"This kind of working together between the private and public sectors ought to be a model that opens the minds of certain government bureaucrats to the advantages of doing more with less."
"This kind of working together between the private and public sectors ought to be a model that opens the minds of certain government bureaucrats to the advantages of doing more with less."“PERA” is the predictable acronym for a new piece of legislation pending in the House, dubbed the Philippine Economic Recovery Act. Right now it’s in the process of consolidating three separate bills filed by the ubiquitous Albay former governor and now Rep. Joey Salceda and two of his beauteous colleagues, party-lister Sharon Garin and UP economics professor Stella Quimbo from Marikina.
I was fortunate to attend a webinar, hosted by the economics departments of UP and Ateneo and the Philippine Economics Society, yesterday, featuring the above three,. I can only hope that it will be repeated in the future, as the bill makes its way through Congress while the rest of us try to find our way out of the present viral fog.
Cong Joey clarified that PERA is just one of several legislative initiatives expected from the House this year. The others are bills on corporate income tax reform (TRAIN-3, now CITIRA) which has been supplemented with Covid-related language; unemployment insurance which acts as an “automatic stabilizer” to help our people weather economic shocks like this virus; promotion of economic resiliency and digital currency; new taxes aimed at e-commerce, road users, and POGOs; and, of course, next year’s budget.
But other bills have already come out of the House, as far back as last year or even earlier, and are still stuck in the Senate. These include a revised Public Services Act to bring it into the modern age, and bills to liberalize retail trade and foreign investments in general. Why these bills are still sitting in the Senate is a mystery to me. Perhaps the honorable senators are waiting for the rarefied ambience of the brand-new office building they promised themselves, in order to get their juices going.
* * *
Salceda’s hang-up is more infrastructure: to improve our health system, to push Build Build Build, to utilize public private partnerships a lot more in order to relieve government of the additional fiscal pressure that all this new spending post-pandemic will create. He wants to appropriate something like P650 billion for infrastructure–an amount which may seem huge, until you hear Cong Sharon’s estimate that the entire economy might contract by a trillion pesos or more this year.
Garin focused on the number of people who might be especially affected by the impact of the epidemic on their workplaces. If you just focus on daily wage earners and the informal sector; repatriated OFWs; the start-up, micro, small, and medium enterprises (SMSMEs) who account for 60 percent of total employment; and industries either deemed non-essential or highly impacted (like tourism, aviation, and import-export), then the total affected workers number nearly 60 million. Of course there’s a lot of double-counting here, but the general idea is clear: That’s a lot of livelihoods on the line.
Unlike the Bayanihan Act, which sought to tide over the vulnerable poor with direct financial assistance, PERA now seeks to help employers—especially the smaller ones–survive the epidemic so all those jobs are preserved for employees. This isn’t a handout program, but a recovery and stimulus program.
Cong Stella rightly pointed out that the economy will remain depressed from the supply side as well as demand side. The cashflow squeeze of employers who closed down during the lockdown will lead to lay-offs of anywhere from 30 to 50 percent of workforce. At the same time, employees themselves will be leery of going back to work until they’re fully confident that they won’t get infected by their colleagues.
In my own view, the longer-lasting legacy of the epidemic will be not only a drop in productivity because of absenteeism and lay-offs, as Quimbo fears, but also a semi-permanent uptick in business costs as employers are forced to pay for new but necessary burdens: testing and retesting of employees, enforcement of social distancing and physical hygiene on the job, assistance with contact tracing, compliance reporting, and so on.
On top of these additional costs of doing business, panel reactor and Ateneo economics professor Alvin Ang estimates that the entire economy could contract all the way down to 70 percent of its capacity under the “new normal” environment post-pandemic. Think of buses or jeepneys who’ll have to carry only one-third of their usual capacity in order to comply with the one-meter separation rule, and you get the idea.
* * *
Not surprisingly, the star of the show was panel reactor Manny Pangilinan, who rendered all those PhDs and congressmen star-struck. Speaking from the vantage point of his involvement in so many businesses, MVP came up with all sorts of useful advice as the premier practitioner of whatever he chooses to preach upon.
As the grise eminence of the local telcos, he warned that telcos like PLDT would be coming under a lot of pressure to expand their broadband capacity for all sorts of new uses: online workplaces to minimize on-site contact, online learning to teach the kids, even using telco data and devices to facilitate contact tracing. While the details are still being worked out for a new national ID that’s turning out to be a lot more complicated than expected, MVP offered access to the data and facilities that telcos routinely rely upon.
Because he also runs a business portfolio of hospitals, MVP made these available as well. In fact he’s promised to administer up to 10,000 tests per day through his hospitals—a number which already represents the entire minimum national target, and one-third of the stretch target of 30,000 per day.
Lastly, he shared useful insights about the need to improve our intelligence on the supply chain and logistics, especially regarding food distribution from outside Metro Manila. We’ve all heard those stories about Baguio farmers destroying their produce because they couldn’t get it to Manila. Improving our intelligence gathering is a project that PLDT—again—will work on together with academe.
This kind of working together between the private and public sectors ought to be a model that opens the minds of certain government bureaucrats to the advantages of doing more with less, by relying more often on the PPP route. The virus has put the fear of God very much into the hearts of both public officials and corporate officers. If only for this, maybe something good will come out of it after all.
Readers can write me at [email protected].