The Coronavirus (COVID-19) outbreak has not only created an unprecedented health crisis but triggered serious economic downturns globally. The Philippines has not been spared and the effects are felt in all its regions, including the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
BARMM is still a region in transition towards establishing a fully autonomous political entity and completing its normalization processes. Its momentum toward this, including its socioeconomic development has been greatly affected by the COVID-19 crisis. While COVID-19 cases in the region have been kept low, the response measures (mainly lockdowns, quarantines, and social distancing) taken in the country and in the region to combat the pandemic have triggered major socioeconomic impacts on its population and its economy even in the short-term. Currently, the BARMM government has adapted and pivoted the health crisis by addressing pressing concerns it brought, which made the attainment of the 12-point priority agenda more challenging. The BARMM Government’s response during the COVID-19 crisis focused on improving social welfare and development, essential health services, economic recovery, infrastructure support and governance, as articulated in the Bangsamoro Region’s Response and Recovery Plan for COVID-19 2020-2022.
This report presents the consolidated results of three research studies aimed to assess the socioeconomic impact of COVID-19 in BARMM including economic trends in the short and medium-term. The assessment also examined the policy and program responses of the BARMM Government to the COVID-19 crisis and provided policy recommendations to support the government’s transition and push towards achieving an inclusive, resilient, and sustainable development. The assessment was commissioned by UNDP in the Philippines in collaboration with the BARMM Government, with funding support from the Embassy of Japan in the Philippines.
The intersecting assessment started with a household survey supplemented with key informant and in-depth interviews which tried to assess the condition of BARMM residents during the COVID-19 crisis. The Social Accounting Matrix (SAM) methodology was then used to determine the immediate, short-term impacts of the crisis to the economy. Lastly, the Computable General Equilibrium (CGE) models were applied to project the medium-term economic scenarios.
Results of the survey revealed the following key concerns:
Mobility restrictions continued to affect work and businesses that resulted in income declines among many of those affected. Restrictions through lockdowns and quarantines have led to work stoppages, reduced working hours or unemployment. Those in the informal sector were hardest hit, many of whom are women. Stricter restrictions were implemented in the urban areas compared to rural areas.
Food security was affected with a number of families coping by skipping meals. Access to food is made difficult due to lack of money and resources, high food prices, and shortage of food. Skipping meals is prevalent as part of a coping strategy.
Most residents had difficulty in accessing health care services, especially to hospitals and medicines. Already confronted with limited health care capacity even pre-pandemic, difficulty of access to health care services and supplies are more amplified during this crisis.
The pandemic had compounded effects on women and children. Women are more likely to bear the brunt of the social and economic consequences of the pandemic. They are disproportionately more in the informal economy, with majority as heads of single-parent households who have less access to social protections. On the other hand, children’s education has been interrupted due to school closures or inability of households to provide for their school needs during the shift to online education.
Residents found ways to cope with the crisis in the short term, with many remaining optimistic about the recovery process. Household coping strategies during the pandemic include borrowing money, relying on cheaper food or reduction of food intake. Also, despite negative outcomes, majority still remain optimistic and expect recovery to happen within 6 months to 2 years.
Majority received aid and assistance (cash or in-kind, including Social Amelioration Program) mostly coming from the regional and local LGUs, with the highest positive impact indicated in Lanao del Sur, Maguindanao and Cotabato. Most were very and somewhat satisfied with the support provided.
The COVID-19 crisis further exposed the underlying multidimensional vulnerabilities and inequalities (e.g., based on gender, age, economic status) already existing in BARMM prior to the pandemic and exacerbated during the crisis. Beset with peace and security issues that remain a developmental challenge, BARMM already has an increasing poverty incidence, mainly operating as an agricultural economy with limited private sector participation, and has a big informal sector which translates to low income and tax collections. The results of the survey clearly showcased these intertwined vulnerabilities faced by the population that go beyond income affecting other outcomes on education, health, and access to food, among others.
The second phase assessing the short-term impacts of COVID-19 on the BARMM economy using Social Accounting Matrix (SAM), indicates that economic activity in BARMM is expected to contract in 2020, though to a lesser degree than the country. The projection is highly dependent on the assumed shocks related to the external environment. In all scenarios when the economy contracts (from 4 percent or less), agriculture is the largest contributor on which the BARMM economy largely depends. A more aggressive stance to government transfers can offset the economic contraction and allow household expenditures to rise, especially for the lower income groups. Further analysis suggests that cash transfers to households or Universal Basic Income (UBI) in BARMM has significant potential to protect household income and consumption while setting the BARMM economy to recovery in the short-term.
Finally, using Computable General Equilibrium (GCE) Modelling, the implications of COVID-19 pandemic on the medium-term development prospects on BARMM from 2020 to 2022 are assessed using five scenarios.
Under the Business-as-usual scenario, BARMM faces mediocre growth prospects, a slow pace of poverty reduction, and sluggish improvements in human development outcomes. Under the Recovery scenario, higher growth rates are very much possible with faster recovery of the external economy, although contraction of investment and net exports worsens under this scenario. Three alternative scenarios, namely the Increase in Private and Government Spending on Consumables scenario, Increase in Public Investment scenario, and the Improvement in Technology scenario have also been discussed to show that a comprehensive approach to recovery may create faster economic growth compared to Business-asusual or Recovery scenarios
Based on the socioeconomic impact assessment results and the current responses of the Government, some of the policy recommendations point to the following:
Assess BARMM Government’s readiness and design and execute an appropriate implementation of health systems strengthening and deployment of a comprehensive and coordinated regional vaccination program. Ensure that the region’s health system is prepared to address the pandemic now and in the future.
Build a database on vulnerable sectors (women, children, people with disabilities, elderly, internally displaced persons) to enhance policy effectiveness in addressing poverty and empowerment concerns.
Assess the current social protection programmes in BARMM with the view to enhance efficiency, effectiveness as well as transitioning to universal social protection.
Integrate green recovery approaches in COVID-19 economic recovery packages.
Explore opportunities that can diversify and broaden sources of economic growth.
Increase investment in human capital.
Scale up and build capacity for digital transformations in the private and public sectors.
Strengthen participatory and anticipatory governance
Consider a special stimulus package for the informal sector to help start/ restart their business and livelihood.
Provide opportunities or the environment for women to join the labor force.
Considering gender disparities are magnified during the pandemic, undertake targeted research and interventions on women particularly as majority are in the informal sector with no access to social protection.
Exploring Youth Development Programs as preparation for productive work and in line with efforts on promotion of peaceful engagement and community resilience.
Maximize private sector participation in the recovery period starting with creating an enabling environment to push for private sector collaboration.
Strengthen participation of and collaboration with the education sector in building capacities and supporting research needed to address pandemic and post-pandemic concerns.