Up to what extent can trillions help during this pandemic?
Filipinos are yet to swallow a dose of a bittersweet pill as its debt continues to balloon amid addressing the lashes of the ongoing COVID-19 virus.
The said pandemic has caused a significant toll among various countries in the world. People’s regular and day to day activities abruptly shifted while the majority have been forced to clasp the ‘new normal’ ,a brand-new way of living where work and interactions with other people are in lieu with safety measures. Some governments continue to struggle in terms of various aspects of life (social, economic, and health aspects) as this pandemic stabbed them at their very core.
Decreasing human resource, human mortality detriments plus the deflating economy, this virus’ devastation is a heavy weight to carry. Philippines, in this manner, continues to rack-up loans and debts to boost the COVID-19 response and to address the necessities needed therein. However, are these loans really worth it? Where shall we lay our feet, money and budget wise, at this point of the pandemic?
DEBT LIST
The first wave of the Philippines’ COVID-related debt is a whopping $500 million (Php 25.2-billion) loan approved last April 9 by the World Bank. This tranche aims to strengthen Philippines’s dire financing necessities on COVID-19 response. Philippines will pay this loan for 29 years with a grace period of 10 and a half years.
Added on the list is that debt inked last April 22, amounting to $100 million from the World Bank. This huge loan was said to be utilized in augmenting vital healthcare and medical services, in purchasing medical devices and increasing the number of test kits.
One more surge-off of our country’s pain in the pocket is reflected with another loan permitted by the Asian Development Bank (ADB) last April 24, with a surmounting amount of $1.5 billion. This loan serves to reinforce the government’s dealings in helping its people cope-up with the virus’ social, economic, and health costs.
Seems like the previous loans aren’t still enough, as the Philippines on April 27 withdrew another loan from ADB. This time, the $200 million aims to be used as an auxiliary for the households susceptible as this novel coronavirus continue to cripple. The funds herein also serve to provide emergency subsidies to Pantawid Pamilyang Pilipino Program (4Ps) conditional cash transfer recipients.
The Philippines seems to have bitten the bait of the infamous Chinese debt-trap as another COVID-related loan, backed with “Chinese help”, has augmented its financial crises. In fact, this debt-trap diplomacy had already cornered Djibouti, Tajikistan, Maldives, Madagascar, and Pakistan. The said loan broadcasted last May 29 was from the Asian Infrastructure Investment Bank (AIIB), totaling to $750 million. This Chinese-backed loan is intended to increase the numbers of testing capacity, as an assistance to the exposed sectors of the country, and to also provide shoulder to less-fortunate families.
Last May 29, the World Bank announced another $500 million loan of Philippines that would be used in lessening the COVID-19’s impact to poor households and give financial reprieve to small and medium enterprises (SMEs). As of mid-May, the borrowings for Covid-related response of our country peaked at $4.858 billion (about ₱246 billion).
Fresh from the headline is another ₱23.5 billion loan secured by Philippines from the country of Japan last July 1. It is also worth mentioning that the government had realigned ₱245 million from the 2020 budget on top of the ₱27.1 billion initial spending plan for COVID-19 response. How much more should we expect?
DEBTS & DOUBTS
Nevertheless, there seem to be difficulties in terms of distributing cash aids, as numerous complaints were raised by the recipients themselves. Some local government heads were said to cut-down the amount that must be duly given, while some were being selective to who must truly need the subsidy. The issue of “palakasan” and “kumare/kumpare” were also seen as threats to a proper cash assistance distribution. It is not just the virus per se but also acts of bribery, are our foes amidst this crisis.
With the unimaginable amount of debt we already had, we still yet to achieve the authentic “mass-testing” and eradicate the condemnation this virus has brought to this nation. Is this the reflection of the government’s incompetence in dealing with such debacle? Is it the result of several barks of our government at the wrong tree? One way or the other, with these overwhelming amount of debts our country reaped in just few months, our future seems to swim in a pool of financial obligations.
COVID-19 cases in our country are still rampant. With that in mind, we must be skeptical to “where do all those loaned money went”.
While the amount of loans and its supposed utilization seem unparallel, Filipinos’ fight against this virus seem to get even worse. The sum of borrowings to be payed by our country escalates to the extent we never wanted. After all, even with all the money in the world, the spread of the pandemic cannot be stemmed if those who govern the country don’t spend it wisely. Perhaps, not only proper handling of funds but great leadership, in general, is what we really need to stop the bleeding this pandemic have had brought to our lands.
Art by Xia Xinjie
