The Philippines went through a lot in Q4 2020. Not only did the people have to worry about the rising number of COVID-19 cases, but the effects that natural disasters brought upon those affected was another area that required immediate attention.
Typhoons such as Quinta, Rolly, and Ulysses caused mass destruction in the areas that it had affected. Add in the restrictive measures brought about by COVID-19, and it became even harder to recover from these damages.
To name a few, Typhoon Quinta, Typhoon Rolly, and Typhoon Ulysses were the most destructive typhoons of the year (OCHA, 2021). 50,000 farmers and fishermen were deeply affected by the destruction brought about by these disasters. 145,777 metric tons of agricultural goods were wiped out by Typhoon Quinta — of which are estimated to be worth PHP 2.56 billion. Typhoon Rolly’s damages were estimated to be worth PHP 2 billion, wiping out 116,962 metric tons of goods (Rivas, 2020).
Looking at the national income accounts, Q4 GDP growth proved to be much better as opposed to those from Q3. With the easing of restrictions and seasonal spending, GDP growth rose from -11.4 percent in Q3 to -8.3 percent in Q4. Looking at the full-year GDP growth, the economy was said to have declined by -9.5 percent — a number that was on the lower end of the government’s target range. According to NEDA, this is the largest annual decline since the 1946 series (NEDA, n.d.).
Following that the Philippines met the lower end of the target range, the country continues to lag behind its fellow Asian neighbors. Countries such as China and Vietnam saw expansions, with real GDP growths at 6.5 percent and 4.5 percent respectively. Following the demand aspect of the economy, the Q4 GDP was mainly driven by improvements in private consumption and investments.
Looking into the employment situation during October, the labor force participation rate has declined by 3.2 percent in comparison to July 2020’s data. This was marked as the second-lowest rate recorded, with April 2020 being the lowest at 55.7 percent. 58.7 percent or 43.6 million Filipinos were recorded as either employed or unemployed according to the PSA. On the bright side, the unemployment rate continued to see a decline, dropping to 8.7 percent in comparison to July’s 10 percent and April’s 17.6 percent. In particular, NCR was reported to have the highest unemployment rate at 12.4 percent. It is this region, in particular, that is one of the most affected areas by the pandemic (PSA, 2020).
Asides from looking into the Q4 2020 situation of the economy and employment, how has the pandemic affected badly hit members of the nation, in particular, low-income families? There are two particular areas in which low-income families were affected by the spread of the virus; children of these families had to undergo adjustments with regards to how their education was being delivered to them and there was a decrease in the children’s visits to healthcare facilities.
Children of low-income families faced many barriers when faced with the struggles brought by distance learning. There was a lack of resources, students struggled to understand the modules that they were given, and it was difficult for children to maintain a level of focus needed when studying the given material (The World Bank, 2021). While it is not just children from low-income families that struggle to learn during this setting, they are the most affected as they do not have the necessary resources that could aid them in their learning during this pandemic.
Following the contractions seen in the previous quarters (Q2 and Q3) of the year 2020, Q4 has seen an improvement in numbers, especially in the national income accounts. With the ongoing roll-outs of vaccines this 2021, this could be the solution that we have been waiting for since the start of the pandemic — not just for the health and safety of the people, but for the well-being of the economy, laborers, and students as well.
NEDA. (n.d.). REPORT ON NATIONAL INCOME ACCOUNTS (Q4 2020). https://www.neda.gov.ph/wp-content/uploads/2021/02/Report-on-National-Income-Accounts-Q4-2020.pdf
OCHA. (2021, January 15.) Philippines: 2020 Significant Events Snapshot (As of 14 January 2021). https://reliefweb.int/report/philippines/philippines-2020-significant-events-snapshot-14-january-2021
PSA. (2020, December 3). Employment Situation in October 2020. https://psa.gov.ph/content/employment-situation-october-2020
Rivas, R. (2020, November 3). Quinta, Rolly wipe out P4.6 billion in agricultural goods. Rappler. https://www.rappler.com/business/agriculture-damage-quinta-super-typhoon-rolly-november-3-2020
Venzon, C. (2021, January 28). Philippines GDP shrinks 9.5% in 2020, worst since 1947. Nikkei Asia. https://asia.nikkei.com/Economy/Philippines-GDP-shrinks-9.5-in-2020-worst-since-1947
The World Bank. (2021, April 22). How COVID-19 affected low-income families in the Philippines (October 2020). https://www.worldbank.org/en/news/infographic/2021/04/22/how-covid-19-affected-low-income-families-in-the-philippines-october-2020
By Cheska Firmalo
It is no secret that the Philippines suffers from the problem of plastic pollution. Despite the passing of the Solid Waste Management Act in 2001, landfills and litter on streets are commonplace. With the country being a signatory to several environmental agreements, there is little initiative when it comes to sustainable development (Ecological Solid Waste Management Act, 2000 and DENR, n.d.). The Philippines’ title of being the world’s third largest contributor to ocean plastic is indicative of the many issues that the country faces with regard to not only plastic, but the larger problem of environmental sustainability and waste management (Porcalla, 2018)
All In One Direction
The current model of the linear economy has incentivized big corporations to excessively extract natural resources such as water, metals, and oil to manufacture materials and products such as plastic without a care for the environment. With the goal of endless economic growth, sustainability and resource management are set aside at the cost of the environment and the communities that depend on it (Whittaker, 2019). The excessive extraction of natural resources and the production of waste has resulted in numerous man-made disasters in history, such as the Marcopper mining disaster (Dizon, 2019). It is also a large contributor to environmental pollution, the destruction of ecosystems, and the climate crisis that we are experiencing today. Given that the world’s producers and manufacturers are the ones providing virtually everything we use in our daily lives, this linear mindset trickles down to individual lifestyles, thus systematizing the linear economy and way of living. There seems to be no way out.
Going Around In Circles?
Photo from the Ellen MacArthur Foundation, taken from the World Economic Forum report on Circular Economy
Big problems require big solutions. In contrast to the linear model, the circular model has no beginning or end. It started gaining traction in the 1970s, forwarded by scientists, designers, and businesses who wanted to find creative, nature-based ways of tackling our waste problem. Several approaches have been developed, such as the Cradle to Cradle, Performance Economy, Biomimicry, Industrial Ecology, Blue Economy Systems, and Natural Capitalism (Ellen MacArthur Foundation, n.d.). The goal of these ideas is to “close the loop” between two cycles: the biological cycle (natural processes that provide resources for the economy) and the technical cycle (the recovery and restoration processes of goods and components). Doing so will create an effective, sustainable economy that will benefit both large and small organizations, businesses, the environment, and society (Ellen MacArthur Foundation, n.d.)
According to the Ellen MacArthur Foundation, there are 3 general principles to the circular economy:
The circular model is a way for us to align our world and our lifestyles with the way the Earth has been taking care of itself for the past million years. In the same way things grow, live, and die to be used as nutrients for the soil, we have to design our lives and businesses in a way that we produce as little waste as possible and feed back into the natural resources that we use to manufacture our daily items. This looks like companies using renewable energy, producing green packaging, clothes and shoes made from ocean trash, and appliances with parts that can easily be repaired (Ellen MacArthur Foundation, 2011). Since these businesses provide us with our needs and almost everything we can buy, it is important to hold them accountable so we can have eco-friendly change be doable for all people.
The circular model shows that everyone, from companies to individuals, has a role to play in taking care of the planet. In the Philippines, we can see how businesses have helped to turn the tide for sustainability. Startups such as The Plastic Flamingo and Humble Sustainability help divert trash by collecting plastic (and virtually anything non-biodegradable, for Humble) to use in creating new products (The Plastic Flamingo, n.d. and Humble Sustainability, n.d.). Another successful social enterprise, Rags2Riches, works with community artisans to create handwoven bags and accessories out of scrap fabric, while also providing them financial opportunities and jobs (Santiago, 2020). Unilever Philippines has also made much progress, using recycled plastic in their product packaging and collecting plastic sachets with the help of paid junk shops and waste workers (GMA News, 2020). While these are all admirable initiatives, these still need to be institutionalized for circularity to be made accessible for all people, nationwide. There is a long way to go and we need institutional change, especially from the government, but this doesn’t mean all our efforts are to be thrown away. From small change comes collective action.
An Act Providing for an Ecological Solid Waste Management Program, Creating the Necessary Institutional Mechanisms and Incentives, Declaring Certain Acts Prohibited and Providing Penalties, Appropriating Funds Therefor, And for Other Purposes . Rep. Act No. 9003, (January 26, 2001) (Phil.).
Department of Environment and Natural Resources (DENR). (n.d.). International Agreements on
Environment and Natural Resources. https://intl.denr.gov.ph/mulitlateral
Dizon, N. (2019, April 3). The Marcopper disaster: A tragedy that continues in people’s
veins. MiningWatch Canada. https://miningwatch.ca/news/2019/4/3/marcopper-disaster-tragedy-continues-people-s-veins
Ellen MacArthur Foundation. (2013, November). [Diagram of Circular Economy System].
World Economic Forum. https://reports.weforum.org/toward-the-circular-economy-accelerating-the-scale-up-across-global-supply-chains/from-linear-to-circular-accelerating-a-proven-concept/?doing_wp_cron=1588414993.1683869361877441406250
Ellen MacArthur Foundation. (n.d.). Circular economy: schools of thought.
Ellen MacArthur Foundation, “Explaining the Circular Economy and How Society Can
Re-think Progress | Animated Video Essay,” YouTube, August 29, 2011, https://youtu.be/zCRKvDyyHmI.
Ellen MacArthur Foundation. (n.d.). What is a Circular Economy? Retrieved April 28, 2021,
GMA News. (2020, November 26). Unilever makes progress on its sustainable packaging
goals. GMA News Online. https://www.gmanetwork.com/news/cbb/content/765775/unilever-makes-progress-on-its-sustainable-packaging-goals/story/
Humble Sustainability. (n.d.). FAQs. https://www.humblesustainability.com/faq
Porcalla, D. (2018, June 15). Philippines 3rd largest contributor to ocean plastic.
Santiago, G. (2020, September 9). Meet Rags2Riches, the ethical fashion brand from the
Philippines that’s got everyone talking. Causeartist. https://causeartist.com/meet-rags2riches-the-ethical-fashion-brand-from-the-philippines-thats-got-everyone-talking/
Whittaker, A. (2020, April 26). What is linear living, what is circular living? Circular Living
Why we are different — The plastic flamingo. (n.d.). The Plastic Flamingo.
The Philippine Economy and the Peso
By Patrick Ang
Before the pandemic, the Philippines had one of the best economies in Asia. According to the International Monetary Fund (2020), the country’s economy grew by an average of 6.3 percent in the past decade. This development, though, was capped for years because of the different limitations present in the country’s technology, government policies, and infrastructure at the time.
The government noticed this situation and started implementing the Build, Build, Build program as a way to counteract this (International, 2020). The added expenditure because of this was expected to bring the economy of the Philippines to a much greater height. New infrastructures concerning transportation and telecommunications are some of the key projects indicated in the report. Unfortunately, the pandemic had halted some of these constructions temporarily with the Philippines undergoing quarantine in 2020.
The result of the quarantine did not just delay the potential effects that the Build, Build, Build program was supposed to have on the economy but also threw the country to an immediate contraction. Based on the Philippine Statistics Authority (Gatpolintan, 2020), the Gross Domestic Product dropped substantially in 2020 when the quarantine was imposed. As seen in the graph below, the growth rate per quarter started to drop heading into the first quarter of the year before ultimately falling to a -16.9 percent contraction in the next quarter.
While the numbers have slightly risen afterward as the economy slowly recovered, the percentages still dwelled in the negative region. The -9.5 percent average in 2020 (PSA, 2021) is concerning, especially when being compared to the 6.3 percent average in the past three years as seen in the graph below (Economy, 2018).
However, it is important to note that the Philippine Peso has gone in the opposite direction when compared to the GDP of the country at the start of 2020. According to the historical record of Marketwatch (n.d.), the local currency has continued to rise with respect to the United States Dollar as the last quarter of 2020 tallied an exchange of PHP 48.01 to USD 1.00. While the exchange has been dropping since Q3 of 2018, it is not until the start of 2020 that the USD has dropped in three consecutive quarters.
The United States though had experienced a rough year which might explain the Peso strengthening once more in 2020. The pandemic has left the US as one of the most gravely affected countries in the world in terms of infection and casualties (John, n.d.). Likewise, civil unrest due to various protests in the country made it even harder for businesses to cope with their current situations. One could also attribute the movement of the exchange to investor sentiments especially with a Presidential election that had two very different leaders running for the position. The first two months of 2021 saw the USD recovering a bit with the exchange rising to about PHP 48.67 as of the time of this writing which sort of backs the latter reason.
Regional currencies have also been very similar in the direction of their movements last year, which may prove that the stronger Peso is a result of an external factor. While Oxford Economics (de Vera, 2021) projected the continued rise in the Asian currency exchanges to the USD in 2021, the graph below illustrates some of the neighboring Southeast Asian countries tallying very volatile exchange rates over the past year (O’Neill, 2021) while the Philippines and Vietnam recorded more stable movements in the market (Peso, 2020). This was very beneficial especially during the first quarter of 2020 for the companies in the Philippines. These heavily relied on foreign currencies to fund their operations as they did not experience that much of a shock following the lockdown.
Based on these figures, it is possible to account for the environment in the United States as one of the main contributors to the stronger Peso since the other countries in the region had similar movements. The question now, though, is why did the Philippines record a more stable exchange even if its GDP showed huge drops last year.
Finance Undersecretary and chief economist Gil S. Beltran mentioned that the country’s current account surplus may be the main reason for the more stable Peso (de Vera, 2020). Beltran states that as the country went into lockdown in the first half of 2020, imports have dwindled as well from the lowered demand. However, the country’s exports have continued which made the Philippines a net lender.* This resulted in the country having more foreign currencies and reserves in its pockets that offset its total foreign debt.
Finance Secretary Carlos Dominguez III explains that this is what made up for the lack of local demand in the economy (Peso, 2020). The stability of exports gave a cushion for the Philippines as well as the Peso to somewhat avoid the full gravity of the negative effects of the pandemic especially with the huge negative contraction in the 2020 GDP numbers. Alongside this, Dominguez outlines that the government has also been restarting projects like the “Build, Build, Build” which would help restore consumer confidence in the economy with more jobs and consumption. These are done in hopes to place the country’s economy back on track to overshoot its pre-pandemic numbers.
*ERRATUM: An earlier version of the article mentioned that the Philippines is a net exporter. We apologize for this oversight.
Asian Development Bank. (2020, September 15). Philippine Economy to Decline Further in 2020 Amid COVID-19, With Recovery in 2021. https://www.adb.org/news/philippine-economy-decline-further-2020-amid-covid-19-recovery-2021
de Vera, B. O. (2021, January 15). Further strengthening of peso vs US dollar seen in 2021. Inquirer.net. https://business.inquirer.net/315738/further-strengthening-of-peso-vs-us-dollar-seen-in-2021
de Vera, B. O. (2020, August 20). Peso strengthens as imports slow down. Inquirer.net. https://business.inquirer.net/305629/peso-strengthens-as-imports-slow-down
Gatpolintan, L. (2020, January 23). Timely budget passage to boost 2020 economic growth: Pernia. Philippine News Agency. https://www.pna.gov.ph/articles/1091794#:~:text=The%20Philippine%20economy%20expanded%20by,by%206.2%20percent%20in%202018
International Monetary Fund. (2020, February 6). The Philippines: A Good Time to Expand the Infrastructure Push. https://www.imf.org/en/News/Articles/2020/02/06/na020620the-philippines-a-good-time-to-expand-the-infrastructure-push
John Hopkins University of Medicine. (n.d.). COVID-19 Map. https://coronavirus.jhu.edu/map.html
MarketWatch. (n.d.). USDPHP | Philippine Peso Advanced Charts. https://www.marketwatch.com/investing/currency/usdphp/charts?mod=mw_quote_tab
O’Neill, A. (2021, April 1). Gross domestic product of the ASEAN countries from 2010 to 2020. Statista. https://www.statista.com/statistics/796245/gdp-of-the-asean-countries/
Philippine News Agency. (2020, September 1). Peso among Asia’s strongest currencies amid mild inflation. https://www.pna.gov.ph/articles/1114004
Philippine Statistics Authority. (2018, January 23). Philippine Economy Posts 6.6 Percent GDP Growth in the Fourth Quarter of 2017; 6.7 percent in 2017. https://psa.gov.ph/content/philippine-economy-posts-66-percent-gdp-growth-fourth-quarter-2017-67-percent-2017
Philippine Statistics Authority. (2021, April 8). PSA Releases Annual Revisions of the National Accounts of the Philippines. https://psa.gov.ph/national-accounts#:~:text=Philippine%20GDP%20posts%20%2D8.3%20percent,percent%20for%20full%2Dyear%202020&text=The%20Philippine%20Gross%20Domestic%20Product,year%20growth%20rate%20for%202020
The World Bank. (2019, October 10). Philippines Economic Update October 2019. https://www.worldbank.org/en/country/philippines/publication/philippines-economic-update-october-2019-edition#:~:text=Amidst%20rising%20global%20uncertainties%2C%20the,in%202020%20and%202021%2C%20respectively.&text=In%20the%20long%2Dterm%2C%20promoting,poverty%20reduction%20in%20the%20Philippines.]]>
By Euan S. Limon
It has been over a year since the COVID-19 virus infected the world. The pandemic shook every nation, bringing mass trauma far worse than the Second World War, as the World Health Organization stated (IANS, 2021). Like other countries, the Philippines suffered tremendously from the restrictions the pandemic caused. Within the sectors suffering from these restrictions in the tourism industry. The tourism industry contributes nearly 13% towards the country’s Gross Domestic Product in 2019 (Philippine News Agency, 2020). With a sector this big, how much was it affected by the pandemic?
According to the Department of Tourism (2021), visitor spending from visitor receipts in 2020 was only PHP 82.84 billion. Visitor receipts, also known as Tourism receipts, are expenditures from international inbound visitors (Knoema, n.d.). These expenditures include fees for national carriers in charge of transport, prepaid goods/services to be received in the visiting country, and on occasion, any receipts from same-day visitors. Visitor receipts plummeted by 82.94%, as 2019 tallied PHP 482.15 billion. Visitor receipts in January 2020 clocked in at PHP 45.35 billion, a 5.22% increase from January 2019.
What seemed like a good start was immediately put to a stop in less than a month when February 2020 only reached PHP 25.95 billion, a 42.80% decline compared to February 2019. March 2020 saw its decrease in visitor receipts nearly double, only amassing PHP 7.31 billion at an 82.65% drop. The remaining visitor receipts of 2020 consistently fell by almost 100% compared to the previous year – failing to reach the billion mark for the rest of 2020.
Figure 1 shows the contrast in the Philippines’ monthly visitor receipts during 2019 and 2020. The Philippines’ visitor receipts reached their peak in January 2020 and were the only month to outperform its 2019 predecessor. The monthly visitor receipts fell terribly during the early stages of quarantine, notably April 2020. It took until September 2020 for the monthly visitor receipts to rise constantly.
Figure 1: Philippines’ Monthly Visitors Receipts for 2019 and 2020 (in Billion PHP). Taken from http://www.tourism.gov.ph/industry_performance/2020/VisitorReceiptsReport2020.pdf
DOT (2021) also reported only 1,482,535 inbound visitors arrived in the Philippines. Visitors dropped at 82%, compared to the growing 8,260,913 inbound visitors in 2019. Like the country’s visitor receipts in January 2020, inbound visitors increased compared to January 2019 as it reached 796,164 visitors, a 10.06% increase. The decline also started in February 2020, where inbound visitors only recorded 462,681, a decrease of 39.67% compared to February 2019.
The Philippine government then imposed a travel ban halfway through March 2020 for inbound foreign visitors. Overseas Filipinos, foreign spouses or children, permanent resident visa owners, and diplomat visa owners were the only ones permitted to enter the country until August. Foreigners with long-term visas and former Filipinos were then allowed to enter the country, which yielded an influx of inbound visitors by the end of the year.
Figure 2 compares the monthly inbound visitor arrivals the Philippines had during 2019 and 2020. The monthly inbound visitor arrivals are directly related to the monthly visitor receipts from Figure 1 – with January 2020 having the highest number of visitors in both years. Inbound visitor arrivals dropped as 2020 went on due to heavy lockdown, with April reaching not more than a thousand inbound visitor arrivals. It took until September 2020 for inbound visitor arrivals to rise constantly until the end of the year.
Figure 2: Philippines’ Monthly Inbound Visitor Arrivals for 2019 and 2020. Taken from http://www.tourism.gov.ph/industry_performance/2020/VisitorArrivalsReport2020.pdf
The people in the tourism industry greatly suffered from the restrictions brought by the pandemic. In a survey conducted by PWC Philippines (2020) towards tourism-related businesses, most of their 247 respondents were forced to temporarily stop offering their products/services due to lockdown restrictions and a lack of demand for their products/services. Nearly 44% of these tourism-related businesses had to reduce their operations and lay off their employees to adapt during the pandemic.
The tourism industry is indeed essential for the country’s economy. Besides the fact the industry contributed 13% to the Philippines’ GDP in 2019, the industry also houses nearly 10.24 million employees as of 2019 (Statista Research Department, 2021). It would inevitably be affected negatively by the pandemic, given it is an industry that contains roughly 9% of the country’s population. The restrictions that come along with the pandemic prevents tourists from visiting the country. The industry suffers, as mentioned since it heavily relies on tourist traffic.
Numerous steps have been taken to promote relief towards the industry. Accommodations like hotels currently serve as isolation facilities for people undergoing mandatory quarantines. DOT commended hotels for this action, as hotels earn during the pandemic while providing isolation rooms (ABS-CBN News, 2021). DOT has also demanded the vaccine czar prioritize tourism workers in the A4 priority list (Arnaldo, 2021). Hotel and airport staff are the only ones included in the priority list, as of the moment.
The tourism industry would most certainly benefit the most from the vaccination of tourism workers. Their vaccination allows protection for the workers while they work. However, the industry’s condition would still depend mainly on tourists willing to visit the country. With the number of cases growing steadily every day, it would be challenging to convince tourists to travel to the Philippines. The country’s overall safety needs prioritization first before the country convinces foreign tourists to travel in the country.
The country’s tourism industry has a long road ahead to recovery from the setback the pandemic brought. Accounting for its PHP 317 billion loss for 2020 (Tabios, 2020) and a stricter lockdown due to a surge in COVID-19 cases, it might take some time for the industry to regain its footing and return to the old normal.
ABS-CBN News. (2021, April 06). DOT says 24 hotels turn 2,442 rooms into isolation facilities. https://news.abs-cbn.com/business/04/06/21/dot-says-24-hotels-turn-2442-rooms-into-isolation-facilities
Arnaldo, M. F. (2021, March 31). DOT urges vaccine Czar to include more Tourism workers in A4 priority list. Business Mirror. https://businessmirror.com.ph/2021/03/31/dot-urges-vaccine-czar-to-include-more-tourism-workers-in-a4-priority-list/
Department of Tourism. (2021). VisitorArrivalsReport2020 [PDF]. Retrieved from http://www.tourism.gov.ph/industry_performance/2020/VisitorArrivalsReport2020.pdf
Department of Tourism. (2021). VisitorReceiptsReport2020 [PDF]. Retrieved from http://www.tourism.gov.ph/industry_performance/2020/VisitorReceiptsReport2020.pdf
IANS. (2021, March 06). COVID-19 caused more mass trauma than World War 2: WHO. National Herald. https://www.nationalheraldindia.com/international/covid-19-caused-more-mass-trauma-than-world-war-2-who
Knoema. (n.d.). International tourism receipts. https://knoema.com/atlas/ranks/Tourism-receipts#:~:text=What%20is%20tourism%20receipts%3F,received%20in%20the%20destination%20country.
Philippine News Agency. (2020, June 22). Tourism industry hikes share in GDP to 13%. https://www.pna.gov.ph/articles/1106568
PwC Philippines. (2020, July). Impact of COVID-19 on the Philippine Tourism industry. https://www.pwc.com/ph/en/publications/tourism-pwc-philippines/tourism-covid-19.html
Statista Research Department. (2021, April 07). Travel and tourism’s direct contribution to employment APAC 2019 by country. https://www.statista.com/statistics/313632/travel-and-tourisms-direct-contribution-to-employment-in-asia-pacific-countries/
Tabios, H. (2020, November 12). PH tourism industry lost P317-B from Jan to Oct 2020. Manila Bulletin. https://mb.com.ph/2020/11/12/ph-tourism-industry-lost-p317-b-from-jan-to-oct-2020/
by Crescia Lactao
“The woman question” planted the roots of feminism in the human consciousness and essentially ignited the fight for equal rights among genders. Who knew a revolution and movement would spur from a simple question?
French scholars in history started questioning what exactly were the intellectual differences between the two genders and if this separation even existed. Centuries later, this woman question is answered (for most parts of the world). In the modern era, the social situation for women is rapidly changing for the better compared to years ago, but while navigating this new society that is transitioning from male-centered traditions and customs, gender concerns and other “woman questions” have also changed.
A brief history on feminism
A “brave man” is no different than a “brave woman.” The ideas of feminism can be traced back to as far as the 17th century when French philosophers argued that aside from the obvious differences in physical characteristics between males and females, there were no innate neurological differences between the two genders.
The fruits of this debate would become the basis of feminist thought and its concepts. Philosophers started to deconstruct presupposed gender differences that were considered a fact of human nature and were also used as justification for the unequal treatment between the two genders during that time. Much of the feminist debate focused on the nature of virtues and questioned if men and women differed in the expression of these virtues.
By the Enlightenment period and the 19th century, the social disadvantages and realities of women as a result of the patriarchy were brought to attention and studied further. The concept of individual freedom began to be applied in feminism, leading to the emancipation of women as the main topic of debate.
But the social, political, and legal liberation of women was not only the point of discussion. Feminine values, characterized by their appeal to emotion, and masculine values, characterized by rationality and detachment, were identified and clustered. In recognition of these gendered values, feminism argued that feminine values were in no way inferior to masculine values and instead served as an important complement to masculine values, and vice versa. In addition, the care work predominantly done by women as wives, mothers, or daughters in the household became recognized as significant public service. During this time, feminism as a belief system progressed to a liberal-individualistic set of ideas.
As feminism shaped the world, the ideology also evolved. The construction of the current feminist ideology is a result of accumulated ideas throughout history that have been reviewed repeatedly. The “woman question” that pondered on gender differences helped establish the points of feminism that justify and validate women stepping into bigger social and economic roles. The next women questions to ask are whether the ideals of feminism can match with reality — and how to ensure they can.
Now and then: Male-centered systems
The world was once male-centered, and though that is changing, there is still work to be done. While the principles for feminism have been established, male-centered systems and structures persist today and are yet to be dismantled.
Undeniably, the modern world has been kinder to women, granting economic work and education as a universal right. Global goals factor gender equality into their agenda such as Goal 5 of the Sustainable Development Goals. Women are allowed to pursue work other than reproductive work, like professional and economic work. Today, gender roles can be openly rejected. Some women object to taking over reproductive work and some men adjust to take over that mantle.
The world has come a long way from being explicitly and traditionally male-centered. Before, women barely had rights of their own, politically and socially. Their rights functioned behind the men in their lives — their father while growing up, then their spouse when they were married. Education for women was limited to housework and care work, so they barely had any presence in the academic field.
Now, feminism demands change in the hierarchy of ideas. Issues of gender that attack women directly like the objectification of women still exist, and patriarchal systems can still function, albeit discreetly. These systems could be expressed simply as a result of gendered expectations and biases, rather than explicit actions of misogyny.
According to Maria Sagrario Floro, a leading researcher in Feminist Economics, this hierarchy of ideas is even applicable to the discipline of Economics.
Together with her co-authors Lourdes Benería and Günseli Berik, Floro in her book Gender, Development, and Globalization critiques male-centered economics or the Homo Economicus that also acts as the mainstream analysis in economics.
Floro also lectured live last year December 4, 2020, in a research colloquium about Feminist Economics. According to her, economics is “male-centered” in terms of the premises or assumptions of its theories about human behavior, choices, and constraints. In other words, the mainstream economic theories tend to embody masculine values. However, as a result of the hierarchy of ideas that positions masculine values in the mainstream, female values in economic theories tend to be absent.
In mainstream economics, humans are assumed to be calculating, self-interested, and focused on building autonomy through their “optimizing behavior.” Mainstream economics mainly focuses on studying the exchange of goods and services and the process of efficient markets. The main economic concern is also growth-obsessed, which is emphasized and measured by the GDP.
While the male perspective has its benefits in ensuring progress, unfortunately, what is overlooked economically are the feminine values that would pay attention to the kinds of work that do not function under those assumptions such as unpaid care work that are typical to females. After all, unpaid care work contradicts the assumption of humans in economics as selfish and individualistic.
Mainstream economics studies profit-making work, which excludes the contributions of unpaid care work. Thus, care work is generally absent in the discussion of economic processes, concepts, and statistics. Simon Kuznet, for example, who developed the US National Income Account (NIA) in 1930 decided not to include care work when faced with the decision because it was too difficult.
Feminist Economics argues that the economic contributions of unpaid care work deserve its visibility and academic attention in the study of Economics. Ultimately, the labor force depends on unpaid care work to “maintain and sustain” their own productivity for the economy. Studies have also shown that there is an “intrinsic link” between unpaid care labor and wage labor.
Floro also believes that including unpaid care work is also “central” to understanding the female labor market. Including unpaid care work in economics could also acknowledge the reality of women who face the trade-off between care work and economic work. This could be the way to solve the lack of female visibility in labor force measurements or data collection.
The lack of female presence in early academic institutions and economic work could have set the current patriarchal hierarchy of ideas by default, and this reality has limited female presence in economics. While the feminist movement has gained worldwide traction, it is not an easy task to unlearn what was traditionally accepted.
Maybe Kuznet calling care work too difficult to measure is merely a symptom of this system at work. Maybe this time, a woman can try to take on that challenge.
Here are the resources I used for the article. Feel free to browse through them to learn more about Feminist Economics:
Becchio, G. (2020). A History of Feminist and Gender Economics. Routledge Taylor and
Benería, L., Berik, G., & Floro, M. S. (2016). Gender, development, and globalization:
Economics as if all people mattered (2nd ed.). Routledge Taylor and Francis Group.
Ateneo de Manila University: Department of Economics. (2020, Dec 4). Introduction to
Feminist Economics by Dr. Sagrario “Sergy” Floro [Video]. Facebook.
By the AEA Publications Team
Last week Friday, March 5, 2021, the Ateneo Economics Association (AEA) held its much beloved KamalAEAn talk. As AEA’s partnership talk with Ateneo’s Talakayang Alay sa Bayan (TALAB), KamalAEAn provides an avenue for economic discourse by inviting professionals to engage and educate Ateneans about the economic relevance in various nationwide issues.
This year’s talk was entitled “KamalAEAn 2021: The Road to Economic Recovery” and delved into economic challenges the Philippines has faced amidst the global pandemic as well as possible opportunities the nation can take to alleviate the recession. Featured in the talk were keynote speakers Mr. Ray Gomez of the National Economic and Development Authority (NEDA) and Ms. Zy-za Suzara of the Institute for Leadership, Empowerment, and Democracy (iLEAD), both of whom focused on government projects, programs, and budgets as pathways to economic recovery.
In the first half of the session, Gomez explained the current situation of the Philippines and gave some choice government projects enacted to revive the economy. By the end of 2020, the Philippines’ GDP had contracted by 9.5 percent, which is the lowest contraction since 1947. Looking at NEDA research regarding the average Filipino households, Gomez showed that during the pandemic there was an average income loss of PHP 23,000 per worker because of quarantine, with about 60 percent of parents foregoing 20 percent of their income to accompany their children through online learning. Overall, that equated to a total income loss of about PHP 1.04 trillion in 2020. Furthermore, while unemployment rates are slowly decreasing from their spike in early 2020, the Philippine Statistics Association showed that NCR unemployment showed little improvement under GCQ (15.8 percent at peak in 2020 to 12.4 percent by Q4) while areas outside NCR showed far more improvement (18.6 percent at peak in 2020 to 7.7percent by Q4). Despite the year that has passed, about 3.2 million people in the NCR are still hungry, largely due to the restriction of GCQ.
Despite all this bad news and the ongoing pandemic, Gomez highlighted the importance of the transportation sector to economic recovery. Because of the strict quarantine guidelines on travel, there is now less capacity to accommodate for social distancing. This leads to a shortage in transportation and a contraction in the transportation sector further hurts the economy. The reason transportation holds so much power over the economy is because transportation is involved in almost every sector of the economy and aspect of our lives: from providing public transport for workers to delivery for stores. With the importance of transportation in mind, Gomez shared a current ongoing project of the government, which is to invest in bike lanes that connect all around the NCR. The project, pushed by DOH, DPWH, DILG, and the DOTr, hopes to alleviate the transport shortage and reduce the number of vehicles on the road. This solution will not only help the economy recover by getting more people to the places they need to be, it will also help with the NCR’s air pollution, all while still being able to follow the social distancing protocols of the DOH.
With all this being said, Gomez emphasized the economic concept that “nothing is from Heaven” and “everything is a trade-off.” While the government’s response to the pandemic is far from perfect, Gomez highlighted that many people are working hard to heal the economy. There are many trade-offs that will have to be made and many obstacles that need to be faced. He closes with the message that to come up with solutions, we have to acknowledge the constraints in the immediate term while working on expanding them, and that to maximize impact, we need to give our best efforts. Don’t stop at what we need to do, but think of how we can do it.
The second keynote speaker of the evening was Ms. Zy-za Suzara of iLEAD, a policy think tank that focuses on public finance and good governance. In her presentation, Suzara also discussed the wounded state of the Philippines’ economy, as well as analyzed how the Philippines government responded to the crisis in terms of budget allocation.
To further expound on Gomez’s point, Suzara explained that in economics there are trade-offs, but we cannot trade health for economic recovery. Out of all the ASEAN countries, the Philippines so far has the slowest recovery rate. By April 2020, about 77 percent of firms in all sectors temporarily closed down, and by July 2020, about 15 percent of firms closed permanently. By February 2021, inflation was on the rise again with -4.7 percent. While the Philippines usually has OFWs as an economic safety-net, this time would not be the case as about 388,000 OFWs were repatriated over the course of the year. The question Suzara asks now is what programs has the government initiated to help the situation and is it effective in any way?
For the answers, she showed the General Appropriation Act (GAA) and the Bayanihan 1, 2, and proposed 3. The GAA 2020 allowed the government to appropriate the budget for 2020 to other pressing concerns related to the pandemic, while Bayanihan 1 and 2 gave special power and regulations to different sectors affected by the pandemic. Including the proposed Bayanihan 3, there has been a total pandemic response of Php 565 Billion. However, it is with the new budget for 2021 where Suzara points out that the government is scrimping on aid.
Suzara argues aid is disproportionately small compared to the scale of the economic crisis we are facing. For example, while Bayanihan 2 gave about Php 165.5 billion in relief, the real GDP losses in 2020 were Php 1,843 billion. Furthermore, the Social Amelioration Program is only good for two months and firms receive little to no aid, which will only make it harder for the economy to recover.
The most crucial analysis Suzara showed in the 2021 budget, which has the wrong priorities. In an overall view, the new budget has severe cuts for health and economic aid, and instead funds many policies that won’t address them, such as Build, Build, Build, corporate tax cuts, supercorporation, and the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC), the last of which received Php 16.44 billion. Furthermore, while many banks receive government help, there is still not much help for the average Filipino citizen. At this point, Suzara emphasizes the need for better fiscal policy over monetary policy, highlighting that fiscal stimulus is what’s needed to jumpstart economic growth.
Suzara continues her presentation by giving in-depth analysis of the entire 2021 budget. Entitled “Reset, Rebound, Recover,” the 2021 budget focuses too largely on infrastructure rather than sectors directly affected by the pandemic. For example the DOH budget decreased from Php 181 billion to Pho 135 billion. While there is additional support for livelihood and emergency employment, specifically for the Department of Labor and Employment Osec and the Overseas Workers Welfare administration, there is less assistance for MSMEs and the tourism sector. DepEd received a Php 16 billion increase in flexible learning options, this is still not enough to support online learning and there’s no specific budget item to prepare for safe reopening of schools. In the DOTr, funds that were initially put in subway projects have since been reallocated to aviation and maritime infrastructure, with little budget for service contracting PUVs and subsidies for displaced PUV drivers. More shockingly, Php 70 billion of funds for vaccines are parked in Unprogrammed Appropriations.
A bulk of the budget has strangely gone to infrastructure as reflected by the huge increase for DPWH, which received a 58 percent increase. There were also major funding increases in 2021 with 41 percent increase in local programs and 36 percent increase in Convergence and Special Support programs. What’s more astonishing is that the PNP and AFP budgets both received an increase, with the AFP Modernization Program receiving Php 2 billion. Suzara says that the roughly Php 20 billion used to end the insurgency could have been used for something more directly related to pandemic concerns and the economic recession the Philippines is experiencing.
Overall, Suzara showed that the budget does not reflect the current needs of the Filipino citizen. Her concluding message left the audience asking “What can we do as average citizens?” The answer she shared is for the students, specifically economics students, to learn about Fiscal Policy and take interest in the National Budget, remembering not only is the budget highly technically but also political. She challenged the students to analyze and understand the priorities of the government through their budgetary policy and make sound judgements on our current situation through this economic lens.
By Hanie Andrade
Ever since quarantine restrictions have eased with the lifting of ECQ, the state of the economy has generally improved. In comparison to the previous quarter, Q3 2020 showed better figures with regards to unemployment rates and GDP growth.
Employment during this period has statistically improved, with a lower unemployment rate and an increase in labor force participation. The unemployment rate was recorded to be 10 percent, 7.7 percent less than the previous quarter’s rate. An estimation of 4.6 millions individuals aged 15 and above were said to be unemployed. This is an improvement to April’s 7.3 million unemployed Filipinos. Adversely, the employment rate also increased to 90 percent, in comparison to April 2020’s 82.3 percent. While these figures prove to be better than the lowest economic period of the year, if compared to the employment data collected for July 2019, the current data is a representation of the vulnerability of employment during this pandemic.
The easing of restrictions and quarantine procedures are evident in the labor force participation rate (LFRP). During this month, the LFPR was recorded at 61.9 percent. As the ECQ was lifted last May, more employed individuals were able to actively participate in the labor market. If compared to the peak month of the ECQ, April 2020, 55.6 percent was recorded as the lowest LFPR in the history of the Philippine labor market. While it has increased, by gender, women had a lower rate as opposed to men. Women’s LFPR was recorded at 48.5 percent, whereas for men it was listed at 75.3 percent. This could be attributed to the possible job opportunities that have opened since the lifting of quarantine restrictions. What possible jobs are available for men but not for women? A few of these could be in the construction and transportation industry. Despite the disparity between the men and women’s LPFR, their employment rates both stand at 90 percent and their underemployment rate differ by 4.5 percent (with men being more underemployed than women). Taking into account the youth, the youth labor force participation rate of 38.9 percent for July 2020 has increased from 32.4 percent in April (PSA, 2020). The improvement in these figures are all linked to the ECQ and how our nation has transitioned to more lenient protocols with the General Community Quarantine.
Not only has the ECQ restricted millions of Filipinos to their homes, but it has also limited the capacity of the economy to grow. With its lifting, the GDP, one of the many indicators of economic growth, has statistically improved as well. During Q2 2020, our GDP was recorded to -16.9 percent, a record-breaking negative growth in decades. However, come Q3 2020, the national GDP increased to -11.5 percent. While this figure still represents a negative growth, it also represents an improvement. The top three actions that were involved in the increasing of GDP were: Financial and insurance activities, 6.2 percent; Public administration and defense, compulsory social activities, 4.5 percent; and Agriculture, forestry, and fishing, 1.2 percent.
Taking into account the GDP shares by Expenditure, Government Final Consumption Expenditure (GFCE) stood at 5.8 percent, while other shares still had a negative growth. Household Final Consumption Expenditure (HFCE), -9.3 percent; Gross Capital Formation, -41.6 percent; Exports, -14.7 percent; Imports, -21.7 percent. Similar to the Q2 2020 data, GFCE had the highest growth, with HFCE still at a negative path of growth. In a time of uncertainty, many are still cautious with where and how they spend their money, as evident in the HFCE data (PSA, 2020).
Despite the improvement in these figures, the economy is still struggling. Based on 2019 figures, about 99.5 percent of establishments in the country consist of MSMEs; Micro enterprises constitute 89 percent, Small enterprises constitute 10 percent, and Medium enterprises constitute 0.5 percent. Before COVID hit the economy, MSMEs shared 62.4 percent of the country’s total employment, and 60 percent of domestic exporters belong to the MSME category (DTI, n.d.). However, according to a paper released by the ADB, 70.6 percent of MSMEs were forced to temporarily close as a result of the pandemic. This study concluded that out of the four countries involved (including the Philippines), it is the Philippines that was the most affected by COVID with regards to its impact on businesses and households. It also had the highest percentage of temporary staff cuts at 66.2 percent, followed by Laos, Indonesia, and Thailand respectively. It is most important to note the financial condition of MSMEs. Between March and April, 36.7 percent said that they had no cash and savings, whereas 42.1 percent said they would run out of funds (cash) in a month (Rivas, 2020).
Philippines’ MSME financial condition statistics (represented by PHI). Taken from https://www.rappler.com/business/adb-study-philippines-closures-layoffs-peers-coronavirus-pandemic
As a way to address the decline in the Philippines’ economy, lawmakers have decided to make a bill that seeks to stimulate the economy. It is known as the Corporate Recovery and Tax Incentives for Enterprises or the CREATE bill. This bill is the second version of CITIRA and its goal is to improve fiscal incentives and at the same time, lowering corporate income taxes (CIT). From 30 percent, this bill seeks to reduce CIT to 25 percent for large corporations both local and foreign, whereas for small and medium businesses, it will be 20 percent given that they have a net taxable income that is below PHP 5 million and total assets less than PHP 100 million (Galang, 2021).*
Under CITIRA, the Philippines is imposing the highest CIT rate in ASEAN. This has taken a toll on MSMEs as many of them have been largely affected by the pandemic. Through the CREATE bill, with the reduction of CIT, government revenues are estimated to be reduced at around PHP 40 billion. This can then be used by enterprises, especially MSMEs, to continue to fund their operations during these trying times.
While the figures mentioned above show a visible sign of improvement from Q2 2020 data, the economy still has quite a long way to go before it is able to fully recover from the damage that this pandemic has caused. With the help of the CREATE bill and other actions taken by the government to improve our economic condition, despite the problems that we are currently facing, we are on the beginning of the road to economic recovery. However, it also important to note that while many are focused on stayed afloat during this pandemic, one should do so with COVID-19 preventive measures in mind.
* To read more about the details of this bill, you may visit this link: http://admuaea.org/2021/01/31/createing-relief-during-the-covid-19-pandemic/
This article is part 3 of the Philippine Economy Series.
Department of Trade and Industry. (n.d.). 2019 MSME STATISTICS.
Galang, B. (2021, February 13). CREATE-ing opportunities through better fiscal
incentives, lower corp taxes. CNN Philippines. https://cnnphilippines.com/news/2021/2/13/create-bill-explainer.html
Philippine Statistics Authority. (2020). Employment Situation in July 2020.
Philippine Statistics Authority. (2020). The Philippines records a GDP growth rate of -11.5
percent in the third quarter of 2020. https://psa.gov.ph/content/philippines-records-gdp-growth-rate-115-percent-third-quarter-2020
Rivas, R. (2020, September 16). PH with most business closures, layoffs vs peers
during pandemic – ADB. Rappler. https://www.rappler.com/business/adb-study-philippines-closures-layoffs-peers-coronavirus-pandemic
Tax Reform Department of Finance. (n.d.). Package 2: Corporate Recovery and Tax
Incentives for Enterprises (CREATE) Act. https://taxreform.dof.gov.ph/tax-reform-packages/p2-corporate-recovery-and-tax-incentives-for-enterprises-act/
by Crescia Lactao
Theory takes care of life in Doughnut Economics. Developed by Oxford University’s Kate Raworth in 2012, Doughnut Economics is a sustainable development theory and framework visually modeled as two concentric circles, hence the dub “doughnut.” To discuss Doughnut Economics and its significance today in the Philippine context, AEA organized a Zoom seminar last February 24, 2021, with speakers from the Ateneo faculty.
The theory of Doughnut Economics
To start the talk, Mr. Genesis Lontoc, a professor from the Department of Economics, tackled different classical development perspectives and criticized its addiction to economic growth and lack of accountability. According to him, traditional views of development “overlook its impact on humanity, society, and environment.”
Doughnut Economics approaches development differently. Its model recognizes the needs or life essentials of humanity through the twelve social foundations, and it wants to ensure the universal accessibility of these needs. Ideally, all of the life essentials of the entire population are provided, and no one is deprived of these needs.
The theory accepts that the consumption of planetary resources is necessary to achieve this vision, but it also outlines the boundaries of consumption in the form of the ecological ceiling. The ecological ceiling details the effects of excessive consumption on the environment such as ocean acidification or pollution.
Doughnut Economics addresses the trade-offs of economic activity to humanity and the environment and ensures accountability for these trade-offs by calling for regenerative measures like waste management.
Lontoc further explained the doughnut as a guide for development. “The key to development [in Doughnut Economics] is if the economy operates within the doughnut.”
Not beyond the crust where economic activity above the ecological ceiling would lead to environmental degradation nor at the core, below the social foundations, where life essentials of the population are not provided or accessed by some.
Development in the doughnut, compared to the carefree growth of classical perspectives, ensures “balanced growth,” and it reminds economic activity to be more “intentional.”
“What use is GDP growth if it is not felt by others?” Lontoc asked the audience.
While Mr. Lontoc explained Doughnut Economics as a theory, Mr. Skilty Labastilla from the Department of Interdisciplinary Studies provided concrete examples and applications of the framework and imagined ways it could be utilized in a local context.
He compared the doughnut frameworks between the US and the Philippines, which highlighted stark differences between the economic giant and the country.
US (left) and Philippines (right) Doughnut Frameworks. Taken from https://goodlife.leeds.ac.uk/countries/#United%20States
Both frameworks are evident of the contrasting results in the global doughnut framework.
Humanity’s Selfie. Taken from https://www.kateraworth.com/doughnut/
“Humanity is currently living outside the doughnut on both the social and ecological side,” said Labastilla. There are other countries that have gone beyond the crust or the ecological ceiling while there are also parts of the world that live at the core of the doughnut and are unable to meet their population’s needs.
This is not to say that most developed countries are problematic. Some countries have started being conscious of their ecological footprint. Take Amsterdam, the first doughnut city, as an example. Labastilla recognized the role developed countries have, and he hoped that it could create a changing “ripple effect.”
The Philippines, however, also has its own shoes to fill. Recognizing the inability of the Philippines in meeting its social foundations, he believes that dimension development should depend on the needs of the community. Thus, it is vital to have a clear understanding of a community’s realities, needs, and goals.
Labastilla imagined a localized version of the doughnut framework, an idea inspired by the Maori doughnut framework by the New Zealand natives. He presented his own concrete efforts through his working Filipino translation of the doughnut framework in hopes for a better understanding of Doughnut Economics applied in the country.
Working Filipino translation of the doughnut framework by Mr. Labastilla. Taken from the talk by AEA President JT Valiente.
He brings the same philosophy into his own teachings, more specifically the SocSci 13 curriculum.
Integration into Ateneo curriculum
Ateneo has already integrated the theory of Doughnut Economics into its curriculum in SocSci 13, which is taken with NSTP 12. Ateneans are ensured of an academic experience with Doughnut Economics in the core subject.
Labastilla showcased examples of student works in his class who were tasked to make a “social portrait” of the city they were assigned to. As each student was grouped into clusters, each cluster was assigned to a social foundation or ecological ceiling which the students were tasked to use in their assessment of the city.
A “social portrait” of a city is an infographic of the city’s targets and the actual realities of its population in relation to the social foundation or ecological ceiling. The city’s respective Climate Change Commission (CCC) helped provide students the data they needed for their work.
Labastilla is “proud” of the works of his students. Countries and big organizations should of course be called to be accountable for their economic decisions, but he believes that academic work is one way to help development efforts as individuals.
The talk was organized by a team of AEA members headed by Francis Paul Padit (2 AB MEC) for Ateneo’s yearly TALAB program. To read more about Doughnut Economics, you may visit Kate Raworth’s website here: https://www.kateraworth.com/doughnut/
By L. Eleazar
On November 24 of 2020, the House Committee on Disaster Resilience approved House Resolution No. 535 to declare a climate emergency. The resolution aims for a whole-of-government, whole-of-society, and whole-of-nation policy response to mitigate the impacts, consequences, and causes of climate change. This then raises a few questions such as ‘what would declaring a climate emergency mean for our economy?’ And ‘with more pressing issues currently at hand, such as the global pandemic and the largest recession of the Philippine economy since 1981, should we really be putting effort into an environmental issue?’ This article will give an overview of climate change and its consequences and provide insight as to whether more focus on climate justice could help heal the Philippine economy and safeguard our nation for future generations.
What is Climate Change?
Before learning about the effects of declaring a climate emergency, we must understand what climate change is and why the current situation is so drastic. According to NASA, “Climate change is a long-term change in the average weather patterns that have come to define Earth’s local, regional and global climates” (n.d.). This change is caused by an increase of heat-trapping greenhouse gases within Earth’s atmosphere. While many greenhouse gases are naturally occurring and essential to life on Earth, there has been an unnatural and steady escalation of these gases for more than a century and a half. Due to human activities such as industrialization, deforestation, and large scale agriculture, greenhouse gases have peaked at levels not seen for the last three million years. This surge in greenhouse gases then trap heat and steadily warm Earth’s atmosphere, causing natural disasters and phenomena that affect people all over the globe (United Nations Climate Change, n.d.).
According to the Global Peace Index 2019 report published by the Institute for Economics and Peace, the Philippines is the most at risk due to the climate crisis. Because of our country’s geographical position, extreme weather such as typhoons are inevitable. However, increased sea temperatures due to global warming have led to typhoons being more severe within the past two decades, with some of the deadliest occurring since 2006. Super Typhoon Yolanda, globally known as Haiyan, in 2013 was recorded to have wind speeds of up to 195 mph, killed 6,300 people, and left millions homeless (Amnesty International UK, 2020). More recent travesties that come to mind are Super Typhoon Rolly and Typhoon Ulysses that decimated regions in Luzon and caused the devastating flooding in Marikina City and the Cagayan Province just this past November.
Furthermore, future generations of the Philippines will feel the overwhelming effects of climate change. It is predicted that on our current trajectory, the melting of the polar ice caps due to increasing global temperatures will cause sea levels to rise and submerge large portions of the National Capital Region. Even more so, increasing temperatures in the ocean will negatively affect sea life. With the Philippines being the 8th largest fishing nation in the world, its yearly haul estimated to be worth $2.5 billion USD, it is easy to understand how climate change can drastically affect many people’s livelihoods (Amnesty International UK, 2020).
How Does Climate Change Affect The Economy?
Aside from the staggering losses of life, homes, and livelihoods, climate change also negatively affects the economy of the country. The Philippines Catastrophe Risk Model done by AIR Worldwide and World Bank shows that the country faces an annual average loss of Php 133.2 billion from tropical cyclones alone (National Economic and Development Authority, 2013). Loans for relief aid of natural disasters pushes the Philippines further into debt while destruction left in the wake of such disasters leaves many people unemployed and many sectors at a loss. While some may argue that devastation can actually create jobs, this is a common misconception referred to as the “Broken Window fallacy.” When something is destroyed, resources and labor are used to rebuild and replace what was lost. However, had the disaster not happened, those same resources could have been used to create and add more benefit to society, rather than just replacing what was lost. Overall, there is no net benefit gained from destruction. Destruction by climate change is not good for the economy.
The most notably hit sector is agriculture. While the agricultural sector’s presence in the economy has been decreasing in recent years, it still makes up roughly 8 percent of the country’s GDP, with an increase in 2020 withstanding the global pandemic (PSA, 2020). Taking into consideration how business from agriculture can also help fuel other sectors, for example, the service sector transports agricultural goods, runs restaurants that use those goods, etc., the ruin brought on by typhoons, rising sea levels, and other such disasters have the capacity to noticeably affect GDP (Simeon, 2020). Between 2006 and 2013, about 75 natural disasters (i.e., cyclones, tropical storms, and floods) ravaged the Philippines which caused about $3.8 billion USD in accumulated damage and losses in the agricultural sector. The Philippine’s Climate Risk profile states that “an estimated annual GDP loss of up to 2.2 percent is projected by 2100 due to climate impacts on agriculture” (USAID, 2017).
Even worse, climate change also affects other sectors of the economy. Together with relentless deforestation and deterioration of the environment, climate change has major fallouts on the coastal regions’ ecosystems like oceans and mangroves. Marine resources provide more than 60 percent of livelihood to coastal populations, while coral reefs and mangroves contribute to fishing, tourism, and storm protections, putting their annual value at $2 billion USD and $83 million USD, respectively. These ecosystems are vulnerable to increasing sea levels, ocean temperature, and salinity caused by climate change. Another area that is threatened by climate change is urban infrastructure. In 2009, Typhoon Ondoy, globally known as Ketsana, caused $33 million USD in repairs to roads and bridges. With sea levels rapidly rising, infrastructure and settlements in more than 25 coastal cities are in danger (USAID, 2017).
Overall, the Philippines stands to lose substantial amounts of resources and lives to the climate crisis. A report from the Stanford Institute of Economic Policy Research estimates that by 2100, the Philippine will be one of the low-income countries to be hit hardest by the economic consequences of climate change (Nunn et al., 2019). Declaring a climate emergency would stress the urgent need for policy changes and decisions in regards to lessening these consequences.
The Climate Crisis, The Economy, and COVID-19
The question remains: with the global pandemic and recession still happening, should we really be putting effort into an environmental issue? Currently, the Philippines is experiencing its largest recession since the 1980s due to the COVID-19 pandemic and the months-long quarantine. Many businesses have shut down, many sectors experienced significant loss, the GDP indicator fell by -16.5 percent year-on-year in the second quarter, and at the strictest point in the quarantine, 7.3 million Filipinos were left jobless and unemployment levels reached an all time high at 17.7 percent, according to the PSA ( as cited in, Andrade, 2021). In order to reverse this predicament, many might point to industrialization as a solution. Yet, studies show that greenhouse gases increase with industrialization, which seemingly puts the economy and the environment in dispute. However, this is not necessarily the case.
The World Bank argues that with healing the economy, countries may also want to revisit decarbonization of the economy and green stimulus frameworks. As of the moment, resources and aid should be focused on medical workers and those drastically affected by pandemic by giving “adaptive safety nets” and using “existing social protective systems” to provide stability and hopefully end the health crisis soon (Hallegette et al., 2020). But in order to move forward and out of this recession, attention may be given to more environmentally friendly methods for economic growth. Globally, the World Bank estimates that a shift to low-carbon could create 65 million net new jobs by 2030. In developing countries, investments in resilient infrastructure could produce $4.2 trillion USD over the lifetime of the new infrastructure since it avoids costly repairs and minimizes the consequences of natural disasters (World Bank, 2020).
Still, what is crucial now is making policy choices that will reap benefits in both the short-term and long-term. For example, recultivating forestlands may create many jobs in the short-term while simultaneously bringing about benefits such as a boost in carbon sequestration, watershed protection, better crop yield, and forest products which could amount to billions of dollars in the long-term. Another specific example is to make large investments in retrofitting buildings so they are more energy efficient and better adapted to higher temperatures in the future. This would create more jobs and support economic recovery, according to the World Bank. Especially now, with oil prices at a low, governments have the opportunity to reexamine their approach on fossil fuels and redirect resources and efforts towards more sustainable ways to promote growth and reduce poverty (Hallegette et al., 2020). Other ideas and policies that can be revisited are investments in green technology, such as electric vehicles and renewable energy, and carbon pricing, which was discussed in the Philippines as early as 2017 but has since been discontinued (Bisbey et al., 2020).* House representatives who approved the declaration of climate emergency stated that “the Philippines can leverage its position as an emerging market and a potent labor source for new industrialization to pursue an official foreign policy of international climate justice and can also use its domestic policies as moral leverage in pursuing financial claims for rehabilitation and climate-proofing” (Cervantes, 2020).
However, this is not to say that going green is the ultimate solution to our economic predicament. As with any decisions, there are risks to be taken. According to an International Monetary Fund article by Kenneth Gillingham of Yale University, while it is possible to keep the global temperature rise this century below 2 degrees Celsius (a goal of the Paris Agreement that would help mitigate the worse consequences of climate change), Gillingham explains that a large-scale shift into a decarbonized economy would have high costs if done too quickly. Oftentimes, environmental initiatives have high short-term costs whereas its benefits, such as reducing social cost, lessening environmental degradation cost, and minimizing resources needed to rebuild after natural disasters, can only be seen in the long-term. As said by Gillingham (2019) in Carbon Calculus,
…a vast transformation of the energy system will be costly and challenging if attempted all at once, especially considering the large short-term costs of the transition for fossil-fuel-reliant developing nations. There are certainly inexpensive measures that can be implemented today…The costs of these measures are already lower than the damage from climate change they would avert, based on estimates of carbon’s social cost. But many other approaches are quite costly in the short term, especially efforts to promote new low-carbon technologies (p. 11).
Yet, with this being said, Gillingham still believes that the key to decarbonizing the economy is to consider the long term. Furthermore, he goes on to point out that with attention on green technology, there will be innovations that would likely lead to more cost-efficient ways to slow global warming and simultaneously grow the economy. It is crucial for our economy to shift to more environment-friendly methods so that we can mitigate the destruction and costs brought about by climate change (2020). Yet, at the time of recession and the pandemic, can we really afford to think that way?
Whether we can or we cannot is ultimately up to policy makers to decide. With the House panel approval of House Resolution No. 535 to declare a climate emergency this past November, it seems as though there may be a consensus that, yes, we can and must push efforts for more environmentally sustainable economic growth. As Albay Rep. Joey Sarte Salceda, the author of the resolution, said “We will eventually defeat Covid-19, as we have beaten all other pandemics. But the climate emergency will be here to stay. Unless we act now to make our communities safer, and to seek international climate justice, we will suffer the long-term consequences of this crisis” (as cited in, Cervantes, 2020).
*take note that each of these suggestions deserve an entire article dedicated to examining their costs and benefits in more detail
Amnesty International UK. (2020). Philippines country most at risk from climate crisis.
Andrade, M.H.A. (2021, January 31). Philippine economy Enters COVID-19 induced
Bisbey, J., & Huang, Z. (2020, May 8). Economic and Social Survey of Asia and the Pacific
2020 Towards sustainable economies. https://www.unescap.org/sites/default/d8files/WB%20Group%20presentation%20%28Thailand%2C%20Philippines%2C%20Malaysia%29.pdf
Cervantes, F. (2020, November 24). House panel approves climate emergency declaration.
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CREATEing Relief During the COVID-19 Pandemic
By Euan S. Limon
The COVID-19 pandemic has brought negative impacts for the country, especially for the economy. One of the proposed remedies to combat this unfortunate event is the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Bill. But what does the bill do, and who will benefit from this?
The CREATE bill aims to reform the country’s corporate tax system and fiscal incentives system through new policies. It is believed to be “the first revenue-negative tax reform package and the largest fiscal stimulus program for enterprises” (Cometa, 2020).
Corporate Income Taxes (CIT) will be reduced to 20% for domestic corporations – the largest CIT cut in recent history. Corporations with total assets less than P100 Million and P5 Million of net taxable income would qualify for the 10% cut while remaining corporations would only enjoy a 5% cut for their CIT.
Other reforms within the bill include the lowering of the Minimum Income Corporate Tax rate (MCIT) from 2% to 1%. Housing, E-books, Medicines, and PPEs, including the COVID-19 vaccine, are exempted from value-added tax (VAT).
Micro, Small, and Medium Enterprises (MSMEs) are expected to fully benefit from the CREATE bill the most, given that they comprise 99% of enterprises in the country. The bill helps MSMEs to recover from the impact the pandemic brought to the economy.
The bill’s final reading has been approved by the Senate last November 2020. Though, disagreeing provisions by the House of Representatives delayed the passage of the bill. Once it has been settled and signed by the president, the bill would start to take effect by the latter half of 2021 on July 1.
Cometa, A. A. (2020, November 30). CREATE Bill: An early Christmas gift?
Department of Finance. (2020, November 29). Dominguez thanks Senate for passing CREATE bill. https://www.dof.gov.ph/dominguez-thanks-senate-for-passing-create-bill/
Hilario, E. M. (2020, December 04). Everything you need to know about the CREATE bill. https://manilastandard.net/opinion/columns/about-town-by-ernesto-m-hilario/341165/everything-you-need-to-know-about-the-create-bill.html
Ramos, C. (2020, December 17). Lawmaker says delayed passage of CREATE bill a huge setback. Inquirer.net. https://newsinfo.inquirer.net/1372807/lawmaker-says-delayed-passage-of-create-bill-a-huge-setback