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The Rundown: MECQ imposed over Mega Manila, PhilHealth probed for corruption, economy enters recession

Despite the gloomy monsoon weather engulfing the country in the first week of August, the cold rain showers dwarf the storms pummeling the economic and health sectors. 

The persistent rise of COVID-19 cases, which is approaching the 130,000 mark as of August 9, has stretched the country’s health system to its breaking point, resulting in a plea from health workers for a two-week enhanced community quarantine in Mega Manila. On the other hand, the country’s economy has officially slipped into a technical recession, after the Philippine Statistics Authority (PSA) reported an alarming 16.5 percent drop in the economy’s value.

Timeout

In a letter dated August 1, the Philippine College of Physicians wrote to President Rodrigo Duterte, urging the government to put Mega Manila back under an Enhanced Community Quarantine for two weeks. The letter highlighted several problems being faced in the fight against COVID-19—chief among them is a depleting healthcare workforce brought about by workers testing positive for the virus as well as resignations due to “fear, fatigue, and poor working conditions”. A lack of sufficient transportation services and social amelioration support was also highlighted. 

In addition, the college criticized the government’s handling of testing and contact tracing efforts, citing the use of unreliable antibody tests and failure to comply with Department of Health (DOH) and IATF guidelines for contact tracing. 

In response, Duterte, in his public address last August 2, accepted his Cabinet’s recommendation—a compromise to instead place Metro Manila, Bulacan, Laguna, Cavite, and Rizal under modified enhanced community quarantine from August 4 to 18, and to deliver additional aid to health workers, including free accommodation and transportation, free testing, and free life insurance under the proposed Bayanihan to Recover as One Act or Bayanihan Two.

Duterte, however, was irked by the criticisms and challenged medical groups to stage a “revolution”. “Next time, you can just ask for an audience…Magsabi kayo revolution, then ngayon na. Go ahead. Try it,” he declared.

(Say you will start a revolution, then just do it.)

Economy in recession

Last Thursday, August 6, the PSA released the country’s gross domestic product (GDP) report for the second quarter of the year, revealing that the country’s economy has declined by 16.5 percent from April to June compared to the same period last year. This is the largest recorded quarterly drop since the third quarter of 1984, when the country saw a 10.7 percent contraction during the latter years of the Marcos regime. 

The drop in value was mainly caused by a steep decline in government investments and household purchases of goods. Government expenditures, however, grew by 22.1 percent for the same period.  

Meanwhile, among the major economic sectors, only agriculture experienced any kind of growth, with an increase of 1.6 percent in value. Industrial and service sectors, meanwhile, lost  22.9 and 15.8 percent, respectively.

According to National Economic and Development Authority Acting Secretary Karl Chua, the country’s economy is expected to shrink by 5.5 percent for the year, greater than the grim 3.6 percent decline projected by the International Monetary Fund late last June. The prospect of the economy bouncing back hinges on economic stimulus packages still being mulled over by lawmakers. As of press time, the government is awaiting the passage of an additional P140-billion from Bayanihan Two, which was only passed on its third and final reading in the House of Representatives earlier today, August 10. 

Nevertheless, critics believe that the fiscal response of the government remained insufficient. According to the IBON Foundation, the government has spent the equivalent of 3.1 percent of its GDP in response to COVID-19—smaller than other Southeast Asian economies. By comparison, Singapore spent 19.7 percent, Vietnam 13.3 percent, Thailand 9.6 percent, Indonesia 4.4 percent, and Malaysia 4.3 percent. Even if Bayanihan Two were passed, the foundation said, it would simply push the stimulus amount to 3.8 percent of GDP—a relatively small increase. 

‘Widespread corruption’ in PhilHealth

Amid the nation’s attempt to arrest the rise of COVID-19 cases and a deepening economic crisis, the Philippine Health Insurance Corporation (PhilHealth) was rocked by a scandal after a report surfaced alleging that PhilHealth officials had embezzled P15-billion through different fraud schemes. 

Thorrsson Montes Keith, the whistleblower and a former PhilHealth anti-fraud officer who filed his resignation last July, claimed that “widespread corruption” was occuring within the government-owned agency, describing the scheme as similar to that of a “syndicate”. 

“Naniniwala po ako na ang dahilan kung bakit hindi natatapos ang korapsyon sa PhilHealth at naging kultura na po nito, ay ang pagtatalaga ng mga sindikato o mafia ng kanilang kasamahan, kasabwat o kapwa sindikato sa mga matataas na posisyon na nakakatulong sa kanilang iligal operasyon,” he said. 

(I believe the reason why corruption in PhilHealth is never snuffed out is that those working in the company have created a syndicate by appointing their accomplices to top positions to help them conduct illegal operations.)

Responding to Keith’s allegation, PhilHealth President and CEO Ricardo Morales said that he had his doubts about the accusations put forward, mentioning that Keith had failed to submit any report on anomalies in the agency when he was still an anti-fraud legal officer. Morales, however, admitted that about P10.2-billion could have been “potentially lost” to fraudulent transactions in 2019, and the amount could soar to P18-billion if left unaddressed by next year.

As of Friday, August 7, Duterte has tasked the Department of Justice to form a task force to probe PhilHealth’s internal operations, while Morales, along with two top PhilHealth executives, requested to attend an upcoming Senate investigation hearing online due to supposed health concerns.

By John Robert Lee

By Warren Chua

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