BEHIND THE SCENES

by Alfred Dizon

A recent survey of the World Bank revealed that the coronavirus disease (COVID-19) pandemic has brought adverse impact on businesses in the Philippines such as double-digit decline in revenues and temporary and permanent closures, which compelled many firms to let go of their workers or reduce their wages.
    The World Bank’s Philippines COVID-19 Firm Survey — conducted from 7 to 14 July — disclosed that of the 74,031 firms reported a “deep reduction in sales revenue” despite the easing of community quarantine in June.
    “Reported sales revenue has gone down by 64 percent on average between April and July 2020, with 89 percent of firms reporting a continued reduction in sales,” the multilateral lender said.
    It can be remembered that the Philippine economy was in a standstill during the latter part of the first quarter due to the implementation of strict quarantine measures — the enhanced community quarantine (ECQ) in Metro Manila and other high-risk areas from 17 March to 15 May  — followed by a modified enhanced community quarantine (MECQ) until 31 May.
Following the strict lockdowns, it was downgraded to general community quarantine (GCQ) on 1 June but Metro Manila and four other nearby provinces were reverted to the stricter MECQ from 4 to 18 August.
    With the lockdowns, the World Bank survey found that 40 percent of firms reported temporary suspension of their operations — 20 percent by government mandate and 20 percent voluntarily, while about 15 percent of firms reported to have closed permanently.
    “This indicates that COVID-19 community quarantine measures had a significant temporary and permanent impact on firms’ operations,” the World Bank said, adding that the negative impact of the COVID-19 pandemic is also extensive as one out of two firms reported to have reduced payments to employees, while close to half or 48 percent said they have narrowed the number of their employees.
    “The rest maintained the level of employment with only one percent reporting new employment,” the World Bank said.
    The Philippines’ unemployment rate was at 10 percent in July — equivalent to 4.6 million adult Filipinos without jobs — but it is a slight improvement from the record-high 17.7 percent unemployment rate in April, equivalent to 7.3 unemployed adults.
“Firms expressed a high degree of uncertainty and general pessimism about their operations, sales and employees for the next three months,” the World Bank said.
    “Such lack of confidence will likely limit additional investment and employment, restraining firms’ growth. These suggest that business activities are expected to stay subdued for an extended period,” it added.
    Similarly, results of the Bangko Sentral ng Pilipinas’ Business Expectations Survey showed that the business sector’s sentiment on the economy fell to its worst since 2009 at a confidence index of -5.3 percent for the third quarter.
    The World Bank also noted that almost two thirds of firms turned to digital solutions for sales, marketing, and payment methods to adapt to the “new normal.”

    Amid allegations that the 2021 national budget deliberations are derailed by some lawmakers at the House of Representatives, the Palace reiterated Monday that President Rodrigo Duterte wants the proposed P4.5-trillion appropriations signed in December.
    In a press briefing, presidential spokesperson Secretary Harry Roque renewed his call to lawmakers not to delay the passage of the national budget which contains funds for the government’s pandemic response, saying the Chief Executive does not want a reenacted budget.
    “The President does not want a reenacted budget. The budget must be signed by the month of December so it would be effective on 1 January,” Roque said.
    His remarks came after Negros Oriental 3rd District Rep. Arnulfo Teves said that budget deliberations in the Lower Chamber are being “railroaded” by the allies of House Speaker Alan Peter Cayetano.
    Cayetano is locked in a leadership dispute with Marinduque Rep. Lord Allan Velasco, who is supposed to take over as Speaker as part of the 15-21 deal brokered by the President but which Cayetano no longer wants to honor.
    In an interview with ANC, Teves added that supporters of Speaker-in-waiting Lord Allan Velasco are being muted on plenary sessions via teleconferencing app Zoom.
    The proposed budget, which carries the theme “Reset, Rebound, and Recover: Investing for Resiliency and Sustainability,” was submitted by the Department of Budget and Management to the Congress in August.
    However, the leadership dispute between Cayetano and Velasco appears to threaten the passage of the budget bill.
    In a Facebook video late Friday, Velasco accused Cayetano of “political maneuverings and theatrics” which, according to him, took the budget deliberations “hostage.”
    Duterte is expected to deliver a public address Monday night which would mark his first public appearance since his meeting with Cayetano and Velasco last week.
    The President scheduled a meeting with Velasco in Malacanang on Monday night.
    This was after he met with the two lawmakers last Tuesday in a bid to resolve with finality the speakership row as Cayetano’s supposed 15 months in power would end this month and Velasco would take over.
    Sources said that Duterte supposedly gave his blessing to Velasco to takeover the House’s top post on 14 October, but this was disputed by Cayetano and his allies.
    Last Wednesday, Cayetano offered to resign — a move rejected by lawmakers who voted 184-1 with nine abstentions.
    Velasco’s camp claimed that it has the number to support Velasco’s speakership.