#1Impacts of COVID-19 on Households in the Philippines Results from the Philippines COVID-19 Households Survey Round 1 - August 2020 THE WORLD BANK IBRD IDA WORLD BANK GROUP DEPARTMENT OF FINANCE THE PHILIPPINES * REPUBLIKA NG PILIPINAS HAYAN AT PA NAT PAGPAR Australian Aid REPUBLIC COF#2Background The Philippines reported the first COVID-19 case on January 31, 2020 and by March the virus spread to contaminate over 2,000 people. The Government imposed strict community quarantine measures by mid- March 2020 to contain the outbreak. Enhanced Community Quarantine (ECQ) areas I General Community Quarantine (GCQ) areas Mid-March May Modified Enhance Community Quarantine (MECQ) areas Modified General Community Quarantine (MGCQ) areas July Early-August Source: Republic of the Philippines Inter-Agency Task Force (IATF) on the Management of Emerging Infectious Diseases#3Background • The economy contracted by 9 percent in the first · • • • half of 2020 due to COVID-19 quarantine measures. Private consumption is expected to shrink in 2020 by 6.9* percent due to income losses, poor consumer confidence, and slow recovery in economic activities. Unemployment attained 17.5 percent in April 2020, triple its level in the previous quarter. Despite the government's efforts to mitigate the negative effects of the pandemic on poor and vulnerable households, the outbreak and containment measures are likely to have severely affected households' livelihoods. Up-to-date evidence is required to assess these effects and inform policies to protect vulnerable populations. 20#4Philippines Real Time Monitoring of COVID-19 Impacts Household Surveys Quarterly phone and self- administered web survey to monitor welfare changes in households Firm Surveys Quarterly self- administered web survey to monitor impacts on firms’ operations, sales and employment as well as adjustment mechanisms Community Surveys Qualitative surveys to better understand local context and to identify most vulnerable groups Implemented by the World Bank in collaboration with the Department of Finance (DOF) and the National Economic and Development Authority (NEDA) and support from the Australian Government.#5Highlights (1) JOBLESS Employment • One in four household heads (who used to work) no longer works. Unemployment hit the construction sector the most (31% experiencing employment loss), followed by accommodation and food services (26%) and trades (25%). The highest rate of job losses were in Luzon Regions. • Over half of those who continued working experienced disruptions. Income & Livelihood • Share of households experiencing decreases in incomes were similar across all income groups. • . Overall, among households' heads still working, about 47% have experienced reduced income. About 65% of farm and nonfarm businesses experienced a decline in their revenues. However, the share of households earning no income at all was higher for poorer households. . Share reporting no income was 15% among households in the lowest income quintile vs. 5% among those in the highest quintile. • About 24% of households reported receiving remittances prior to COVID-19, but 60% of them have received less or no remittances since the pandemic.#6Highlights (2) COVID-19 & FOOD SECURITY Health Food Security • About 40% of households were unable to buy essential food products. Households in the poorest quintile were the most severely affected 54% compared with 26% in the richest group. • Lack of money and mobility restrictions were among the main reasons constraining households' capacity to buy food. • About three in four households worry about not having enough food and one in three experienced hunger. • Around 37% of households in the poorest quintile were hungry and 18% went without eating a whole day. Health & Education ● . • One in three households who needed medical support were not able to obtain it. Lack of money and fear of contamination were the main obstacles. Only 20% of school aged children continued to be engaged in school learning activities during the pandemic. This drops to 11% among the poorest quintile compared with 34% for the richest one. About 81% of households will send back their children to school when school re-opens.#7Highlights (3) cash investment funds credit leasing loan @x Coping Strategies Access to Financial services ● Very few households faced difficulties in accessing financial services. Difficulties were essentially related to mobility restrictions and fear to contract the virus. Knowledge & Behavior ● Most households are aware of the pandemic and government actions. • Most households adopt prevention measures. • Safety nets Three in four households received assistance from the government (cash, food, and non-food). The coverage for the poorest quintile households reached nearly 90%, though about 60% of those in the richest quintile also benefited. Coping mechanisms Reducing food consumption was most common (75%) followed by delaying payment obligations (60%). There was a huge difference in coping mechanisms by income group: poorer households rely on reducing food consumption and borrowing from family/friends vs. richer households drawing down savings and taking formal credits.#8Survey 01#9The Philippines COVID-19 Household Survey Fieldwork • August 1 - 14, 2020 Implementation Self-administered online survey - respondents received notifications through text blast and social media ads - • Phone survey specifically targeted to lower income households from an existing list of the partner survey firm Questionnaire • • • • Demographics and housing characteristics Knowledge of COVID-19 (awareness and behavior) Government action Access to transportation • Access to food • Access to health services • Access to education • • Access to finances Employment & income sources (respondent and household head) Coping and safety nets#10The Philippines COVID-19 Household Survey • • Sample and representativeness: • 26,953 respondents (CAWI: 24,391, CATI: 2,562) in urban/rural and across all regions • 9,448 final sample used in analysis due to non-response in key indicators to identify location in the income distribution and reweighting calculations Sample weights computed based on Family Income and Expenditure Survey 2018 of the Philippine Statistics Authority Implementation plan Round 1 August 1-14 Round 3 Early February 2021 Round 2 End of November 2020 Round 4 End April 2021 160) 60#11Sample distribution of the FIES 2018 and HFS is similar Note: FIES is the Family Income and Expenditure Survey, which is used to estimate official poverty statistics. Urban Rural ■HFS unweighted ■HFS weighted ■FIES 2018 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% National Capital Region III Central Luzon IVa Calabarzon Rest of Luzon Visayas Mindanao#12■HFS unweighted HFS weighted ■FIES 2018 70% 60% 50% 40% ... even in characteristics 30% of household head 20% 10% 0% 18-25 26-35 36-45 Age 46 - 55 56 - 65 65+ None/Preschool Elementary grades 1 - 6 Elementary graduate High school undergraduate High school graduate Post secondary & above Education#13Demography 02#1470% 60% 50% 40% 30% Demographic profile of respondents 20% 10% 0% Men Women 18-25 26-35 Gender Age 36-45 46 - 55 56 - 65 65+ None/Preschool Elementary grades 1 - 6 Elementary graduate High school undergraduate High school graduate Post secondary & above Education#15Employment & Income 03#16One in four household heads who were employed in early 2020 are no longer working Continue working 76% Household Head Stop working 24 %#17Around 75% of household heads were engaged in any type of work in February 2020 • This declined to 60% in August. • Forced closure of business (due to quarantine restrictions or other reasons) caused 43% of the job losses. working not working Work status of household heads working working not February August#18Regions in Luzon experienced more job losses than in other areas 35 . About 31% of household heads in the National Capital Region and neighboring Regions III and IV-A who were working in February lost their jobs. These are the areas with high COVID- 19 cases. • Job losses were similar in urban and rural areas. 30 25 20 15 10 5 сл Percentage of employed heads who are no longer working in August (%) 0 NCR, 3, 4A Rest of Luzon Visayas Mindanao#19Industry and services were the most affected sectors Job loss by sector Agriculture . About 28% of household heads who were working in industry and 23% of those working in services lost their jobs, compared with 18% for agriculture. • Sectors that shed jobs the most are construction (31%), accommodation & food services (26%) and trade (25%) Construction Manufacturing Other industry Trade Accomodation and food services Transportation, storage & communication Other services 0% 10% 20% 30% 40%#20Job loss was experienced across all income groups • Job losses were slightly higher among the richest income quintile than the poorer ones. • This is because poorer households are more prevalently employed in agriculture, which was less affected by the COVID-19 related restrictions. Most of those in the 3rd and 4th quintile work in services sector that were able to adjust to home-based work. 30 30 25 20 20 15 10 LO 5 Job losses by income quintiles (%) 0 Poorest Quntile Q2 22 Q3 Q4 Richest Quintile Total#21Sectors with severe work disruption The Pandemic caused severe work disruptions About 52% of those working in August were not able to work as usual. education and technical . Some sectors in services ICT, activities enabled more home- based work. Information and Communication Education Food and Beverage Service Activities Water Supply; Sewerage, Waste Management Professional, Scientific and Technical Activities Arts, Entertainment and Recreation Real Estate Activities Other sectors in industry, transport and farming faced severe disruptions. Wholesale and Retail Trade Agriculture, Forestry and Fishing About 12% of those who continued Transportation, Storage, Postal and • to work changed jobs. Courier 0 20 40 60 80 100 ■ Not able to work as usual ■ Able to work as usual ■Working from home#22Working household heads experienced income losses Same/ more income 43% Continue working 76% Household Head Stop working 24% No income 10% Reduced income 47%#23Poorer households experienced more reduction in incomes Poorest Quintile ● Nearly half of household heads in the richest quintile saw their earnings increase or remain the same compared with 40% of those in the poorest group. • Around 15% of working household heads in the poorest group did not have any income, but it remains unclear whether this is because they are in unpaid occupations or if their employer could not pay them. Q2 Q3 Q4 Richest 0 20 40 60 80 100 ■Increased Same Decreased ■No income#24100 Income loss was more prevalent amongst household heads working in agriculture . Nearly 70% of those working in agriculture experienced a decline in their income or did not receive any income. • Incomes remained on average more stable in services than in industry, where mining and construction experienced severe income declines. • However, households whose head works in some services subsectors such transport, food and accommodation have faced large income reductions. 90 80 70 60 00 50 40 30 20 10 10 0 Agriculture Industry Services ■Increased Same ■ Decreased ■No income#2580 70 00 60 50 50 40 Proportion of household heads (%) Households operating farm businesses were severely affected by revenue losses • About 30% of households in the poorest quintile, and 23 % in general population operate farming businesses. • About 65% of these households reported a decline in their incomes and • another 15% did not have any revenue. While the losses were felt across all income groups, they were more prevalent among the poorer ones. 20 10 Q4 Q5 - richest Total ■Experienced decline in revenues Poorest Q2 Q3 ■ Operate farm business#26Households operating non-farm businesses also experienced income loss • One in five households operate a non-farm business. • Better off households tend to operate these businesses more than poorer ones. • Over 60% of these households reported a decline in their revenues and another 13% did not have any income. • The declines were higher among the poorer groups, where 67% of households experienced a fall in their revenues, compared with 58% in the richest group. 80 70 70 8 60 Proportion of household heads (%) 50 50 40 40 30 20 10 0 Poorest Q2 Q3 Q4 Richest Total Experienced decline in revenues ■ Operate nonfarm business#27Many households suffered reductions in remittances receipts • About 24% of households declared usually receiving remittances, with half of them . ● domestically and the other half from abroad. Domestic remittances are more common among poorer households and foreign remittances more common among better off groups. About half of households who usually receive remittances saw a decline in their receipts in August and 11% did not receive any remittances. While reduction in remittance incomes are felt across all groups, higher proportion in lower income groups. Proportion of household heads (%) 80 70 00 50 40 20 10 Poorest Q2 Q3 ■Receive remittances ■ Declined Q4 Richest Total ■Did not receive#28Food Security 04#29Poor households faced severe constraints in buying staple food Proportion of households (%) 50 14 45 40 35 30 25 20 15 10 • About two in five households were not able to buy rice, meat, fish, eggs or vegetables. • The constraints were significantly more pronounced among poorest households than better off ones. Poorest Q2 Q3 Q4 Richest Total ■Rice ■Protein ■Fruits & Vegetables#30Financial constraints were the main liming factors to buy staple food 100 90 880 80 70 60 2650 50 40 30 20 10 0 Poorest Richest Rice Total Poorest Richest Total Protein Poorest Richest Total Fruits & vegetables ■Lack of money ■Increase in price Other ■Local markets closed Mobility restrictions • Over 70% of households reported lack of money as the main reason they were not able to buy rice, protein or vegetables. Other limiting factors were mobility constraints due to limited transport, restrictions to go out or fear to contract the virus. • Price increases limited access to fruits & vegetables for poor households.#31Households with reduced income experience food insecurity Households experiencing food insecurity (%) 90 80 88 70 70 60 60 About 70% of households reporting lower or no income ate less than usual. About 30% of these households experienced hunger. About 15% have experienced not eating the whole day. 50 40 40 30 20 10 • 0 Worried about not having enough food Ate less than usual Ran out of Food Hungry but did not eat Went without eating the whole day ■HHs w/ reduced or no income ■HHs w/ no change in income#32Human Capital 05#33Obtained needed medical treatment No 33% Yes 67% Reason for not obtaining medical treatment Lack of money / Cannot afford, 46% Afraid of contracting COVID-19, 28% Mobility restrictions, 13% Facility full/lack staff, 10% Others, 2.8 One in three households who needed medical attention was not able to obtain it Lack of money was the primary reason for not getting medical treatment ....followed fear of contracting the virus . . . . and constraints in health care facilities.#34Very few children were engaged in learning activities during quarantine 90 80 70 ● . About 80% of households with school aged children(6-18) attended school before the pandemic struck. Of these, only 20% continued to be engaged in learning activities during community quarantine. • This was even lower among households in the bottom quintile (only 11%). • Of those who continued learning, distance learning was the most cited mode of instruction. 00 60 50 40 30 20 10 Share of households with children in school, by quintile (%) Poorest Q2 Q3 Q4 Q5 Total Attending school in March ■Continued Learning#35Among housheolds w/ children attending school before the pandemic... 81 percent of households with school age children will continue schooling when schools re-open Continuing 81% Not continuing 19% Afraid to catch COVID-19, 14% No gadget/internet, 2% Lack of money, 2% School not ready, 1% Others, 0% About 80% of households in the bottom will continue schooling for their children Fear of contracting COVID-19 is the top reason for not continuing#36Access to Financial Services 06 90#37Tried to Acess Financial Service (%) One in three households tried accessing financial services • Remittance agents and ATMs are the most used channels (36%). The gap in access to financial services between income groups varies by the channels for financial services. • The gap is smallest among microfinance/NGOs and cooperatives as well as remittance agents. • In contrast, poor households lag far behind in accessing ATM, mobile money, and banks. Remittance Agent ATM Mobile Money Bank Microfinance, NGOs Cooperatives 0 All 10 20 30 40 50 50 ■Q1-poorest ■Q5 richest 60 00#388 Of the households accessing financial services, very few faced restrictions 10 L + Proportion of households facing difficulties in access to financial services (%) ♡ About 5% of households declared having faced problems in accessing bank, mobile money, money, microfinance, ATM or any other financial services. Better-off groups seem to have felt more restrictions than poorer ones, probably because they use more these services. • Restrictions on going out and fear of contracting the virus were the main reasons households could not access financial services. Poorest Q2 Q3 Q4 Richest Total#39Knowledge and behavior 07#40Almost everybody is aware of COVID-19 . About 99% have heard about the pandemic About 9 in 10 received information on COVID 19 from immediate circle (neighbors, family and friends), government and television • 1 in 2 cited television as their main source of information Social media Media Government Community Have received information on COVID -19 from: Neighbors/family/friends Health clinic/hospital Church/pastor/traditional healer Local government National government Television Radio Website Poster/billboard/flyer/leaflet Newspaper Facebook/twitter/social media SMS/text 0% 20% 40% 60% 80% 100%#41Awareness of government action (%) Awareness on government action is high Advised citizens to stay at home Closure of schools and universities About 9 in 10 are aware of the measures taken by government to curb the spread of the virus. • Action is mainly attributed to • the National Government. 7 in 10 are satisfied with government (both national and local) response. Imposition of lockdown, closed roads or added police Imposition of curfew Restricted public gatherings Restricted travel whether local or international Disseminate knowledge about the virus 20 40 60 ■National Government ■Local Government 60 80 100#42Wore a face mask ☐ Filipinos adopted prevention measures Washed hands more than usual Practiced social distancing • Almost everyone has adopted basic prevention measures (wearing face mask, washing hands, social distancing). About 8 in 10 households have stockpiled on supplies. Stockpiled food, water and other supplies Stayed home because you felt unwell Visited a doctor/hospital Cancelled or postponed medical/dental appointment 0% 20% 40% 60% 80% 100%#43Safety Nets & Coping Mechanisms 80#44100 . . Safety nets helped many vulnerable households Three in four households received assistance from the government (in the form of cash grants, food and non- food items). Coverage was very high among the poorest groups with about 87% in the bottom quintile receiving government assistance. Support from family and friends was also high. 90 90 80 70 70 60 60 50 40 40 30 30 20 20 10 10 Received Assistance by Quintile (%) Q1 - poorest Q2 Government Q3 Friends & Family Q4 Q5 - richest NGO/church Total#45Household's Coping Mechanism (%) Consumption reduction was among most used coping mechanism by poor households The most common coping mechanisms used by households include: • • Reduce consumption or shift to cheaper alternatives. ✓ About 4 in 5 of households in the bottom quintile reduced their food consumption. Three in five households delayed payment obligations. More than half of the households used their savings. About half of the households have borrowed from family and friends. Reduced consumption: food Reduced consumption: non-food Delayed payment obligations Relied on savings Borrow: Family & Friends Borrow: Credit card Borrow: Financial institution 0 20 40 60 80 88 Q1 - poorest ■Q5 richest ■ Overall 100