Citizens’ Monitoring of the AIIB Loan for COVID-19 Response Programs

Social Watch Philippines^*

The pandemic triggered by the novel coronavirus disease, COVID-19, has caused upheavals in people’s lives and economy of countries worldwide, including the Philippines, and radically challenged state capacity to effectively and quickly protect the population and economy from the adverse social and economic repercussions of the health crisis. Responding to the pandemic, the Philippine government implemented emergency measures – including declaring a state of national emergency and enforcement of enhanced community quarantine (ECQ) or strict stay-home orders in Metro Manila and key regions of the country – to contain the spread of COVID-19. The strict lockdown which ran from mid-March to end of May 2020 severely disrupted people’s lives and business activities, causing huge economic losses, and loss of jobs and incomes among millions of Filipinos. Among the most severely affected were millions of families belonging to the poor, workers in the informal sector and vulnerable groups. To support badly affected households and businesses, the government launched the COVID-19 Response Program called PH-PROGRESO aimed at mitigating the negative impacts of the pandemic and containing the spread of COVID-19. Health, social protection and economic relief measures were identified for implementation in three stages:  Emergency Stage (March to May 2020), Recovery Stage (June to December 2020, and Resiliency Stage (2011 onwards).

The program was largely to be financed through the realignment of the national budget and fresh borrowings and grants from international financial institutions. The Philippine Congress passed Republic Act 11649 or the “Bayanihan To Heal as One Ac” that allowed the Philippine President to realign the 2019 and 2020 budgets. The realignment realized a total of Php 654.25 billion for the program. The Asian Development Bank (ADB), Japanese International Cooperation Agency and Asian Infrastructure Investment Bank co-financed the CARES Program worth USD 2.748B as budgetary support loan to the Philippine pandemic response program. An emergency subsidy program of Ph 200 billion targeting 18 million low-income families was part of the package of measures for the emergency and recovery stages. The Bayanihan Act mandated a subsidy of Php 5,000-8,000 per month for two months to qualified beneficiaries computed based on prevailing regional minimum wage rates and in consideration of the current conditional cash transfer and rice subsidy received by the beneficiaries.

Social Watch Philippines (SWP) undertook the project Citizens’ Monitoring of Financing for COVID-19 Response Focus on AIIB Loan to monitor the implementation of health, social protection and economic relief measures for the emergency stage. The monitoring focused specifically on measures to increase testing capacity, the Social Amelioration Program (SAP), the COVID-19 Adjustment Measures Program (CAMP) for formal workers and Small Business Wage Subsidy (SBWS) for small businesses. Monitoring methods included desk review of relevant literature and secondary sources, internet search and consultations with citizens in several barangays in Manila and Tacloban City.

The findings of monitoring are mixed, pointing out some bright spots as well as weaknesses in the implementation of the programs.

Program Coverage: Inclusion and Exclusion, Adequacy of Funding, Program Criteria. With a coverage of 18 million low-income families and budget of Php 200 billion, the SAP was considerably the government’s major social protection measure in mitigating the adverse socio-economic impact of the pandemic and nationwide lockdown. The beneficiaries included four million families enrolled in the government’s conditional cash transfer program (4Ps), workers in the informal economy and the vulnerable consisting of indigent senior citizens, persons with disabilities, pregnant and lactating women, solo parents, overseas workers in distress, indigenous peoples, homeless, and other vulnerable population. The distribution of the first tranche of the emergency subsidy benefited more than 17 million families. This number drastically declined to 14 million families in the second tranche owing to deduplication and delisting of unqualified beneficiaries. More significantly perhaps was the fact that the second tranche was limited to areas under strict lockdown. This effectively excluded millions of first tranche recipients who live in non-ECQ areas but nonetheless were part of the targeted 18 million poor families nationwide considered to be adversely affected by the pandemic. More than ten billion pesos out of the Ph200 billion budget were left unspent at the conclusion of the program.

CAMP was overwhelmed by the unexpected magnitude of 1.6 million applicants nationwide. Nearly a million applicant workers had to be turned away when its budget of 3.3 billion pesos was exhausted by mid-April. When CAMP closed in June, about 658,886 formal sector workers received the one-time P5000.00 financial assistance from the program. SBWS which targeted one million MSMEs with a budget of 51 billion pesos reached 146,000 MSMEs and 3.59 million workers. At barely 15%, this was just a small segment of the one million MSMEs targeted by the program, which means that 85% of the targeted MSMEs have been left out of SBWS. At the close of the program, the unused amount of five billion pesos had to be returned to the national treasury. It should be noted that when the CAMP closed, the workers were advised to apply to SBWS. It is not clear what proportion of the workers in formal sector has been actually serviced by programs because there is no clear data on how many workers are working in small businesses, beside the fact the concerned implementing agencies did not have a common definition of MSMEs. Lacking this important information, it is difficult to claim that the programs have sufficiently covered the intended beneficiaries or that the program had significant impact on the formal sector. Further, the conditionalities for availing of SBWS program could have systematically excluded some workers in the MSMEs. SBWS catered only to regulated MSMEs leaving out a sizeable size of informal MSMEs in the process.

The recruitment or enlistment strategy of potential beneficiaries may have also impacted the breadth of coverage in ways that led to unintended exclusion of potential beneficiaries. CAMP and BSWS were open to workers in the MSMEs but required employers to apply to the program on behalf of their employees. Where SAP actively sought the targeted beneficiaries through house-to-house enlistment in the program, CAMP and SBWS largely relied on the volition and initiative of employers to apply to the program on behalf of their employees. For SAP, going house-to-house to purposely enlist potential beneficiaries may have been costly and prone to error, but the benefit of being able to identify and enlist qualified beneficiaries on a large scale in a pandemic situation may reasonably outweigh the cost.  

Where the Covid-19 testing capacity of the public health system is concerned, coverage may refer to the number of tests that the health system aimed to accomplish per day. For a health system that appeared ill-prepared and ill-equipped when the pandemic struck the country, moving from 600 Covid-19 tests a day capability at the onset of the pandemic and achieving the aspired targets of 8,000 tests per day by end of April and 30,000 a day by end of May was reasonably noteworthy. Accomplishing these targets were made possible through ramping up the purchase of RT-PCR testing kits, certification of more testing laboratories across the country and establishing big testing centers in strategic areas nationwide. Still, the targets may not be too significant given the rapidly rising cases of Covid-19 and aggressive rate of transmission during the early months of pandemic. Meeting the target of 8,000 or 30,000 tests per day notwithstanding, Covid-19 testing has been fluctuating and the number of tests done was mostly lower than the daily testing capacity, or the maximum capacity of all accredited laboratories in the country. The sluggish response of the Department of Health to the pandemic only compounded the growing health crisis. It was not until April, three months after detection of first case, two months after report of first death, and one month after report of first local transmission and the WHO declaration of pandemic that DOH came up with Covid-19 testing strategy. Covid-19 testing was also beset with the issue of inaccessibility especially to the low-income families because of its high cost, notwithstanding government subsidy and price regulation. 

Subsidy: Sufficiency, Delay, Duplicate Beneficiaries, Overlapping Mandates and Target Population. The amount of subsidy is hardly 70% of the monthly minimum wage income.  The subsidy is even below the country’s poverty threshold of Php10,481.00 (2018) a month for a family of five. The two-month duration of cash assistance did not realistically match the financial and job instabilities that the people continued to experience in the continuing crisis and regardless of the quarantine category of their communities. Community consultations showed that the people considered the aid inadequate for their essential needs during the months-long lockdown. 

The top-up policy of the SAP effectively made the emergency subsidy an augmentation assistance to beneficiaries of existing social protection programs of the government.  It had the effect of diminishing whatever significant relief the cash assistance may have especially for the poor who, even prior to pandemic, were already dependent on the social protection programs of the government. Current social protection programs like 4Ps, rice subsidy and social pension were designed to cater to a targeted population for an entirely different rationale and goals in a normal and non-crisis situation. SAP has been designed to help poor families cope with a continuing crisis, that created economic and financial hardships beyond what their current resources and capacity can carry. With top-up, whatever new and fresh cash aid that beneficiaries received from the SAP would just be a fraction of the subsidy applicable in the region.

The distribution of SAP cash relief met tremendous delays, negating the urgency of the relief measure. The subsidy was supposed to be distributed in two tranches in the months of April and May but took nine months to complete.  The lengthy and manual process of beneficiary profiling, validation of the list of beneficiaries and deduplication process were the major causes of the delay. Confusion in interpreting overlapping guidelines also contributed to delay. Delays were also experienced in the distribution of SBWS subsidy to former CAMP beneficiaries due to verification of correct top-up that should be given to the latter.

Overlapping mandates and target population among the implementing agencies of the emergency subsidy programs led to duplicate assistance. This necessitated crossmatching of the implementing agencies’ beneficiary databases which delayed the distribution of the subsidy. Other causes of delay were attributed to local governments such as late submission of the financial liquidation reports on the first tranche distribution and the social amelioration cards used for vetting and coming up with a clean list of beneficiaries. Discrepancies in beneficiary information—e.g., lack of middle initials or contact—in the card also caused delay in processing and distribution of payments. 

Use of Digital, Electronic and Computer Technologies from Application to Pay-outs. Implementation can be smooth, quick and efficient for programs that are able to use electronic technologies and computerized database in filing, review and processing of applications and distribution of aid. The SBWS utilized the computerized databases of the social security and tax agencies of the government in processing applications for SBWS subsidy and in correctly identifying qualified beneficiaries. Application to CAMP was also done online. The CAMP and SBWS tapped into digital technologies as well as conventional bank account systems for payments which ultimately benefited the beneficiaries by way of a more efficient and fast delivery of cash assistance. Through digital and electronic payments, subsidies were directly credited to the accounts of beneficiaries through payroll bank account, e-wallet, cash cards and remittance payment centers. This mode of payment was also used for the SAP beneficiaries who were already in the payroll of the conditional cash transfer. Apart from being fast and efficient, these modes of payment promoted transparency and lowered the risk of leakage or corruption. The use of technologies has also minimized, if not removed, risk of virus contamination and transmission arising from face-to-face transaction between beneficiaries and government employees handling the programs.

Role of Local Government. The LGU role in data collection and beneficiary identification including in the distribution of cash aid has had significant contribution to program implementation. For a massive national program like SAP and given the urgency to deliver the program, the local governments and barangays had a critical part in implementing the program. Their role in data collection and beneficiary identification and validation including in the distribution of cash aid has helped the program achieved its targets. The local governments also provided local funds for Covid-19 programs and services like testing, vaccination, support to local hospitals and financial and relief assistance to the residents.

Claims of Irregularity, Corruption and Political Patronage. The intrusion of discretionary politics at the local level particularly in the identification of potential beneficiaries as well corruption in the distribution of cash subsidy marred the implementation of SAP. Barangay captains were reported to have favored relatives and political allies in the distribution of the social amelioration cards. These cards were used as basis for drawing up the list of beneficiaries in the barangays. There were reports of barangay officials chopping up a single pay-out into several parts for different households, beneficiaries receiving very small amounts, and low-income households not receiving aid at all while better-off households do.

Citizen Participation. Citizens had the opportunity to create access points for participation in the implementation of the SAP in ways that helped ensure that the program would reach and benefit the intended beneficiaries. This was evidenced in the experience of some barangays in Manila and Tacloban City. Women leaders and senior citizens in the community actively participated and led in closely monitoring and scrutiny of the beneficiary lists to ensure that qualified beneficiaries were included and in pointing out irregularities in the distribution of subsidy. In another instance, consensus building among barangay officials and beneficiaries helped diffuse a potentially contentious issue in the distribution of SAP subsidy.

The participation of CSOs and women in the implementation of COVID-19 programs varied across the programs and was most prominent in the identification of potential beneficiaries and in ensuring the authenticity and inclusiveness of the beneficiary list. The women were also active in helping out beneficiaries with complaints.

Pandemic’s Impact on Health and Family Expenses. The pandemic and lockdown imposed by the government significantly impacted people’s access to health especially among pregnant women, children, senior citizens and persons with disabilities (PWDs). Women and children were the first to suffer as the local health systems at the barangay level were forced to limit or suspend their services in the community, e.g., pre-natal consultation, family planning, free contraceptives, children’s immunization due to the lockdown enforced by the national government. The pandemic exposed existing health issues, such as lack of water, sanitation and hygiene, that have long been felt by the community. Shifting to online classes of children entailed additional costs for internet connection, computer, cellphone and cellphone load. It also meant expenses for protective gears like face masks and face shields

Pandemic’s Impact on Women. Women tended to feel and have a lot more responsibility than men during the pandemic. As men were forced to stay home due to job loss, women continued on with household chores and added responsibility of helping children with their online classes, caring for sick members and taking on casual jobs to earn some money. For them, more time spent doing home chores meant less time to engage in gainful employment.  While both men and women expressed concerns about COVID-19 infection, health concerns were second only to having some source of livelihood.  

Other socio-economic impacts. As strict quarantine measures forced people to stay home, they explored and engaged in jobs that did not require leaving the house like online selling and online barters. Staying at home improved family relations and spirituality. Incidents of teen-age pregnancies, sexual harassment, abortion, domestic violence during the lockdown were also reported in the community consultations. The people also feared infection and worried about health and safety of their families, lost incomes and job loss.

Policy and Program Recommendations. Harmonization and integration of different social protection programs is desirable as it eliminates fragmentation, duplication and overlapping of mandates and target population that is not only administratively costly but confusing as well to the targeted program beneficiaries. The harmonization and integration should be able to establish effective systems of coordination across agencies involved in the delivery of social protection programs in time of pandemic and under normal times. More strategically, the conduct of geographic universalism for the provision of cash transfers focused on the poorest villages and municipalities with a view to scaling up until it reaches universal dimensions is proposed. This is because this not only promotes a right-based entitlement approach but also expedites the delivery process as it does away with the tedious and inefficient targeting of specific households which oftentimes excludes others who need the provisions too.

The establishment of a common or integrated database and information system on existing and potential beneficiaries of social protection that is accessible to national government agencies involved in social protection programs as well as to local governments can help rationalize various social protection programs, harmonize efforts, maximize resources and reduce duplication.  Design of targeting system that is protected from discretionary politics can minimize if not eliminate problems related to patronage and favoritism in identifying beneficiaries for social protection programs.

Women have multiple roles in family and society that are further put to challenge in times of crisis like the pandemic. Policy attention to women and their needs should inform the targeting and design of social protection programs such as by strengthening institutions of care (e.g., public daycare centers, health centers, schools)  which will allow them more time for self-care or to look for opportunities for paid work. Implementing a social protection program that promotes equitable sharing of household work between men and women should also be prioritized.

Furthermore, a more realistic, if not generous, package of financial subsidy that is inflation-sensitive and more attuned to the duration of crisis or pandemic is likely to have more significant impact in mitigating adverse impact of pandemic on the poor and low-income families.

Finally, providing substantive and meaningful spaces for citizens’ participation in the design, implementation, monitoring and evaluation of programs that aims to address the health and livelihood crisis spawned by the covid-19 pandemic is highlighted. Concretely, this means government ensuring sustained citizens participation in government bodies like the Inter-Agency Task Force (IATF). This will also be necessary as the country ‘moves on’ from the pandemic and builds a more transformative future.

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