Assessing the Government Responses A Planning and Design Stage

1. Timeliness

The national government was already in a “crisis” mode when the Global Financial Crisis unfolded mainly because of the rapid increase in inflation in 2008 brought about by the increase in fuel (around June/July) and rice prices (around March/April). There were already anti-poverty programmes that were also being implemented to counter the effects of high inflation on vulnerable sectors e.g. Food for school Programme, Tindahan Natin Programme, Accelerated Hunger Mitigation Programme.

In a certain sense, the national government was already primed for another set of crises starting with the financial crisis that would emanate from the United States particularly after the collapse of the financial giant, Lehman Brothers in September 2008. As could be seen in Annex A (Timeline of the Government Response), the government was relatively quick in

the formulation of a plan to cushion the negative effects of the crisis. The national planning agency spearheaded the preparatory meetings which came up with concrete plans to respond to the crisis. The preparatory meetings involved other key economic-related agencies like the Bankgo Sentral ng Pilipinas, the Department of Finance, and the Department of Budget and Management. This group usually met as the Economic Managers Team or as the Development Budget Coordination Committee which discusses and resolves monetary and fiscal issues. The official Economic Resiliency Plan emerged early in January 2009 although the budget strategy was already in place in December as the Executive branch expected the Legislative to approve the budget before the year ended. However, the National Budget was only approved during the last week of January.

Monetary authorities were the quickest to react as the BSP first reduced policy rates in December 2008. Most of the fiscal stimulus packages had to wait before the budget was finally enacted. Also, such spending usually incur some lags because of the bureaucratic processes of fund requests, allocations and releases. While the monetary environment preserved liquidity in the early stages, the fiscal stimulus lagged in implementation. This would be seen basically in the GDP figures for the three quarters of the year where the Q1 growth in 2009 was only .6%, while the next two quarters registered only .8%. The implementation of ESF which was to help exporters hit by the crisis was much delayed with projects being approved only in November 2009. Unfortunately also, when the additional spending was already in place, two major disasters occurred which also affected similar areas hit by the financial crisis10.

2. Institutional Mechanism for Coordination11

The early responses were coordinated through several institutions, such as the Development Budget Coordinating Committee (DBCC) and the Economic Managers’ Meeting. The DBCC is composed of the Department of Finance (DOF), Department of Budget and Management (DBM), National Economic and Development Authority (NEDA), the Bangko Sentral ng Pilipinas (BSP), and the Office of the President (OP). The Economic Managers’ Meeting includes the DOF, DBM, NEDA, BSP, Department of Agriculture (DA), Department of Trade and Industry (DTI), and Department of Energy (DOE).

The National Economic Development Authority (NEDA) served as the focal point in terms of gathering key reports and information on activities related to the national response and also on the developments at the global level. The NEDA gives fortnightly updates to the President and the Cabinet which was coined as “GRIM” (Global Recession Impact Monitor) during the early months of the crisis which eventually became “GRIN” (Global Recession Impact News) when there appeared to be signs of recovery. Meanwhile, the Cabinet assistance System (CAS) which serves as Secretariat for the Cabinet would meet every week to monitor and follow up agreements made during the said meetings. These include status of

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Typhoon “Ondoy” dumped a record amount of rainfall on Metro Manila and Southern Luzon in late September 2009, while typhoon “Pepeng” brought huge rains that triggered landslides and floods throughout northern Luzon about a week later.

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programs and projects related to GRIM/GRIN reports. At the grassroot levels, monitoring was done through implementing agencies and their satellites, which report to the CAS and in the Cabinet meetings through their heads. The NEDA is a regular participant to the CAS meetings to anticipate and include in the NEDA reports and GRIN reports the latest presidential directives. The National Statistics Coordination Board was tasked to monitor global trends while the Bureau of Labour and Employment Statistics of DOLE was tasked to monitor job displacements i.e. domestic and overseas workers and also those which were assisted by government agencies.

There were also specific agencies who led the response for certain sectors. For example, for the poorest and most vulnerable sectors, it was the Department of Social Welfare and Development (with their 4Ps as the flagship programme), the Department of Labour and Employment and attached agencies (with various programmes) for displaced formal sector and overseas workers and for the affected exporters, the Department of Trade and Industry. The National Anti-Poverty Commission was given the responsibility to monitor the developments for CLEEP. A positive indicator of the coordination occurring among these agencies was the presence of updated reports on the status of interventions which can be accessed by the public including researchers. The GRIN and GRIM reports are also accessible in the NEDA website.

However, much better coordination could be done in terms of the implementation of social protection measures. While there is already a Social Protection sub-committee under Social Development, coordination in the implantation of the varied programmes should further be strengthened. A common definition and framework have been adopted by the key agencies but hopefully there will be consensus in the targeting and monitoring system.12

3. Targeting

Early on, the government was already sure that export firms and their workers, overseas workers in hardly hit countries and already poor households will be most likely hit by the crisis. However, which specific firms in case of exporters or what specific countries in the case of OFWs will be greatly affected was the major preoccupation of government agencies. The DOLE and POEA in late 2008 were keenly gathering information form their attaches to be able to anticipate displacements. DOLE also kept watch in key export zones and sent key personnel to deal with brewing labour issues13. However, there seem to have been no mechanism in ascertaining the specific sub sectors that were experiencing decline in production due to weakening global demand. For the poor households, the government relied on the targeting system of the 4Ps. However, the NHTS-PR was still being implemented during the crisis months.

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The DSWD has its NHTS-PR while the DILG and NEDA mandated CBMS for local governments. 13

One interviewee even said that the President wanted lists of specific names of workers affected in the Export Zones.