SOCIOECONOMIC Planning Secretary Karl Kendrick T. Chua believes the pandemic will not plunge the economy in a lost decade because of the reforms the administration introduced. Through the national ID alone, the government is able to achieve financial inclusion, according to the chief of the National Economic and Development Authority (Neda).
Chua said he estimates that there is a financial inclusion gap of 8 to 9 million in the Philippines. But through the kiosks of the LandBank of the Philippines available at the National ID registration centers, the government has allowed around 6 million Filipinos to open bank accounts.
He added that other reforms included the tax reform system that allowed the government the financial headroom to spend five percent of GDP for infrastructure every year, except for 2020.
Reforms such as the Rice Trade Liberalization (RTL) Law has removed rice from the list of top 10 causes of inflation. Rice prices have posted negative growth since the RTL was implemented.
“So I do not agree that we have 10 years of lost opportunity. We have done many reforms that will advance our development,” Chua said during a webinar organized by the Economic Journalists Association of the Philippines (EJAP) and held last week.
“I would continue to rally all of you, both private and government, to work together, to use this crisis and get as many things done. In this crisis we are also passing three important liberalization laws. So there is momentum so let’s keep it going,” he said last October 28.
Long Covid
CHUA reiterated Neda’s findings that the pandemic will cost the economy a total of P41.4 trillion over the next 40 years.
Of this amount, P11 trillion represents the reduction in future wages and productivity, as a result of the suspension of face-to-face classes in the school year 2020 to 2021.
This estimate includes the lost wages of parents who forgo or reduce work hours to accompany their children in online classes.
In the Philippines, Chua said 3 million households or 12.5 percent of households have children and seniors living together.
In a Neda online survey, almost 60 percent of families have one parent who skips work to teach their children. This results to 25-percent forgone income.
Due to lost income of parents and inability of some students to engage in distance learning, enrollment declined by 1.1 million or around 5 percent.
Chua noted that in the Philippines, due to online classes, around 865 private schools reportedly closed down.
Citing World Bank data, Chua said, the 12 years of expected schooling in the Philippines is equivalent to only 8 years of learning adjusted based on the results of international assessments. This is likely to fall as a result of the long school closure.
Education, health
FURTHER, Chua said, citing the Asian Development Bank, each year of lost schooling translates to around 10 percent permanent lower wages in the future.
“All these mean the pandemic and school closure are exacerbating the already unequal access and lower quality of education in the Philippines,” Chua said in a presentation.
Apart from education, health also suffered. Chua said PhilHealth claims for high burden diseases such as cancer, diabetes and hypertension have dropped by 77 percent during the pandemic.
He said this means that the majority of the people are deferring health treatment due to lack of resources for healthcare, mobility restrictions, or the fear of getting infected in hospitals.
Further, 1 in 3 children below 5 years old are stunted (short for their age); 1 in 5 are underweight; and 1 in 17 are wasted (low weight for their height).
Lower productivity
CHUA said unwanted pregnancies increased by 320,000 over the 16 month quarantine period. The share of pregnant women receiving pre-natal care also dropped from 99 to 61 percent.
The data also showed more than half of Filipino workers faced a mental health challenge and 23 percent of workers thought about quitting their job.
Chua said studies by the World Health Organization estimated that life expectancy post-Covid could be 1 to 4 years shorter. If life expectancy will be cut due to early death, Chua said this will lead to foregone wages.
In the Philippines, the PSA noted that life expectancy is at 71 years old for males and 77 for females. If this will be cut by 1 to 4 years, the life expectancy of males will be reduced to 67 to 70 years while life expectancy for females will be cut to around 76 to 73 years.
Chua noted in his presentation that people who recover from COVID-19 experience other health concerns such as brain fog, weakness, respiratory damage.
“Many more people will become unable to work fully due to the inability to get treatment from other diseases. Both of these lead to lower productivity,” Chua said. “In addition, there are also additional healthcare costs associated with these various diseases and sickness.”