30 April 2013
Debt & Public Finance
The Freedom from Debt Coalition asserts that the unchanging poverty incidence is a result of persistently high inequality in the country. It should not come as a surprise.
On April 23, the National Statistical Coordination Board (NSCB) revealed that poverty incidence, or the proportion of people below the poverty line to the total population, during the first semester of 2012 was estimated at 27.9 percent. In 2006 and 2009, first semester figures were estimated at 28.8 percent and 28.6 percent, respectively. This means that poverty incidence in the Philippines has remained unchanged as the computed differences are not statistically significant, according to NSCB.
As expected, President Benigno S. Aquino III is in a state of denial. Newspaper reports quoted him as saying: “I have a bit of a doubt since they used the wrong population data, which is the basis for computing per capita income.” He also admitted never having the chance to study poverty incidence thoroughly, but questioned the 2009 figures which could not be compared to the 2012 figures.
Presidential Spokesperson Edwin Lacierda attributed the latest poverty incidence to the poor development of agriculture as the main culprit, while the Asian Development Bank, through its senior country economist, Norio Usui, attributed to lack of jobs the main cause of this economic malignancy.
While both reactions contain a piece if the truth, they missed the most essential point. While unemployment leads to poverty, unemployment itself is a result of a long-standing and deeply rooted condition of high inequality of access to, ownership and control of capital, technology, knowledge and land. This is the same with the sluggish agriculture.
The lack of a strong industrial base which ADB’s Usui pointed out is the outcome of our colonial past when American colonizers refused to allow us to industrialize, and of our continuing past of highly unequal competition between multinationals and local industries forced upon the country by a regime of liberalization which began in the middle 80s structural adjustment program (SAP) and which culminated in the Philippine entry to the World Trade Organization (WTO). Most industries are highly monopolized or under the thumb of oligopolies which are combinations of big regional or global investors and big local partners or dummies. They crushed medium and small scale firms where most Filipino entrepreneurs are involved.
The failure of Philippine agriculture to develop and create more employment and livelihoods is the failure to carry out thoroughgoing land reform and modernization of agriculture and fishery, including the promotion of many small and medium scale agribusinesses. Until now, despite a second extension of the Comprehensive Agrarian Reform Program (CARP) since 1988, most of the big prime agricultural lands held by powerful oligarchs are not yet covered by the reform. Credit is highly scarce for small farmers and fishers, even for medium scale agricultural entrepreneurs.
Moreover, access to quality education (or the lack thereof) further exacerbates gap between the rich and the poor. One (1) out of eight (8) Filipinos, or around 6.24 million Filipinos, aged between six (6) and 24 is an out-of-school youth (National Statistics Office-Annual Poverty Indicators Survey, 2010). Even for the “luckier” ones who get to go to school, only seven (7) out of ten (10) finish elementary while only five (5) of this ten (10) will graduate from high school (Basic Education Information System, 2008-2009). Only two (2) out of ten (10) high school graduates proceed to college (CHED, 2010).
While on the one hand the costs of private education continue to rise beyond the means of a minimum wage-earning family, on the other, the capacity of public education institutions to absorb the brightest and promising young minds continues to be strained by the withdrawal of State support. In both sides of the fence, the poor is the one left out, stuck in poverty trap for generations. Despite all the lofty promises of leaders and the ubiquitous acknowledgment of the right to education by all sectors of society, in praxis, education is not a right but has become a commodity – access to which is dictated by one’s capacity to pay. Education, in fact, is not the perceived equalizer, but has become a means promote the same chronic inequalities in society it supposedly promises to correct.
Thus, it should not come as a surprise that inequality remains rampant and embedded in the country. Among ASEAN countries, excluding Brunei Darussalam and Myanmar, the Philippines recorded the highest income inequality in 2009 (0.448), followed by Singapore (0.425), Thailand (0.425), Cambodia (0.407), Indonesia (0.394), Malaysia (0.379), Vietnam (0.378) and Lao PDR (0.326), according to the Human Development Report 2009. RICARDO B. REYES
Freedom from Debt Coalition