Hazard pay and COVID-19 loans

Photo from the All-UP Workers Union-Manila

Health workers held a picket last November 20, 2020 at the Philippine General Hospital in Manila to protest the delayed release of their hazard pay of P500 a day.

The protest action was organized after “six months of waiting,” said the workers’ union of the University of the Philippines Manila-Philippine General Hospital in a statement emailed to media.

Photo from All UP Workers Union-Manila

Last March 2020, President Rodrigo Duterte signed Administrative Order 26 that entitles government personnel “whose services are urgently necessary and who physically report for work during the period of an Enhanced Community Quarantine and are inevitably exposed to health risks and hazards” to receive hazard pay. [SEE: AO 26]

The provision of hazard pay is one of the indicators that the government must comply with as part of its Covid-19 loan agreement with the Asian Development Bank (ADB).

From the Gender Monitoring Matrix of the ADB CARES Program [SEE: Gender Monitoring Matrix]

This is indicated in the Gender Monitoring Matrix of the ADB Covid-19 Active Response and Expenditure Support (CARES) Program.

Based on the matrix, the government is expected to ensure that by October 2020, frontline health workers, of whom 75% are women, should already enjoy health insurance coverage through PhilHealth, receive a special risk allowance of 25% of salary plus hazard pay, P100,000 compensation for severe infection, and a P1 million benefit in case of death. [SEE: Gender Monitoring Matrix, ADB CARES Program]

The $1.5-billion ADB CARES program is co-financed by the Beijing-headquartered Asian Infrastructure Investment Bank (AIIB) through a separate $750-million loan that forms part of the total debts incurred and grants received by the Philippines to address the coronavirus pandemic.

Photo from the All UP Workers Union-Manila

As of late September 2020, the Philippines’ financing to address the pandemic has reached more than $9 billion. [SEE: How much loans, grants has the Philippines received to address Covid-19?]

To help track these the Philippines’ Covid-19 loans, Social Watch Philippines has launched a special project, the Citizens’ Monitoring of Financing for Covid-19 Response and Recovery: Focus on the AIIB Loan, that helps monitor the $750-million AIIB Loan. [SEE: Project Brief]

LIST | How much loans, grants has the Philippines received to address Covid-19?

A senior citizen waits for her turn to receive assistance while in line in this file photo taken in Manila in October 2020. (Photo by Bernard Testa)

The Philippines was able to borrow money, receive grants, and secure funding for several programs as part of its initiatives to address Covid-19.

As of September 28, 2020, loans, grant assistance, and budgetary support financing received by the Philippines have reached a total of $9.914 billion, based on data collected by a Social Watch Philippines. (SWP) team working on a special Covid-19 loan-related project.

Financing secured for COVID-19 Response
(As of September 28, 2020)

ParticularsAmount in USD million
WB Third Disaster Risk Management Development Policy Loan500.00
ADB COVID-19 Active Response and Expenditure Support Program1,500.00
ADB Social Protection Support Project – Second Additional Financing200.00
ROP Bonds Due 2045 with 2.950% coupon1,350.00
ROP Bonds Due 2030 with 2.457% coupon1,000.00
WB Emergency COVID-19 Response Development Policy Loan500.00
ADB Support to Capital Market Generated Infrastructure Financing, Subprogram 1400.00
AIIB CARES Program750.00
AFD Expanding Private Participation in Infrastructure Program, Subprogram 2165.42
AFD Inclusive Finance Development Program, Subprogram 1110.28
ADB Expanded Social Assistance Program500.00
JICA COVID-19 Crisis Response Emergency Support Loan458.95
ADB Competitive and Inclusive Agriculture Development Program, Subprogram 1400.00
ADB Inclusive Finance Development Program, Subprogram 2300.00
JICA Post Disaster Standby Loan (Phase 2)458.95
ADB Disaster Resilience Improvement Program500.00
WB Social Welfare Development and Reform Project II – Additional Financing200.00
Subtotal, Budgetary Suppport Financing9,293.60
ADB COVID-19 Emergency Response Project3.00
ADB Rapid Emergency Supplies Provision5.00
Government of Japan Non-Project Grant Aid for the Provision of Medical Equipment of DOH18.36
Subtotal, Grant Assistance26.36
WB COVID-19 Emergency Response Project100.00
WB Support to Parcelization of Lands for Individual Titling Project370.00
ADB Health System Enhancement to Adddress and Limit COVID-19 Program125.00
Subtotal, Project Loan Financing595.00

Funds came from the World Bank, the Asian Development Bank (ADB), the Japanese government, the Japan International Cooperation Agency (JICA), the Agence Francaise. de Developpment (French Development Agency), and the Asian Infrastructure Investment Bank (AIIB).

Besides the World Bank and the ADB, the Beijing-headquartered AIIB emerged as one of the bigger lenders of the Philippine government.

Through its $750-million loan, the AIIB co-financed the ADB’s Covid-19 Active Response and Expenditure Support (CARES) program.

This list of loans was compiled as part of the team’s work in relation to the Citizens’ Monitoring of Financing for Covid-19 Response and Recovery: Focus on the AIIB Loan.

The project’s team leader, Alvic Padilla, talked about the relevance of the project during his presentation at an online roundtable briefing organized by SWP held late October.

“Through this project, citizens will have a better understanding of how the loan would be used and spent,” Padilla said during the event, which was attended by officials from the Department of Finance, Department of Social Welfare and Development, Department of Health, Department of Labor, and the Philippine Commission on Women. [SEE: Briefing on the AIIB Covid-19 Loan]

His remarks echoed the explanations contained in the project brief. [SEE: Project Brief]

“Prudent debt management is important to ensure that people most affected by the pandemic will not bear the burden of servicing these debts,” the project brief said.

“Citizens need to monitor and ensure that Covid-19 loan proceeds are spent in the most effective, efficient, and timely manner because any misuse, abuse, or wastage will have dire human and social consequences.”

VIDEO | Briefing on the $750-million loan that AIIB lent to PH for Covid-19 response

This was the presentation delivered by Alvic Padilla, Project Team Leader of a special Social Watch Philippines (SWP) project that intends to track the use of a $750 million loan that the Beijing-headquartered Asian Infrastructure Investment Bank (AIIB) lent to the Philippines for its Covid-19 response.

Padilla delivered this briefing during an online roundtable meeting entitled “Dissecting the AIIB Loan: What is it all about?” [See: Public officials, civil society groups hold roundtable to discuss gov’t’s Covid-19 loans.]

Held last October 29, the event was attended by several government officials from the Department of Finance (DoF), Department of Health (DoH), Department of Social Welfare and Development (DSWD), Department of Labor and Employment (DoLE), and the Philippine Commission on Women (PCW).

Presentations delivered by officials from the DoF and the DoLE can be viewed by visiting our Resources Page.

This loan is co-financed by another loan from the Asian Development Bank (ADB) through its ADB Covid-19 Active Response Expenditure Support (CARES) Program.

To find out more about the project and the loan, please click here to read the Project Brief.

Public officials, civil society hold roundtable to discuss gov’t’s Covid-19 loans

Group shot of the thirty or so attendees of a roundtable discussion about loans incurred by government to address Covid-19.

Public officials and civil society groups have participated in the first in a series of meetings aimed at raising awareness about loans incurred by the Philippine government to address the pandemic.

Held in October 29, the two-hour long videoconferencing event was organized by Social Watch Philippines (SWP), an international network of budget advocacy groups.

The event was also attended by representatives of several government agencies including the Department of Finance (DoF), the Department of Health (DoH), the Department of Social Welfare and Development (DSWD), the Department of Labor and Employment (DoLE), and the Philippine Commission on Women (PCW).

The event was entitled “Citizens’ Monitoring on Covid-19 Financing-Dissecting the Asian Infrastructure Investment Bank (AIIB) Loan: What is it all about?” It also underscored the role of budget advocacy groups such as SWP and its partners in making sure that Covid-19 loans are used effectively and efficiently. [See: Covid Loan Tracker Project Brief]

The discussion focused on the USD750 million program loan of the AIIB, which is also co-financing the Covid-19 Active Response and Expenditure (CARES) program of the Asian Development Bank (ADB). [See: ADB CARES program]

The ADB’s CARES program is a separate USD1.5 billion loan package designed to provide budget support for the Philippines’ efforts to address the pandemic.

Broadly, the ADB CARES program consists of measures taken to combat the spread of the Covid-19 pandemic in the Philippines, ensure that dedicated funds and programs for social protection and relief to affected people and allocated and implemented, and that economic stimulus for affected sectors are delivered.

Taken together, the ADB and the AIIB loans are worth USD2.25 billion.

Guest speakers during the event included DSWD Undersecretary Luzviminda Ilagan, DOLE Assistant Secretary Dominique Tutay, DOF Director for International Finance Operations Ronald San Juan, DoH Director for International Health Cooperation Ma. Soledad Antonio, and PCW Deputy Director for Operations Ma. Kristine Josefina Balmes.

During his presentation, DoF’s San Juan, who was the main speaker, said that civil society groups are welcome to participate in policy dialogues and consultations with the technical working groups.

Department of Finance Director Ronald San Juan was the main speaker at the Social Watch Philippines event.

These TWGs, which coordinate with the DSWD, DoH, Department of Trade and Industry and DoLE, and the DoF, are subsumed under the policy committee chaired by the DoF and the ADB for the CARES program loan, San Juan said.

These, among others, will be used as inputs in the forthcoming study to be released by Social Watch Philippines about the AIIB Loan. The study is part of an ongoing project called the Covid Loan Tracker. [See: Covid Loan Tracker]

Among the civil society organizations in attendance included the Freedom from Debt Coalition, WomanHealth Philippines, Save the Children, Life Haven Center for Independent Living, Philippine Chamber of Massage Industries of the Visually Impaired, Coalition of Services of the Elderly, Unang Hakbang Foundation Inc., SocioChronicle, the Polytechnic University of the Philippines Sociology Society, Economic Research Society, Parent Advocates for Visually-Impaired Children, and the One Organic Movement.

VIDEO | $1.5-B ADB loan to help support Philippines’ efforts to address Covid-19

A US$1.5 billion dollar loan from the Asian Development Bank (ADB) will help the Philippines support its Covid-19 response.

This was explained by Kelly Bird, ADB country director for the Philippines, in a video interview held in April 2020 that was produced and posted by ABS-CBN News on its YouTube channel.

“This loan is budget support,” Bird said on the 3:50 mark of the video. “It goes straight to the Treasury. It’s commingled with government’s own funding.”

“We don’t earmark this loan to particular programs,” Bird added. “We are very confident that those programs are implemented in a very challenging time.”

The US$1.5 billion loan is the largest so far given by the Manila-based multilateral lender to its developing member countries. Besides the Philippines, Indonesia also received a loan of the same amount for its efforts to address Covid-19, Bird said.

Approved in April, the Philippines’ loan is subsumed under the ADB’s Covid-19 Active Response and Expenditure Support (CARES) Program.

The loan package aims to lessen the adverse impacts of Covid-19 on the health, incomes, and economic opportunities of Filipinos.

The loan package is co-financed by the Asian Infrastructure Investment Bank (AIIB) which has provided separate funding worth US$750 million.

That US$750 million loan will be scrutinized by a special project of Social Watch Philippines called the Citizens’ Monitoring of Financing for Covid-19 Response and Recovery: Focus on the AIIB Loan.

The project is called The Covid Loan Tracker.

To learn more about the project, please read the Project Brief.