MAP Insights

Our economy has been brought to its knees by COVID-19 since March 2020. It contracted last year by 9.6%. The country’s GDP shrank by 4.2% in the first quarter this year. 2Q results may turn out better, but with the Delta variant surging the world over and gaining momentum here, we can’t predict how things will turn out for us between now and December, and beyond.

The economy was averaging an annual growth of 6.4% between 2010 and 2019. But strict countrywide lockdowns in 2020 caused businesses to close and stranded workers from their sources of income here and abroad. Prolonged lockdowns dislocated supply chains, in turn, disrupting economic drivers worldwide, particularly the travel and tourism industry, small-medium scale businesses, services and the real property sector.

Unemployment climbed to 8.7% in April 2021, equivalent to 4.14 million Filipinos. Inflation hit 4.5 percent in May, well ahead of the government’s target of 2% to 4%. Our trade deficit was $2.73 billion, the tenth straight month that exceeded $2 billion, based on data from the Philippine Statistics Authority.

Consequently, the World Bank cut its GDP growth forecast for the country this year from 5.5% to 4.7%. The ADB shares that guarded outlook, forecasting growth of 4.5% in 2021. Moody’s is slightly higher at 5.8%. Contrast that to the government’s optimistic projection of between 6-7% which was revised downward from 6.5-7.5%.

So, we ask ourselves – after almost 18 months of struggling with the pandemic, what aren’t we getting right? What are the downside risks that we continue to face despite the passage of time? Let me cite 4 factors:

1. Dysfunctional government

Who is orchestrating the “whole-of-government” effort? We’ve undergone a distressful, delayed, incoherent and disorganized response to COVID-19. Policy directions haven’t translated into seamless and professional execution at the national and local levels. No one sees a team effort; we mostly witness “sound byte” governance.

Over 1.56 million Filipinos have been infected by COVID and its variants to-date, and it’s bound to surge as Delta romps unchallenged. Our COVID-fatigued society is taking on more risk to get back to work while the government’s national and local gatekeepers seem to still lack cohesion and cogent strategies to beat the virus.

2. Underdeveloped and neglected health care system

There’s a clear imbalance between the private and public health sectors, resulting in unfair and unequal access to health services of the poor. Private facilities are better- equipped and treatment is easily obtained; hence, around 2/3 of medical professionals choose to work there. But its carrying capacity has been tested to its limits by COVID-19.

It’s worse for the public sector. Inadequate funding and endemic corruption (e.g., procurement, storage and insurance anomalies) have kept many citizens from accessing basic health services. Rural facility upgrades are mainly face lifts, instead of real improvements in equipment, medicines and supplies.

Moreover, Filipino medical staff immigrate to countries with better pay and facilities. The Philippines is, in fact, the biggest supplier of medical personnel in the world. The downside is a growing shortage of reliable medical professionals to care for 109 million Filipinos today and counting.

3. No vaccine R&D and production facilities

Countries with the wherewithal are hoarding vaccine supply. After 18 months, only a quarter of the world’s population have been vaccinated. Over here, about 30 million doses have been received, good for 15 million Filipinos. How many more Filipinos need to be jabbed to gain the relative protection of immunization?

The proportion of our population that must be vaccinated against COVID-19 to begin inducing herd immunity is not known. And even those who have been fully vaccinated are now hearing that they have to take a third dose to boost immunity against Delta. That places have-not countries like us at the mercy of those who have.

4. Information and communications challenges

We’re battling various crises. Our health crisis has turned into an economic crisis. Additionally, the failure to inform and communicate has led to a crisis in confidence in government’s capacity to protect and secure. Government’s crisis management is reactive, not pro-active.

The pandemic is a war that must be won. Thorough, accurate and timely delivered information is essential. A war is waged through leadership, a well-thought-out strategy and up-to-date plans that the public trusts and rallies to. Unity is forged in that manner. That’s what “whole-of-nation” requires, without which the war will be lost.

Gaining the public’s trust and confidence is strategically important. Messages that people understand, accept and relate to are key to earning their buy-in. I suspect many are resisting vaccination because of the deficit in quality information, the surplus of misinformation, and insufficient communication platforms to deliver content.

The work’s cut out for the government and the private sector to get their act together in a real public-private partnership. A united effort in waging the war against COVID is essential under the umbrella of good governance. It starts there for better protection; to bring us on the road to recovery; and prepare us for future global crises that are bound to follow.

IATF’s Sec. Charlie Galvez is swimming upstream, needing better all-around support from national institutions and local governments. The “whole-of-government” concept hinges on unity of purpose, integrative leadership, 24/7 management and sustained teamwork. The smokestacks are still evident and some stacks aren’t even smoking.

Today’s global events strike an eerie resemblance to the Spanish flu pandemic a century ago that led to the Great Depression and World War 2. With Delta, we’re facing a possible global depression with geopolitical fissures translating into war preparations. Leadership and management skills must be better and smarter to face future hardships if we’re to survive.

Singapore’s a good role model to pattern after. And thank God for our own Hidilyn Diaz who lifted the country’s low morale over her shoulders in Tokyo. She showed us how focused preparations, hard work, perseverance and the will to win produce outstanding results despite formidable odds.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is member of the MAP, Chair of Philippine Council for Foreign Relations, Vice Chair of Pepsi-Cola Products Philippines, Inc. and sits on the boards of other companies as Independent Director. Feedback at map@map.org.ph and rmalunan@gmail.com. For previous articles, please visit map.org.ph)