 E. Rodriguez Ave., New Manila, QC Swift Code - BOPIPHMM

6.  #ProtectTheFrontline

- What they need : Asking for Surgical masks, surgical gloves, surgical caps, PPE set, N95 masks, protective goggles, plastic boots, plastic aprons, disposable gowns, face shields, scrub suit, alcohol, soap, food, hazmat suits

- Who they are helping: Frontliners

We salute all the people who are trying their best to fight this crisis for fellow Filipinos. There are many ways to support our frontliners and each other during this time. However, one of the best ways to help them is by KEEPING HEALTHY and STAYING AT HOME . 

#ProtectTheFrontline

We are here and we are #InThisTogether.

The Kaya Natin! Movement

If interested in donating click here  for more details

You can also contact them at [email protected] or +639985968820

How to Help Out During Covid-19 Crisis

If interested in sharing information or donating to organizations – click here  for more details

To show your appreciation for our medical frontliners, click here  for more details

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Journalism, public health, and COVID-19: some preliminary insights from the Philippines

In this essay, we engage with the call for Extraordinary Issue: Coronavirus, Crisis and Communication. Situated in the Philippines, we reflect on how COVID-19 has made visible the often-overlooked relationship between journalism and public health. In covering the pandemic, journalists struggle with the shrinking space for press freedom and limited access to information as they also grapple with threats to their physical and mental well-being. Digital media enable journalists to report even in quarantine, but new challenges such as the wide circulation of health mis-/disinformation and private information emerge. Moreover, journalists have to contend with broader structural contexts of shutdown not just of a mainstream broadcast but also of community newspapers serving as critical sources of pandemic-related information. Overall, we hope this essay broadens the dialogue among journalists, policymakers, and healthcare professionals to improve the delivery of public health services and advance health reporting.

Introduction

In this essay, we reflect on how COVID-19 has brought to our attention the often-overlooked relationship between journalism and public health. We draw initial insights from critical analysis of media and public health ( Henderson and Hilton, 2018 ) to suggest that health reporting in the country during the pandemic can be connected to journalistic practices, technological changes, and structural constraints. For journalism to advance public health, it needs to contend with the pandemic and the context into which it is uniquely situated – both of which are moving targets and difficult to predict. In this essay, we pay attention to the Philippines not just because it has one of the highest COVID 19-related cases and deaths in the world but also because the country is at the crossroads of changes in digital media and shrinking space for media freedom, as evidenced by the shutdown of the country’s biggest media network, closing or suspension of community newspapers, and passage of laws that may restrict free speech. In doing so, we hope to broaden dialogue among journalists, policymakers, and healthcare professionals to improve the delivery of public health services as well as advance health reporting.

Similar to other countries, the public health system in the Philippines was unprepared for and overburdened by COVID-19. The first case was reported on January 30 when a Chinese woman reached the country from Wuhan, China, and then a few days later her male companion died of the virus – making it the first recorded death outside of China ( Department of Health (DOH), 2020b ; Ramzy and May, 2020 ; World Health Organization (WHO), 2020a ). By March 7, the first case of local transmission was confirmed ( DOH, 2020a ; WHO, 2020a ). To date, there are 112,593 confirmed cases, 6,263 new cases, and 2,115 deaths in the country ( WHO, 2020b ) – making the Philippines as one of the most highly impacted in Southeast Asia and the Western Pacific Region. Equally alarming is the number of doctors, nurses, and other hospital staff who get infected and die of COVID-19 ( CNN Philippines, 2020a ; McCarthy, 2020 ). Recently, professional medical and allied medical associations have called for a unified and calibrated response and temporary quarantine of the country’s capital to avoid a total collapse of the healthcare system ( Batnag, 2020 ). Critical but seldom discussed are the challenges of journalism in making sense of the rapid spread and devastating impact of COVID-19 in the Philippines and how the pandemic is also gradually transforming journalism in the country.

Journalism and public health work together to broaden health information sources, facilitate public understanding of health, and mobilize support for or against public health policy ( Henderson and Hilton, 2018 ; Larsson et al., 2003 ; Vercellesi et al., 2010 ) and this relationship is magnified during pandemics. The relationship between journalism and public health has mostly been explained based on journalistic roles and news framing. During the 2009 H1N1, for instance, Klemm et al. (2017) found that journalists shifted from ‘watchdogs’ to ‘cooperative’ roles. Holland et al. (2014) further argued that the 2009 H1N1 enabled journalists to be reflexive of their roles especially with conflicts of interest among experts and decision makers. News framing has likewise informed the conversations between journalism and public health. For example, Krishnatray and Gadekar (2014) found that fear and panic dominated the frames used by journalists in their news stories about the 2009 H1N1. In this essay, we hope to engage with ongoing discussion about journalism and public health by reflecting on how health reporting during COVID-19 in the Philippines relates to broader, emergent, and interconnected issues of journalistic practices, technological changes, and structural constraints in the country.

Reporting from home

COVID-19, along with the ensuing quarantines, poses challenges to existing journalistic practices that typically require fieldwork, but it also encourages journalists in the Philippines to reimagine news production. We observe that access to information has generally been limited because government offices have not been in full operation while virtual press briefings do not allow for a more open discussion between journalists and officials. To illustrate, Ilagan (2020) reported that most routine requests for information have not been processed since March 2020 when government offices were wholly or partly closed due to the ongoing quarantine. The Philippines is among many governments in the world that had to suspend the processing of freedom-of-information (FOI) requests because of the pandemic ( McIntosh, 2020 ). FOI officers working from home could not address requests because they lacked Internet connection, laptop computers, and scanners, including digital copies of files. They also found it difficult to coordinate remotely with record custodians. While some national agencies have been proactive in providing information on COVID-19, the same cannot be said for many local government units. Ilagan (2020) further noted that ‘[un]like frontline agencies at the national level, local governments do not proactively publish data on their websites’. Information about plans to combat the impact of the virus are usually available, but more prodding is needed to find out how these plans are being implemented and funded. Camus (2020) also reported that journalists were prohibited from covering what is happening in hospitals and other high-risk areas. More and more press briefings have thus taken place online, but reporters have found it harder to demand answers because officials and their staff often screen questions. For instance, Camus (2020) wrote that some questions from journalists were ignored while official reports from the government were consistently discussed.

Moreover, we observe that the pandemic has taken a toll on both the physical and mental well-being of journalists. Reported cases of journalists experiencing high levels of stress, undergoing self-quarantines, and at least one news anchor contracting the virus point to the need for broader safety measures at the organizational level of news outlets. The National Union of Journalists of the Philippines (NUJP) lamented the limited mental health support for journalists by saying that ‘there are hardly any readily available and sustained support systems for colleagues experiencing mental health issues’ ( Adel, 2020 ). Safeguarding the physical and psychological well-being of journalists during pandemics or any type of crisis does not rest on individuals alone but should be demanded from news organizations and advocated for by professional associations. Yet some journalists have been able to navigate the consequences of COVID-19 on the profession by reimagining newsgathering, taking advantage of online resources as well as doing collaborations.

First, journalists have been coping with the challenge of limited access to information by interviewing sources through phones and attending webinars with experts to learn more about the pandemic ( Tantuco, 2020 ). Bolledo (2020) said that journalists had to adapt in light of the global health crisis changing media operations. By adapting, he referred to Reuters’ approaches to comprehensive newsgathering, which focus on open-source and non-mainstream techniques such as ‘citizen and collaborative journalism’ and ‘social journalism’. In practice, this set of methods includes monitoring Facebook and Twitter feeds, joining Facebook groups created for a specific cause or geographical area, following hashtags and using keywording to find leads and sources. Bolledo (2020) also emphasized the need to fact-check information gathered using these methods, highlighting the importance of news values and the 5Ws and one H in reporting. Second, to address the barriers in online press briefings, journalists organized themselves to raise their unanswered questions in media group chats of government organizations ( Ilagan, 2020 ). Third, the NUJP organized peer support networks critical for minimizing stress and trauma among journalists who reported about and during COVID-19. Finally, in an effort to prevent contracting and spreading the virus among co-workers, journalists are maintaining records of their activities and a list of sources whom they interacted for purposes of contact tracing ( Camus, 2020 ). The new methods employed in health reporting, as creative responses to the constraints brought upon by COVID-19, partly illustrate how an emerging practice may turn into professional norm ( Henderson and Hilton, 2018 ) in health reporting during pandemic.

Double-edged sword

At the onset of COVID-19, journalism in the Philippines has struggled with ongoing technological changes that bring about double-edged consequences. On one hand, digital media has enabled journalists to help Filipinos make better sense of the pandemic – from reporting infections and deaths regularly to covering press conferences organized by agencies at the frontlines of COVID-19 response. Through Facebook live videos, Zoom , and other video conferencing applications, journalists are able to talk about their lived experiences in covering COVID-19. Various groups inside and outside of the Philippines have been hosting a series of webinars on how to cover the pandemic. Media groups in the Philippines meanwhile have also organized press briefings that tackle the state of news reporting in the country. In the forum titled ‘Intrepid Journalism in the Time of Corona’ organized by This Side Up Manila , two journalists discussed the state of news from the early stages of the pandemic to the declaration of enhanced community quarantine (ECQ). Early in the live video, they shared their frustrations about the consequences of COVID-19 on fieldwork and storytelling. According to the reporters, covering COVID-19 is different from reporting about natural disasters or conflict zones because they felt that there was no end in sight to the pandemic. As a result, they reminded themselves and their colleagues to find a balance and slow down as the pandemic may be prolonged and even put the lives of their families at risk. These webinars, which are in theory accessible to anyone in the world, also allow journalists to share their experiences with and learn from their counterparts in other countries. For instance, Hivos organized a webinar titled ‘Data Driven Reporting During Covid-19’ with journalists from the Philippines, Kenya, and Mexico to find out how they have been affected by and coping with the pandemic. The journalists said they have found collaboration or working with other journalists and members of the academe and civil society as key in reporting when fieldwork is not possible. Like the Philippines, too, Kenya and Mexico also experience barriers in accessing and reporting information while their governments too are also mandating policies that could restrict press freedom ( Hivos, 2020 ).

On the other hand, digital media has complicated the work of journalists as they had to deal with the spread of health mis- and/or disinformation. To partly explain the diffusion of online fake news (e.g. mass testing and vaccines), we engage with Tandoc et al. (2018) who emphasized the characteristics of technology and the role of audiences. For instance, social media made it challenging for journalists to delineate information sources from each other, especially given the evolving science of COVID-19. Because science is evolving, journalists tend to rely heavily on expert opinion, without verifying the experts’ assumptions. Correcting mis- and/ or disinformation about the pandemic was likewise difficult because journalists had limited understanding of what counted as fake news among Filipinos. Another problem that journalists had to contend with while working during the pandemic is the recent ‘data breach’ that used Facebook profiles of real people ( Robles et al., 2020 ). The rise of fake Facebook accounts is counterproductive not just to fight against health mis- and/or disinformation but also places the identities of journalists at risk. To a large extent, the proliferation of health mis- and/ or disinformation is inextricably connected to the social context not just of COVID-19 but also the Philippines. As Tandoc et al. (2018) pointed out, ‘fake news needs the nourishment of troubled times in order to take root. Social tumult and divisions facilitate our willingness to believe news that confirms our enmity toward another group’ (p. 149). While it created new issues, COVID-19 has also reinforced existing problems in the country and one of those is the shrinking space for free speech.

Shutdowns, suspensions, and shrinking spaces

The pandemic is also laying bare pre-existing conditions hounding the Philippine press in a supposed democracy. For instance, the government passed ‘The Bayanihan to Heal as One Act’ (Republic Act No. 11469) to give the president emergency powers that would enable him to quickly respond to COVID-19. Human rights and media advocates criticized this law as it included a provision penalizing ‘fake news’, which can easily be used and abused by those in power to file complaints against individuals, including journalists ( Freedom for Media, Freedom for All Network, 2020 ). Again this posed another challenge to journalists and the audience who both use social media as a means to get and share information. In similar vein, the passage of the ‘ Anti-Terrorism Act of 2020 ’ (Republic Act No. 11479) received pushback for its broad provisions. Human rights groups also say that the law has essentially also criminalized intent, which could send a chilling effect especially among journalists who might be working on stories critical of the government.

On 5 May 2020, ABS-CBN, the country’s largest media network, went off-air after its broadcast franchise expired. The House of Representatives, which oversees the granting of franchises, refused ABS-CBN’s bid for a renewal, which ultimately led the media giant to close its broadcast operations and lay off thousands of employees. This development comes after the conviction of Rappler executive editor Maria Ressa and former researcher-writer Reynaldo Santos Jr for supposedly violating the Cybercrime Prevention Act of 2012 (Republic Act No. 10175). The shutdown is seen as the latest in a series of attacks and threats against news organizations deemed as critical of the current administration ( Gutierrez, 2020 ; Pago, 2020 ). Community journalism is neither spared. At least half of some 60 community newspapers have suspended or ceased printing due to economic losses caused by the quarantine, according to estimates from the Philippine Press Institute, the national association of newspapers. The NUJP also raised economic difficulties confronting many freelance journalists, especially those who work on contract in broadcast, since the start of the lockdown. Suspension of operations means that contractual media workers would not be able to earn because work is not available. The halt in the production of news by ABS-CBN and various papers across the archipelago means that people, especially those in far-flung areas, have fewer sources of news at a time when getting information is most crucial. Again, these developments point to how pandemic reportage may be tied to political landscape in the country ( Henderson and Hilton, 2018 ).

COVID-19 is transforming the practice and business of journalism. On one hand, the pandemic and the ensuing quarantine restrictions have prompted news organizations and journalists to adapt and take advantage of digital media to continue gathering and presenting news. On the other hand, the pandemic has also exposed journalists and audiences alike to further mis- and/ or disinformation as well as to government’s new efforts to stamp out ‘fake news’. These developments run in parallel with threats to press freedom and journalist safety. In a pandemic, journalists are not mere observers or mere reporters as they also face the same risks everyone else is exposed to ( CNN Philippines, 2020b ). By laying out the current media environment in this essay, we hope to expand and deepen the conversation between and among journalists, policymakers, and healthcare professionals about public health reporting. In line with Larsson et al. (2003) , we encourage further conversations between journalists and healthcare professionals to collectively identify gaps in health reporting and broaden understanding of ‘fake news’ and how it thrives in social media. Consistent with Tandoc et al. (2018) , we also recommend that journalists and healthcare professionals listen to their audience to help understand what counts as health-related ‘fake news’ for them. Moreover, we invite policymakers to protect democratic spaces that enable journalists, healthcare professionals, and citizens alike to gather and share information related to COVID-19. At a time when disseminating reliable information and holding the powerful to account have never been more critical, we deem it necessary to understand where journalists are coming from to understand both the long-standing and emerging issues they have to grapple with in a pandemic.

Authors’ note: The views provided in this essay do not represent the official views of the authors’ institutional affiliations.

Funding: The author(s) received no financial support for the research, authorship, and/or publication of this article.

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A new vision for the Philippine economy after Covid-19

The Philippines | Economy

The Philippines is one of the fastest-growing economies of the past decade, averaging 6.4% growth per year in 2010-19. Indeed, an expanding and youthful population, combined with reforms and an ambitious infrastructure programme, have made it an enticing investment destination. Nevertheless, as is often the case in emerging markets, challenges regarding inequality – particularly the distribution of wealth and services – remain barriers to growth. The Covid-19 pandemic tested the country’s resilience in 2020, impacting major sectors. However, the government mobilised to support vulnerable industries with two major stimulus bills, which aim to create jobs and sustain growth into 2021.

The Philippines has shifted from an agricultural to a broadly services-focused economy. According to the central bank, Bangko Sentral ng Pilipinas (BSP), in 2019 agriculture, forestry and fisheries made up 9.2% of GDP, behind industry (30.2%) and services (60.6%). Services overtook industry as the leading contributor to GDP in the 1980s and accounted for almost 60% of total employment by 2019 – highlighting the growing importance of IT-business process outsourcing (IT-BPO). In addition to IT-BPO, export services, including those delivered by overseas Filipino workers (OFWs), play a significant role. Remittances from OFWs reached a record $33.5bn in 2019, representing 9.3% of GDP.

Industry accounted for 19.1% of workers in 2019 and is centred around manufacturing and agri-business. The development of a number of special economic zones should help bolster industrial growth in the years to come. The agriculture sector, which has shrunk considerably since 1980, has nevertheless been highlighted as a strategic sector for economic recovery amid Covid-19: the government identified food security as a primary concern. The sector employed 22.9% of workers in 2019, and its main products include rice, coconuts, maize, sugarcane, bananas, pineapples and mangoes.

Government Oversight

The Philippines’ primary socio-economic and policy planning body is the National Economic and Development Authority (NEDA). President Rodrigo Duterte has been head of the Cabinet since 2016, serving a six-year term, and also chairs the NEDA board. Karl Kendrick Chua occupies the positions of vice-chairperson and acting socio-economic secretary. The board includes the heads of various government departments, the governor of the BSP and the chairperson of the Mindanao Development Authority.

Development Plans

The Philippine Development Plan (PDP) 2017-22 is the medium-term economic blueprint for inclusive growth. Its primary aims include tackling poverty and regional growth disparities, and transforming the nation into a globally competitive knowledge economy. Its three pillars are building trust and transparency between government and society; reducing inequality and increasing opportunities; and accelerating growth through innovation and human-capital development. Prior to the pandemic, goals included achieving upper-middle-income status, reducing the poverty rate to 14%, and lowering rural poverty from 30% in 2015 to 20% by 2022. As of mid-2020 revisions to PDP targets were under discussion in light of the pandemic; however, poverty-reduction goals look set to remain a priority. In July 2020 Chua stated that “the immediate objective under the PDP will now focus on a healthy and more resilient Philippines”. Furthermore, in October 2020 NEDA and the World Bank published a report underscoring the importance of digitalisation and digital adoption, and decreasing the digital divide to meet economic aspirations.

Longer-term planning is anchored in the AmBisyon Natin 2040 vision, formulated in 2016, which aims to eradicate poverty and create a middle-income country. This would require tripling GDP per capita from $2892 to $9350 by 2040, and growing the economy by an average of 6.5% per year from 2018. Priority sectors highlighted under the plan include manufacturing, health, agriculture and financial services. The plan, which is being implemented by NEDA, is aligned with the administration’s 10-point socio-economic agenda, which includes tax reforms and improvements to the ease of doing business, and the UN 2030 Sustainability Development Goals. In July 2020, at an online World Bank forum, Chua said the country had achieved seven of the 10 points on the socio-economic agenda, highlighting the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) among other reforms.

2019 Performance

Average economic growth of 6.4% in 2010-19 was up from 4.5% over the previous 10 years. Indeed, despite subdued global growth and uncertainty, GDP growth of 6% in 2019 – while slightly down from 6.3% in 2018 – marked the Philippines as one of the fastest-growing nations in the world. These fundamentals were reflected on the World Bank’s ease of doing business index in 2020: the Philippines rose 29 places to rank 95th out of 190. The bank highlighted improvements in starting a business, dealing with construction permits and protecting minority investors.

Economic expansion in 2019 was driven by the services sector, which grew by 7.5% to total P11.7trn ($232.7bn), according to the BSP. This was propelled by growth in numerous subsectors, notably public administration, defence and social security, which grew by 13.4%, and financial and insurance activities, up 11.9%. The IT-BPO segment grew by 7.1%, recording $26.3bn in revenue, according to figures from the IT and Business Process Association of the Philippines.

Meanwhile, industry growth eased from 7.3% to 4.7%, to reach P5.8trn ($115.4bn). Expansion was driven by construction (7.8%); electricity, steam, water and waste management (6.6%); mining and quarrying (3.6%); and manufacturing (3.2%). Construction’s growth rate, while high, was down from the 14.3% growth seen the previous year due to the delayed passage of the 2019 budget and the subsequent ban on public works during the mid-term election in May 2019. Likewise, manufacturing grew slower than the 5.1% expansion seen in 2018, marking the weakest growth for the subsector since 2009 (see Industry and Agri-business chapter).

Agriculture posted growth of 1.2% in 2019, up from 1.1% in 2018, to contribute P1.9trn ($37.8bn). Performance was attributed to key agricultural products such as maize, which expanded by 3.3%; mangoes (4.3%); and poultry and eggs (5.8%). However, contractions in segments such as sugarcane (-8.9%), palay (unhusked rice) (-5.9%) and bananas (-2.1%) weighed on growth, prompting the government to rethink agricultural programmes and projects that favour resilient crops.

Impact of Covid-19

The first case of Covid-19 on Philippine soil was confirmed in January 2020, and strict quarantine measures were imposed to varying degrees from mid-March onwards. As a result, the economy shrunk by 0.7% year-on-year (y-o-y) in the first quarter, 16.5% in the second and 11.5% in the third – a stark contrast to the 5.4% growth seen in the second quarter of 2019. This was driven by weaker remittances from OFWs, which were down 9.3% y-o-y in the second quarter, and slower growth in investment, exports and tourism earnings. According the IMF’s October 2020 “World Economic Outlook”, real GDP is forecast to contract by 8.3% in 2020 – the largest drop in Southeast Asia. This projected recession is deeper than the IMF’s June forecast of -3.6%, as the country continued to face one of the highest confirmed case rates in ASEAN, with over 435,000 cases as of December 2020.

Services, meanwhile, contracted by 15.8% y-o-y in the second quarter, compared to growth of 7.5% one year earlier. Given its sizeable share of GDP, the segment’s contraction translated into a 9.7-percentage-point drop in overall GDP, primarily due to stay-at-home measures and the grounding of land, sea and air travel. However, certain segments posted positive growth, including financial and insurance activities (6.8%) and ICT (6.6%), with e-commerce platforms moving customers to online transactions and e-payments (see Digital Economy chapter). Industry, for its part, contracted by 22.9% y-o-y, compared to growth of 2.5% in the same quarter of 2019. The decline shaved 6.9 percentage points off overall GDP, with construction and manufacturing contracting by 33.5% and 21.3%, respectively, due to restrictions on non-essential services under enhanced community quarantine (ECQ) – the country’s strictest lockdown category. However, as with services, certain segments grew during this period: pharmaceutical products and preparations, for example, expanded by 7.7%, following 27.3% y-o-y growth in the first quarter. Lastly, the agriculture sector, driven mainly by higher palay, maize, sugar cane and rubber production, grew by 1.6% y-o-y. The sector will continue to play an important role in economic recovery due to its connection to food security and poverty reduction.

Government Response

In response to the pandemic, and following a sharp increase in community transmission, ECQ was enforced across the most populous island of Luzon from March 16. The lockdown prompted the government to pass the Bayanihan to Heal as One (Bayanihan 1) Act on March 25, 2020, which granted President Duterte emergency powers to address the crisis. Among the mitigation efforts was a P595.6bn ($11.8bn) fiscal package for vulnerable individuals and groups, which included P205bn ($4.1bn) in cash aid for 18m low-income households; some P57bn ($1.1bn) in social-protection measures for workers; over P58bn ($1.2bn) for the medical response; and a P120bn ($2.4bn) credit guarantee for small and medium-sized enterprises (SMEs) and support for agriculture.

The Bayanihan to Recover as One Act (Bayanihan 2) was subsequently signed into law on September 11 to extend emergency relief, expand health care, and help businesses and OFWs. The P165.5bn ($3.3bn) stimulus included P140bn ($2.8bn) for hard-hit industries and a standby fund of P25.5bn ($507.2m) for the government to spend until the 2021 budget takes effect (see analysis). “Under Bayanihan 2 we allotted P820m ($16.3bn) to boost assistance to OFWs. OFW remittances will always be a significant factor in our post-pandemic recovery, as these will support consumption, savings and investment,” President Duterte told OBG. “We have therefore launched programmes such as the BaLinkBayan Portal and the Overseas Filipinos Remittances for Development project, which aim to harness remittances for investment and capital mobilisation.”

Other legislative measures include the Corporate Recovery and Tax Incentives for Enterprises ( CREATE) bill, which includes gradually lowering corporate income tax from 30% to 20% by 2027, among other pro-business incentives, and is the second package of the Comprehensive Tax Reform Programme (CTRP). Now approved by both the House of Representatives and the Senate, it is set to be enacted before the end of 2020 (see analysis). In a similar vein, in August 2020 the Securities and Exchange Commission (SEC) issued a regulatory framework for the creation and operation of a new corporate debt vehicle intended to support medium and large firms dealing with liquidity issues. “In addition to CREATE and Bayanihan 2, the government has worked on corporate debt vehicle programmes that are attractive to local and foreign investors,” Jose Luis Gomez, president and CEO of RCBC Capital, told OBG.

Fiscal Policy

Government spending had been increasing in the years leading to 2020 due to major infrastructure upgrades called for under the PDP 2017-22. Full-year public expenditure amounted to a record P3.8trn ($75.6bn) in 2019, or 19.5% of GDP, up 11.4% on the previous year. According to the Department of Budget Management, the bulk of public spending went to infrastructure projects under the Build, Build, Build programme, which increased by 9.7% to P881.7bn ($17.5bn) in 2019. With regard to public sector inflows, tax revenue grew by 10.2% and non-tax revenue by 8.9%, leading to overall government revenue growth of 10.1%, totalling P3.1trn (P61.7bn). Overall, however, this amounted to a budget deficit of 3.2% of GDP, equivalent to 2018. Meanwhile, the government’s outstanding debt-to-GDP ratio fell from 41.9% in 2018 to 39.6% in 2019, the lowest since 1986. Tax reform under TRAIN contributed to overall state revenue and narrowed the fiscal gap, enabling the Philippines to enter 2020 in a relatively strong position, with a P4.1trn ($81.5bn) state budget – up 12% on the amount earmarked in 2019.

Government expenditure rose by 7% and 22.1% in the first and second quarters of 2020, respectively, due to the pandemic. Total expenditure equated to a deficit of P473.3bn ($9.4bn) in the second quarter, reversing the P47.6bn ($946.7m) surplus one year earlier and equivalent to 11.4% of GDP. On the income side, revenue stood at P690.2bn ($13.7bn), or 16.6% of GDP, down 17.7% y-o-y. Higher spending was attributed to Bayanihan 1 and measures to protect vulnerable industries. By the end of August the deficit had risen to P740.7bn ($14.7bn), state revenue was down 8.3% and spending had increased by a further 20.8%. However, while state revenue in January-August fell by 12.2% y-o-y, a combined P1.6trn ($31.8bn) was collected, exceeding the period’s adjusted target by 7.2%.

In October 2020 the House of Representatives approved the 2021 budget and the Senate gave its approval in late November. Set at P4.5trn ($89.5bn), the budget – which will undergo a final review in December – is 9.9% larger than in 2020 and equal to 21.8% of projected GDP for 2021. It includes P203.1bn ($4bn) for health care to address the pandemic and P1.1trn ($21.9bn) for infrastructure to kick-start the economy.

Monetary Policy

Headline inflation decreased from an average of 5.9% in 2018 to 2.5% in 2019 – which sits within the BSP’s target range of 3% plus or minus one percentage point – and was attributed to slower price increases for food and energy items. In turn, household spending grew by 5.9% in 2019, with food and non-alcoholic beverages up 5.1%, and housing, water, electricity, gas and other fuels rising by 6.3%. Over the course of 2019 the BSP cut the key policy rate by 75 basis points (bps) as inflation eased, bringing the overnight reverse repurchase rate to 4%. In addition, after a cumulative 200-bp cut to the banking reserve requirement ratio (RRR) in 2018, it made 400 bps of cut in 2019, bringing the rate to 14% (see Financial Services chapter). To soften the impact of Covid-19, the BSP cut the RRR by 200 bps in March 2020, releasing P200bn ($4bn) into the financial system, with a maximum of 400 bps in cuts authorised for the year. This followed a reduction in the key policy rate by 50 bps in March to 3.25%. In the second quarter of 2020 the bank reduced its key policy rate by a further 100 bps, bringing the overnight reverse repo rate to 2.25%, a historic low. In October 2020 the BSP decided to hold the rate at 2.25%. Headline inflation, meanwhile, eased to 2.4% in the second quarter, down from 2.7% in the first quarter of 2020.

Trade & Investment

Despite sluggish global growth and trade uncertainty arising from US-China tensions, the Philippines exported $70.3bn of goods in 2019, up from $69.3bn in 2018, according to the Philippine Statistics Authority (PSA). This narrowed the trade deficit from $43.5bn to $37.1bn, marking a shift away from the deficit pressure of construction materials imported for the Build, Build, Build programme. The top-three export destinations were the US, up 7.7% at $11.46bn; Japan (3%, $10.63bn); and China (9.2%, $9.63bn). The top-three export groups were electrical products, at $40bn, or 57% of the total; other manufactured goods ($4.2bn, 6%); and machinery and transport equipment ($2.8bn, 4%). Imports, meanwhile, totalled $107.4bn, down from $112.8bn in 2018. The top-three import markets were China, up 11.5% at $24.5bn; Japan (-6.4%, $10.1bn); and South Korea (-27.2%, $8.2bn). The top-three import groups were electronic products, at $28.1bn, or 26% of the total; mineral fuels, lubricants and related materials ($12.8bn, 12%); and transport equipment ($11bn, 10.2%). Foreign direct investment (FDI), however, dipped to $7.7bn in 2019, a four-year low. Despite marking a 21.3% drop, the total was nonetheless higher than the $6.8bn forecast. Stakeholders attributed uncertainty over the passage of CREATE as one reason for the subdued FDI inflows. While the delay from its first approval in September 2019 may have caused some investors to adopt a wait-and-see approach, there is optimism that the lower tax rates and incentives outlined in the act will boost investment appeal in the longer term – strengthening the Philippines’ bid to attract players seeking to diversify operations away from China.

International trade faced a challenging environment in 2020 as Covid-19 curtailed economic activity. The Philippines recorded steep contractions in both imports and exports in the first eight months of the year, according to the PSA. Export earnings totalled $39.3bn in January-August, a 16.6% y-o-y decrease. FDI inflows, meanwhile, were down 11% y-o-y in January-July, at $3.8bn, according to the BSP. On a positive note, however, FDI net inflows rose for the third consecutive month in July on the back of improving investor sentiment due in part to easing of containment measures.

Labour Market

The labour market, characterised by a young and English-speaking workforce, has long been attractive. Efforts are under way to unlock further potential, such as digitalisation initiatives to upskill the IT-BPO workforce and modernise agriculture via innovation. In 2019 the labour participation rate was 61.3%, with 42.4m employed. As a result of Covid-19 and related lockdowns, unemployment rose to 17.7% in April 2020 – and the labour participation rate dropped to 55.6%. Declines were seen across the main economic sectors: services registered a 22.8% decrease in employment; industry fell by 28.2%; and agriculture was down 9.5%. On a positive note, according to the PSA, things have improved somewhat, with an additional 7.5m employed in July compared to April. Gains were seen across virtually all regions and sectors. Notably, agriculture saw an increase of 2.1m due to higher output, and construction registered an additional 1.2m employees as construction activity resumed. The passage of Bayanihan 2 is expected to offset some employment losses through subsidies and cash relief for affected households and workers. Around 50,000 micro- and SMEs, for example, should benefit from a further P10bn ($198.9m) allocation under the stimulus.

While 2020 was a challenging period for the Philippine economy, the government is striving to turn the pandemic into opportunity. The signing of Bayanihan 1 and 2, the reopening of vital industries and the imminent passage of the CREATE bill should support recovery. While 2020 GDP is forecast to contract significantly, the Asian Development Bank expects a rebound in 2021, with GDP growth projected at 6.5%.

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