Ephemeral universalism in the social protection response to the COVID-19 lockdown in the Philippines

By Emma Lynn Dadap-Cantal, Andrew M. Fischer and Charmaine G. Ramos

Since March 2020, the Philippines has implemented one of the world’s strictest and longest lockdowns in response to the COVID-19 pandemic, which has caused severe disruptions in peoples’ livelihoods. The government’s emergency social protection response, the ‘Social Amelioration Program’ (SAP), has also been notably massive, introducing one-off near-universal income protection. It is an insightful case given that the country’s existing social assistance system has been celebrated as a model for developing countries, even though it has been mostly bypassed in the emergency response. Moreover, the country’s highly stratified and fragmented social policy system has resulted in implementation delays and irregularities that have fostered social hostilities and undermined the potential for such momentary universalism to have lasting transformative effects.

The Philippine government first imposed its ‘community quarantine’ on 15 March, which has since been extended until 30 June. Thus far, the pandemic has not been severe relative to evolving global indicators, with 302 confirmed infections per million people and 11 confirmed deaths per million people as of 25 June (although at only 5,760 tests per million people, these confirmed rates are likely to be significantly underestimated). However, as elsewhere in the Global South, the lockdown has thrown the country into an employment crisis given that more than 60 percent of its workforce is informal, most in precarious situations even when earning above the official poverty line.

In response, the government rolled out the ‘Social Amelioration Program’ (SAP), comprising at least 13 different schemes and with an estimated total budget equivalent to as much as 3.1 percent of the country’s GDP [1]. The largest scheme is the Emergency Subsidy Program (ESP), which has been allocated 200 billion Philippines pesos (PhP; about 3.5 billion euros), more than three times the combined budget of all the other schemes.

The ESP was initially intended to cover 17.9 million households, while the other SAP cash subsidy schemes were to target more than 5.2 million individuals. Assuming that none of these overlapped (e.g. only one subsidy recipient per household), the SAP would have covered over 23 million households, or more than 96 percent of the roughly 24 million households in the country. This extent of coverage is effectively universal, representing an attempt to provide basic income support to all but the richest five to ten percent of households.

The ESP initially sought to provide cash transfers to low-income and vulnerable families during the months of April and May, the projected duration of the lockdown. The transfers range from 5,000 to 8,000 PhP per month (about 90 to 140 euros), depending on the minimum wage of the region of residence. This is notably more generous than the existing poverty-targeted conditional cash transfer programme, the Pantawid Pamilyang Pilipino Program (hereafter Pantawid), which provides families with at most 3,450 PhP per month (approximately 60 euros). The 4.4 million Pantawid families have nonetheless been included in the ESP and the amount they receive has been topped-up to the ESP amount.

Despite these ambitions, the SAP has already been faltering. Based on our research [2], a number of problems can be discerned:

Delays and backtracking in the distribution of the ESP. While the ESP was supposed to be paid in two monthly tranches in April and May, the first tranche was yet to be completely distributed as of 15 June [3]. It was later announced that the second tranche, whose distribution only began on 11 June, would only be distributed to beneficiaries living in communities where the lockdown conditions had not been eased – about 8.5 million families – as well as to an additional five million ‘waitlisted or left out’ families, or, as explained by the DSWD, those that did not make it to the list of first tranche beneficiaries [4]. It is not clear whether either of these numbers include the Pantawid households mentioned above or why there would have been ‘left out’ families from a programme that was ostensibly universal.

Vague and fragmented selection guidelines. In addition to this lack of clarity at the aggregate level, the guidelines in the selection of ESP beneficiaries have also been vague and fragmented, which subjects them to different interpretations and discrepancies on the ground. There is no single document that describes the process in detail or provides even an overview. The social registry that is used for poverty targeting in the Pantawid – the Listahanan – was not used for the identification the non-Pantawid families, who constituted 75 percent of the ESP target beneficiaries in the first tranche. Instead, the government reverted to reliance on village-level government functionaries, who have proven decisive in identifying ESP beneficiaries and distributing assistance. This has re-politicized the administration of social protection after years of supposed attempts at depoliticization by means of the Listahanan and the Pantawid.

Failed attempts at overcoming residualism. The SAP reflects an attempt to overcome the limitations of the country’s polarised and fragmented social protection system, even while this system has rendered almost impracticable its universalist impulses. The existing system notably excludes close to half of the population at the middle of the income distribution – often referred to as the ‘missing middle’ [5]. This refers to the 40 percent of employed people working in the informal sector who are not covered by the contributory social insurance designed for those formally employed, which covers about 40 percent of employed people, while at the same time they are not covered by the Pantawid, which covers about 21 percent of the population. The Pantawid beneficiaries are presumed to be the poorest people, although there have been serious concerns regarding its accuracy of targeting, meaning that it excludes many of the poor, while including many who are not (at least, not according to the poverty lines used by the programme) [6].

Social hostilities in the face of systemic confusions. The confused and fraught implementation of the SAP has therefore exacerbated fundamental schisms entrenched within the existing social protection system, including confusions about who is in fact targeted by the ESP and contestations by local government officials over the number of beneficiaries set for their respective cities or municipalities [7]. In particular, given the perception that Pantawid families are prioritised by the ESP (in the sense that they are automatically eligible for the programme), they have drawn public attention and scrutiny, even though they only accounted for about 25 percent of targeted recipients of the ESP in the first tranche. As a result, anti-poor sentiments have proliferated on social media since the distribution of the first tranche [8].

The inadequacy of celebrated models of poverty-targeted social assistance

These confusions and tensions show how the pursuit of genuine universalism within an existing stratified, fragmented and residualist social protection system presents major in-built challenges for advancing beyond moments of crisis. While the Philippines has been able to roll out a massive emergency social protection response to the COVID-19 lockdown, with near-universal coverage of possibly more than 90 percent of the population, reliance on the existing institutional infrastructure has had the effect of fostering social hostilities and potentially quelling support for such universalism among the population.

This is particularly significant given that the flagships of this infrastructure – the Pantawid and the Listahanan – have received huge support from international financial institutions and successive governments for 13 years prior to the pandemic and have been promoted as models up to the crisis, yet they have proven to be utterly inadequate for identifying systemic vulnerabilities at such a crucial time as the pandemic. The enormity of need engendered by the COVID-19 crisis evidently pushed the government to go beyond its conventional focus on poverty-targeted social assistance. As it scrambled to do this, it mostly bypassed the targeted system that had been so carefully groomed and adulated by donors, which has been neither fit for the purpose of actualizing universalistic aspirations, nor politically facilitative for their perpetuation.

Emma Lynn Dadap-Cantal is a PhD student at ISS. Her dissertation is a comparative case study of the political economy of social protection in Cambodia and the Philippines, with particular emphasis on the role of external donor influences in shaping the social protection systems in these two countries.

Andrew M. Fischer is Associate Professor of Social Policy and Development Studies at the ISS and the Scientific Director of CERES, The Dutch Research School for International Development. Since 2015, he has been leading a European Research Council Starting Grant on the political economy of externally financing social policy in developing countries. He tweets at @AndrewM_Fischer.

Charmaine G. Ramos is a Lecturer at Leiden University College, Leiden University, The Netherlands. Her current research focuses on analysing social policy and resource governance, as a means for exploring how political economy dynamics constrain and structure institutions for social transformation and productive expansion in developing economies.

Endnotes

[1] Memorandum No 1, Series 2020

[2] This work builds on our ongoing research that we have been conducting since 2015 into the political economy surrounding the institutional evolution of the Philippine social protection system, as part of ERC-funded research project entitled ‘Aiding Social Protection: The Political Economy of Externally Financing Social Policy in Developing Countries’ (grant agreement No 638647). Our current research on the COVID response has been based on deskwork ¬– by necessity given that all three authors have been in lockdown in Europe – and has involved the collection and analysis of official documents (including relevant laws, presidential reports, and other administrative edicts) and media coverage concerning the Philippine government social protection responses to the pandemic, and selective remote interviews with  social workers from the Department of Social Welfare and Development (DSWD) who have been involved with the COVID-19 response at various levels of government.

[3] SAP Monitoring Dashboard.

[4] See here  and here.

[5] Cf. Fischer 20182020ILO, 2017Rutkowski, 2020.

[6] The rampant inaccuracies of the Pantawid are detailed in our forthcoming article currently under review. Also see Kidd and Athias (2019).

[7] For instance, see here.

[8] E.g., see viral posts on Facebook like this and news reports like this.

This article was originally published on the International Institute of Social Studies’ (ISS) blog on Global Development and Social Justice, Bliss. Image Credit: Asian Development Bank on Flickr

COVID in Pakistan, the Role of Middle-Classes and the Unprecedented Demand for a New Social Contract

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A conversation with and Dr. Juvaria Jafri and Dr. Aasim Sajjad.

Aasim Sajjad Akhtar is Professor of Political Economy at the National Institute of Pakistan Studies, Quaid-e-Azam University and a founder of the Awami Workers Party (AWP).  His research has focused on state theory, informality, colonial history, rise of the middle classes and social movements in Pakistan. His latest book is ‘The Politics of Common Sense: State, Society and Culture in Pakistan’.

 Juvaria Jafri is a Lecturer in International Political Economy at City University. Her research is on financial development in Pakistan, including inclusive finance, fintech, and impact investing strategies. Her latest co-edited book is ‘Geofinance between Political and Financial Geographies: A Focus on the Semi-Periphery of the Global Financial System.’

Introduction

The full impact of the COVID-19 pandemic on developing countries is still unfolding. While many countries have managed to achieve some stability in eliminating the spread of the crisis, others are struggling on various fronts. In South Asia, India has received much global attention owing to the violence of a hasty lockdown which was imposed without warning and an accompanying social safety net. Other countries in the region including Bangladesh, Srilanka and Nepal also continue to grapple with the existential question of how to ensure that contagion control does not come at the expense of destroying livelihoods. 

In this interview we focus on the situation in Pakistan. We invited Aasim Sajjad and Juvaria Jafri to address some questions related to the current situation in Pakistan. The following four questions were designed to provide a glimpse of how the pandemic is impacting the existing socio-economic structure of the Pakistani economy particularly focusing on class inequality, fin-tech as a potential solution and the activist and citizen-led first historic demand for a long-term welfare package. 

Read More »

Privatization and the Pandemic

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By Jacob Assa and Cecilia Calderon

Unlike other epidemics or pandemics – such as tuberculosis, SARS, MERS or HIV/AIDS – COVID-19 has hit hardest at the world’s wealthiest countries. As of early June 2020, the 37 industrialized countries of the OECD accounted for 59% of all cases and 78% of deaths, even though they constitute less than 18% of the total population affected.

Looking at the pandemic’s effects in another way – using cases and deaths per million population – paints an even starker picture. OECD countries have a prevalence ratio of 2,890 cases per million and a mortality rate of 225 per million, compared with 869 cases and 51 deaths per million in the rest of the world. Furthermore, the case fatality ratio (CFR) – the ratio of deaths to cases – is also higher in the OECD (7.8%) than in the rest of the world (5.9%).

What can explain this phenomenon, the world’s richest countries impacted more than middle-income and poor countries?  One explanation is that COVID-19 spreads faster in countries that are more integrated to the globalized economy, as the OECD members certainly are. A recent study found that globalized countries have indeed experienced more cases per population, but less mortality.Read More »

Addressing the Pandemic in the Philippines Necessitates a New Economic Paradigm

Rodrigo_Duterte_delivers_his_message_to_the_Filipino_community_in_Vietnam_during_a_meeting_on_September_28In his late-night Talk to the Nation on COVID-19 on 6 April, Rodrigo Duterte, the populist President of the Philippines, echoed the affirmation of leaders from rich countries in North America, Europe, and Asia: to do “whatever it takes” for the economy to survive the pandemic. The problem, however, is that, on his own admission, Duterte is incompetent in economics. His stubbornly militaristic mindset and police-centric approach to governance is even more problematic when dealing with complex developmental causes and impacts of the coronavirus outbreak.

Yet the Philippine state’s inadequate institutional capacity to respond to the epidemic goes deeper. Given the national economy’s position in the hierarchical global economic system, its structural weaknesses impacts on how effective the government’s response can be. The current mainstream approaches to resolve the pandemic and the multiple crises of capitalism would fail to address the convoluted historical process of maldevelopment of the Philippines. Thus, a radical political strategy with a new economic paradigm for post-pandemic reconstruction is needed.    Read More »

Pandemic Discourses – A Global Contagion Demands Global Perspectives

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By Sakiko Fukuda-Parr, Manjari Mahajan, and Mark W. Frazier

As the inaugural issue of Pandemic Discourses goes online, 4.7 million cases of COVID-19 and nearly 320,000 deaths have been recorded by the World Health Organization. The waves of cases and deaths have been closely followed by mounting economic losses, leaving governments, communities, and individuals scrambling to find appropriate responses. Yet, even in this uniquely global moment, popular discourse around the pandemic has remained trapped within familiar terms.

Media coverage has to a large extent focused on experiences of the United States and Europe. The frameworks developed to respond to the pandemic have also been US/Euro-centric, frequently inward-looking and isolationist, paying scant attention to expertise, knowledge, and capacities elsewhere. The experiences of other parts of the world, even when taken into account, often serve to cement prior prejudices. In response to this lopsided discussion, Pandemic Discourses aims to foster a more expansive dialogue that encompasses voices from the global South, including China, India, and beyond.Read More »

The COVID-19 Distraction and Brazil’s Environmental Cliff

Amazon RainforestBrazil faces boiling social unrest. An institutional crisis breeds entropy into an already stressed social system fraught with inequality, increasing poverty and an escalating number of deaths from coronavirus. 

A few days ago, despite another daily mass body count, the country stopped to watch the footage of a 22nd April meeting with President Bolsonaro’s cabinet. The tape release was commanded by a Supreme Court judge in an inquiry into an alleged interference by Bolsonaro in the Brazilian federal policy to protect one of his sons, currently under investigation.

The footage is horrendous to the democratic sensitivities and bitter to any political or civic taste. But I would like to point out one single intervention in the meeting that speaks to the country’s entrapment into its own version of ‘fail-forward’ neoliberalism. It reveals a government fixated in dismantling any piece of State regulation and privatizing any available company owned by the State. 

Philip Mirowski has argued in his 2013 book Never Let a Serious Crisis go to waste that cognitive dissonance boosts neoliberal thought to the point that no countervailing evidence can shake its disciples’ convictions of its ultimate truth. No matter how apocalyptical a crisis may seem, there is always reason to blame government intervention for all evils plaguing the Earth. Read More »

The return of State planning

brasilia-2448030_1280Conventional economics is notorious for having created a highly persuasive analytical toolbox. The challenge of this stream of the profession until the 1960s was to prove the logical possibility that the market could not only coordinate the entire economy, but also keep it stable at that single point of optimum equilibrium. In order to boast the wonders of decentralized market exchange, the theory paradoxically invoked the metaphor of a “benevolent social planner”.

A growing list of circumstances in which markets fail to generate the optimal societal outcome (externalities, coordination failures, and so on) raised the academic premium for sound justifications for avoiding State interventions in the economy. Government failures – it was, and still is, claimed – could be even worse than those of the market.

The theoretical vilification of the State’s performance matched the emerging political philosophy in the early 1980s. Despite the enormous State apparatus created after the Second World War, from 1980s onwards, government functions were gradually reduced to the subordinate role of supporting the private sector. To paraphrase Keynes: neoliberalism won over the West as the Holy Inquisition conquered Spain. Western society surrendered to market dominance, shrinking State capacity despite the achievements of the three decades of postwar Keynesian policies, which generated the highest world growth rates in modern history. 

One of the blindsides of the drastic downsizing of the State observed after 1980s is severely limiting its capacity to respond whenever needed. The COVID-19 epidemic made this very clear. Countries that fell for the neoliberal spell faced a flagrant difficulty in organizing an efficient response to a looming healthcare crisis, thus rekindling a debate about the way in which the State operates in society. Read More »

Financing Needs of Developing Countries in the wake of Covid-19: The Role of Special Drawing Rights

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Since the outbreak of the Coronavirus, developing countries have been exposed to massive withdrawals of capital flows. In this post, I unpack the financial challenges these countries are facing and consider what role the Special Drawing Rights (SDRs) of the IMF can play in easing the burden. 

According to the calculations by the Institute for International Finance (IIF), investors withdrew almost $80 billion over recent weeks from emerging markets (Wheatley 2020). During periods of crisis, investors ‘fly to safety’ by selling risky assets and purchasing safe assets such as US Dollars and the US Treasury Securities. As international investors flee to dollars amidst the financial turmoil caused by the Coronavirus, there is an acute concern that low and middle-income countries will be short of dollars. Furthermore, the scale of the withdrawal suggests that these countries will face great difficulty in raising funds for their sovereign debt payments. Besides governments, firms based in developing countries are also expected to face difficulties in raising foreign currency-denominated debt in international capital markets. Meeting this growing demand requires a global lender of last resort that can provide dollars on request. Within the existing global financial order, the Fed and the IMF are two major organizations that are capable of meeting this demand. 

The Fed can provide dollar liquidity through swap lines, which allows global central banks access to dollars in exchange for their own currency with the promise that the principal, as well as the interest, will be paid later. When engaging in a swap operation, the Fed provides dollars to the recipient central bank for an equivalent amount of their currency at a given market exchange rate. After a certain period, the two central banks resell to each other their respective currencies at the initial exchange rate. The recipient central bank provides the dollars to financial institutions in its jurisdictions at the same maturity and rate. This way, swap lines provide dollar liquidity to recipient countries’ central bank and financial institutions (Bahaj and Reis 2018).Read More »