 One year ago, our country was forced to fight a pandemic, a new virus that was all uncertain. Our government implemented this pandemic plan and it created the interagency task force for emerging infectious diseases to manage this global problem. Almost a year ago now, we are experiencing our second surge and again we are struggling as we fight this particular pandemic and all the uncertainty that goes with it. Today, in health issues, we will tackle the two most important balancing acts that our government, the IATF and our officials have been trying to do since last year. The balance between health and economics. Our guest for today is Professor Emeritus of the U.P. School of Economics, Professor Ernesto Perna, former Director General and Secretary of the National Economic and Development Authority. Good morning, Secretary Perna and thank you for joining us in health issues. Good morning, EVP Ted Derbosa, highly respected and famous. Thank you very much, Secretary Perna. Last year, around this time, you decided to go back to the akadim and the private sector after the several hours of debates probably in the IATF, I can imagine. And the first question I would ask you as an economist, as a famous economist, sir, I read your papers when I was Under Secretary of Health. I read a lot of papers on health and development and economics and it was also our papers for basis for implementing universal health coverage. Sir, have you ever experienced anything like the effects of this pandemic to our Philippine economy in the past? Well, not in my memory. I think this pandemic is without precedent or precedent. And I think it's, no, most Filipinos would not have had any other experience that is worse than this pandemic. I mean, many Filipinos, those born or the baby boomers or those born during the war would not have experienced this kind of thing. That's correct. Actually, experiences of economic troubles. I just heard stories in the dining table from my parents who lived through World War II. Yes. Correct. So when we were discussing before, I asked you before why you decided to walk back to the university. I said, what are the reasons? And you mentioned to me that it was about philosophical and developmental differences with the strategy that was going. I think a year on now, I think you'll be more than willing because I think you were proven when I. Sure, sure. So can you explain and define what that philosophical economic development differences were? To be happy in government work, you have to be in a friendly, convivial and smooth rapport with other members of the economic team. Because that was where I had to do most of my work. I had to work with the members of the economic team. And in the economic team, other people are finance people or budget people like Avisado. And Dominguez is more a finance person. And I was the economist. And there's quite a difference between a finance person and an economist. Because an economist looks at the big picture and whereas the finance person looks at just the financial aspects of a project or any undertaking. And for example, in the case of the COVID-19 pandemic, my preference and what I was trying to push was we should have started. Big bang in terms of spending so that we could ramp up or really rapidly enhance our health system capacity in terms of social infrastructure, hospitals, testing centers and so on. As well as our human capital, our healthcare workers. This is what our Asya neighbors did. They had a big bang approach, meaning they tried to nip the bud at the very beginning of the pandemic. And that is why they came out much better in a much better situation now than we are. Many people in this second surge or second wave of the pandemic, they say that these surges are also happening in other parts of the world. No, we should not compare ourselves with other parts of the world, especially the European and Western countries. Because they're different. We should be comparing ourselves with our Asya neighbors. And if we look around in our Asya neighborhood, there are no problems they're encountering now, like what we are encountering. And that is because they really addressed, they came to grips with the pandemic very early. And that is why if you look at the spending pattern for a COVID response among Asya countries, we have the lowest numbers. In terms of total COVID spending, COVID response spending in proportion to as a fraction of GDP, we have the lowest. And also in terms of per capita spending, meaning this spending per person. So that is why we have been really hobbled by this pandemic. And in the case of the other countries, what they did was they ramp up health system capacity right away. For example, Vietnam had very few hospitals. But in a matter of a month, they were able to generate so many hospitals. Not first class hospitals, but hospitals that are makeshift hospitals or modular hospitals to be able to handle the cases that came up. And the same thing with the other countries. And that is why how many deaths was there Vietnam? I think only two deaths in Vietnam, five deaths in Thailand and maybe Malaysia, single digit, not even double digit. And Indonesia is a little bit closer to our problem, but also Indonesia has handled, given a huge population and a huge territory, Indonesia has also done quite well compared to us. So the thing is we have a large population, the highest poverty incidence among Asian countries, the highest inequality. So the more reason we should really have done a big bang approach to the COVID as early as February. Or maybe even March because we really started March already, but they started February is other countries. And as I said, big bang approach. At then we were spending in dribs and rubs over time. And that is why you can see there are data on this which have been monitored by the ADB over time. And they show that the Philippines really has been rather conservative in approaching the COVID pandemic in terms of spending. Spending to enhance the health system capacity, improve the remuneration of our healthcare workers so that they don't leave. Many would have stayed behind if their remuneration were more decent. So then instead of too much lockdown, we should have done testing, tracing, isolation and treatment. And then do selective targeted lockdowns. That is what the other Asian countries did, not kind of umbrella lockdown, which really cripples the economy. Health is economy because health and economy are inextricably linked. There is no trade off between health and the economy. Whatever you spend for health is going to benefit the economy. Why? Because you spend on testing and tracing and all that and improving your social infrastructure, hospitals and other health centers. Then that also provides a stimulus to the economy. At the same time, when the health system capacity is improved, then workers are more healthy, they are more productive. So it's better for the economy. It's a symbiotic relationship between health and the economy. I cannot argue with that. In fact, when I listen to you, that's exactly how I feel when I talk to a financial person who looks at healthcare as a cost and a budget person who looks at healthcare as an expenditure. But when you're talking to me, you're saying health is actually an investment. We should invest in the health system because it will be good for the economy. And I cannot argue with that. That to me as a health systems person, I can understand that very clearly. So there were difficulties with this. They eventually implemented everything you said, but they were not nimble and fast about it. Because they ramped up hospitals, they ramped up. They spent for PPEs, equipment to renumeration for doctors and nurses. They also ramped up testing. But I think we were very slow. How could we have speeded this up? Is it our bureaucracy? Is it problems in procurement? Is it the way we respond to emergency? What are your views on the speed which we eventually implemented the response? I have noticed that from budgeting and then disbursement and then spending, there are too many lags. Notice that the spending at the Ayuda for the first week of the lockdown had not been distributed. It's only in the second week. So there is a one-week lag for an Ayuda. That is really a matter of life and death for many. The one given is the guidance only. I think it's going to be delivered today only. So budgeting, obligating, disbursement and then spending. May mga lags, I don't know why it is that like that. I know you are familiar with the IATF, Dr. Ten. I was also part of that before I stepped down. I really think the IATF should have been a combination of government and the private sector. Because there are many experts in the private sector. Not only medical doctors but also scientists should have been or should be in the IATF. Instead of too many, too many from government and most of them military. So that is another thing that we could have now. We could have modified over time. Because it's clear that we need expertise in science, in medicine, not in terms of lockdowns. That's absolutely correct. I'm an emergent, my field is disaster medicine and emergency medicine. And I study these things and I say, you know, it's not about whether you did the response or not. It's the one who did an early or late response. Yes. So clearly stated, we were not very nimble in the way we responded compared to our neighbors like Taiwan, Hong Kong, Singapore, Vietnam event and Malaysia. So they responded quickly and we responded. We also did the same things that they did but we didn't do it as fast as they did. I think that's really the way you have to be ahead of the pandemic of the virus rather than be following it. Anticipatory and foresight planning is what's needed. And also virtuous impatience, sense of urgency. Sense of urgency is very important. That's emergency and sometimes in emergency we take risks. Because of our impatience, I will not go check the book on what to do on a person who is crashing in front of me in the emergency room. I'll have to do what I can immediately, given the medicine I know to treat him to save his life. So my concept of a pandemic is the same. A pandemic is just a population and you're treating it with an infection. You need to respond fast or else you'll be left behind. So what solutions or what were the things that you think should change after this? We will review this whole pandemic thing. I've learned so many things being part of the national task force which the IATF formed. But I have so many ideas on how pandemic response of a government should happen. And you mentioned one of them, the partnership with the private sector. That's very important. Any other ideas? I remember that the private sector, they were quite nimble and very quick in responding at the start of the pandemic. They provided a lot of consumables as well as necessities like PTEs. And they also provided even quarantine facilities. They're willing to cooperate. Kailangan lang na yung government should have a friendly relationship with the private sector. May paga a bit of an adversarial relationship between the government. I noticed that. For example, the way ABSCBN was shut down was really, I thought that was counterproductive. And also the way Manila Water and Manila were... Life their contract. Lasted. Oh, yeah. Hindi naman fault ng private sector proponents. They happened in two previous administrations. At that time, it was necessary, the kind of very liberal concession agreement to these private sector proponents for water was needed because we were really in dire straits. So, you know, every time that happened in cabinet meetings, this is just between us. I was really feeling very uneasy. I kind of thought that instead of encouraging the private sector, we are dissuading them. We are ostracizing the private sector, which is wrong because if you break down GDP, 75% is accounted for by the private sector. Businesses and the households. Only 20% to 25% is contributed by the government in terms of GDP. So, the engine of economic growth is the private sector. And the government is supposed to be providing the enabling policy environment. Yun ang mindset ng economist. Professor, you mentioned two things. No, the private sector. And you mentioned in the private sector, one very important thing that we in the disaster world look to in times of a pandemic. I've been taught that the way to fight a pandemic is through a command structure collaboration, which is the partnership with the private sector. And the third part, they tell me the third C is communication. Yes. To knock down a major mainstream media outlet in the middle of a pandemic that communicates with the people. They have been too much, right? And it affects the way we communicate to people. Is that correct? Yeah, it's really bad timing. I mean, this was the sole source of news and information for the poorer segments of the population in the outlying areas, in the provinces. So, talaga parang it was anti-poor rather than pro-poor decision. There was another thing that I noticed during the pandemic is that the countries that actually responded very well had a head start. Because if you remember in 2012 or even earlier in 2009 when we had the SARS, countries around us like Vietnam, Hong Kong, Taiwan, Singapore were all severely affected by SARS. Yes. And then they were followed with this avian influenza. So, they actually had a lot of systems development that we didn't see. And because our country didn't get the avian influenza early on, we only had one case of SARS. We never invested in the health systems that these guys started to kick in. That's why they responded nimbly because they had a head start. What do you think of this? Yes, I agree. That is related to what I said about the Big Bang approach at the start of the pandemic. As early as February, they already decided to spend Big Bang rather than little bits and pieces over time, which is what we did. So, it's a repetition. And we have severely under-invested in our health system capacity, in our health infrastructure. And we have about the data across Asian countries. We have about nine beds per 10,000 population. Vietnam has 17. Correct. Malaysia has even much higher hospital beds per 10,000 population. So, talagang na iwanan tayo dito. And instead of, I agree with the build-build-build physical infrastructure projects, but then we have neglected the social infrastructure projects which cover hospitals. And that is why we're having this. Now, I noticed that with this second wave, we are now putting up modular hospitals, makeshift hospitals. We should have done that before. Beginning. China built a 1,000 bed hospital. That's right. Secretary Burnett, do you know that I wrote Secretary Duque as Executive Vice President of UP in March? And I have that letter. I was asking him to already build PGH Dileman. Which I'll remember for a 700 bed. I told him in the letter, I said in the letter, it is time to build this facility. If we cannot build it, let's get our Chinese counterparts to help us build a 700 bed facility in two weeks. But I never got a reply. The other thing you explained is about the economic effects of the pandemic. And we did the lockdown approach which was good in saving lives because our mortality was low. I just discovered after implementing this, that's why our economy went down. People told me that the whole GDP of the Philippines was actually, I think 25% of it is NCR. Another large percentage was Calabar Zone and Region 3. And then Sibu and Davao contributed a little more. So the place where we implemented the lockdown, ground zero of this pandemic is really the economic hub and we stopped economic growth at that time. No, actually NCR, Dr. Ted, accounts for 35% of GDP. Even higher. And then Calabar Zone, around 19% of GDP. 50% already of our GDP. And then Central Luzon, around 15%. So NCR, Calabar Zone and Central Luzon, they account for 2 thirds of GDP. 63% to be exact of GDP. So malaki, malaki talaga. Stopped economic activities in an area. This was never realized by even my colleague doctors. Who says life first before we can rebuild the economics doesn't realize the major impact of a strict community quarantine or a lockdown policy to fight a pandemic. We had this more agile and modern testing, tracing, isolation, treatment. Like Korea, for example, and the other Asian countries. Parang they were using technology. So with that kind of approach to testing, tracing, etc. There's no need to have a big lockdown. Because parang, you are able to isolate the problem instead of getting everybody to be under a lockdown. And then the economy workers are not able to work and get their life support in terms of their incomes. There's another thing in what you've been discussing with me this morning. It's the fact that the hub of economic activity seems to have concentrated on a very small land area in the Philippines. Which is the national capital region. And I'm actually surprised to see that we're now considered one of the highest population densities for land space. I heard we have overtaken DACA in terms of the number of people. So it seems that all economic activity of people from the province will all go to Manila. You want to start a business, you started at NCR. So would you as an economic planner think that one of the things we need to do to fight a future pandemic is to decongest mega cities like NCR? Oh yes, I think we should have done that a long time ago. We should have really, you know, we should really have animated our regional centers like Kasibu, Ilo Ilo. So that the congestion is distributed across the country. And it's also better for, you know, for rich management and also for reducing inequality. Okay, okay. Kasibashadong concentrated sa Manila. So the rest are really lagging behind too much. Yes, I think our problem is that our initial what we call initial conditions is that we have a large population. We have a very dense, you know, national capital region and other Sibu is also quite dense. And therefore, with a large population that is densely settled in a limited territory like Manila and Sibu and maybe Davao and other congested cities, you have a high poverty incidence, high inequality. So it's very difficult for you to, it's very difficult for people living in informal settlements to be physical distancing. How can you, how can you have physical distancing when, you know, there are 10 people in a small room? And also the other thing is You have to work to ride a bus that is full. That's right. And also how can you do a frequent hand washing? There's no water. They have to save water na parang they can brush their teeth. So hindi talagang mahirap yung physical distancing and then hand washing. And maybe even ang mga masks, they have to be washed every day to be usable the following day. But that cannot be done for many, you know, for many in the informal settlements. Professor Perna, you're going to another part of economics, which is your expertise, which is demographics. You know, we're going into where people, I mean, the politicians let this happen. They will not remove the informal settlers. They will not resettle them and use them as power voting blocks during times of elections. And we're having elections again next year. So I'm very sure in the next few months, no informal settler will be removed out of their location. Yes, yes. It's incentive compatible for politicians. I love your paradox. Incentive compatible for politicians. There's no incentive for them to encourage their population to practice family planning. Because the more people there are in their district, the better for them in terms of dynasty. I've had mayors that fought with our reproductive health law. That's right. Alamo, you know, if we had followed, well, we started ahead of Thailand by one year in terms of family planning. But we did not sustain it. Thailand sustained it. Thailand is only 70 million now. 70 million, 68 million net or 70 million. Thai 110 million. So it makes a lot of difference. And we have more mouths to feed. We have more mouths to course, more graduates to fill in for jobs that we don't have, et cetera. And the problem also is too many, you know, this large population, many of them are born from poor families, teenage pregnancies ngayon, which results in stunting, stunted children. Stunted growth, yes, yes. So talagang, you know, it's really, I think. And I will add one more. These areas of informal settlers were also the petri dishes for a pandemic. All you have to do is introduce one virus and everybody gets contaminated. Yes, yes, that's right. Sir, but there's another thing that was happening prior to the entry of the pandemic. We were struggling with another epidemic and it was the African swine fever. We had ASF that was decimating our hog and farming industry, which affected our food security. So today, we're paying the high price of a very expensive pork in our markets. So we're like a double whammy. What can you say about this? Yeah, I don't know why it took so long for them, for our authorities to address the African swine fever. That started long before the pandemic. Correct. So, you know, well, there are just too many puzzles that we have to sort out why we are in this. Why we are where we are. Yeah, it's been a very, very interesting discussion. You educated me. You're truly a professor emeritus. You educated me about economics as a health person. And I'd like to hear from you what you would suggest in terms of, for example, there's a new president, a new administration in May in this coming June. What would you advise this particular incoming administration, whether it's still a Duterte administration or some other one? What would you advise them in terms of what to plan, what to do with the second search? We're still raging with the second search. What would you do? What are the things you would invest in? And what will be your recommendations to the incoming leaders of this country? I would strongly suggest that we really invest more in our health system capacity. Pulang talaga. And we have to be fair to our healthcare workers. Our healthcare workers are really lagging behind our Asha neighbors. So, I mean, we are being unfair. That's why we cannot blame them. They have to go overseas for greener pastures to feed their families. So, why can't we do that? We were able to raise the salaries of the military and also teachers. But how about healthcare workers? These are vital cogs in our system, healthcare workers. Can we reduce them with the brain drain? Yeah, and to minimize the brain drain. And then, as I've said, the health system capacity, we have to have more hospitals. Not only in Metro Manila, but also in the provinces. And also hospitals that are well provided for, not only with human capital, healthcare workers, but also with equipment and other materials needed for healthcare. So, that's very important. So, this has been something neglected. You know, health system capacity nothing. Secondly, I think we really have to modernize our testing, tracing, isolation, and then treatment. I mean, it's not rocket science. We just follow what the other asian countries have done in terms of more modern approach to testing, tracing, and so on. And then, of course, I think the next administration or whoever comes next, kailangan talagang anticipatory and foresight planning. Plus, sense of urgency. Important talagang sense of urgency. Hindi, pwede kasi ang bukas na sa kanayon, ganoon. Para yun ang ano natin na. That has been our ethos, yung lack of sense of urgency. And that is what I call in my, the title of my book is Virtuous Impatience. Virtuous Impatience is the other name of sense of urgency. So ito lang naman. I mean, the things we have to do is not, as I've said, not really rocket science or going to the moon or going to Mars, ganoon. It's done, you know, it's done. It's a very common, it's a very common practices in other countries. So why can't we do it? Filipinos are bright people too. So naka kahia naman we are lagging behind these other countries for many things that are common sense. Yung ano, that is my, my, my, my, you know. And, you know, I don't know how this second wave is going to play out, but I hope it doesn't, you know, stay long. And we really have to, yeah. And we have, we have too many, too many lessons to learn already from last year. Why can't we, you know, apply the lessons we have learned from last year to the current wave that is raging in our country? Thank you, Secretary Perna, Professor Perna. You've given us a lot of information. This deserves another episode. I think we will get you back sometime soon. Now we need to talk about this in terms of how health and development are truly married to each other as a quote from Secretary Perna. And also the importance of sense of urgency for virtuous impatience. Not ladies and gentlemen, we'd like to thank our guest for today, Professor Ernesto Perna for giving all his wisdom, insights, what I call droplets of wisdom to the, to the economics and the health issues of today. Ladies and gentlemen, thank you very much for joining us here in health issues. Have a good day, everyone. Thank you for having me, Dr. Ted. Dr. Ted, PVP of UP system, of the UP system. Thank you, sir.