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Press releases from Malacañang usually tell us of the Philippine economy making a lot a success in almost all areas of concern being addressed by the government, be it land reform, fighting inflation or bringing down the unemployment rate. But we finally have Albay Governor Joey Salceda, the economic adviser of President Gloria Macapagal-Arroyo, admitting the failure of the present administration to bring down the country?s high level of poverty.
Salceda was the same adviser of the President who denied the existence of a P330 billion fund intended to stimulate the economy last year in the face of the deteriorating condition of the economy because of the global recession. He was also the same guy who called the President a lucky ?b--h? for having surmounted all attempts to impeach her for her misdeeds.
Salceda says that his biggest frustration as a presidential adviser is that after 34 quarters of uninterrupted expansion of the Gross Domestic Product (GDP) from the first year of PGMA rule in 2001 up to last year, nothing much happened by way of reducing the number of our poor people mired in poverty. According to him the rosy figures on the economy cranked out by the government could not hide the fact that there are more poor people today than when the President started her term.
Using government official statistics on poverty, we find that in 2000 there were only 25.5 million people considered living below the poverty line or a poverty incidence equal to 33 percent of the total population. This increased to 27.6 by the time the government made its last estimate of the country?s poverty in 2006 which still corresponds to 33 percent of the total population. Another poverty study is supposed to be made for 2009 using data generated from the 2009 Family Income and Expenditures Survey (FIES) but the result is not yet in. So far, however, most recent studies on poverty conducted by other groups, like the Social Weather Station (SWS), shows that the extent of poverty in the country remained at a high level.
In its press releases and paid advertisements, the Arroyo administration boasts of having the highest average growth rate in GDP of all presidents since 1966. If this is true, why are there so many Filipinos still in poverty?
According to Salceda, he and the rest of the President?s economic management team believed that economic growth would have been enough to lift many of our people out of poverty but that this is being prevented by structural constraints that allowed the rich to corner much of the benefits from economic growth without the expected trickle -down effect actually reaching the poor.
Salceda?s explanation for this failure includes the continued rapid growth of our population and that despite deregulation, liberalization and privatization, the structural defects of the economy persisted which the oligarchs exploited because of the weakened state caused by such scandals as the ``Hello Garci?? case and other reported misdeeds of the president and her trusted people in government.
More than this, however, we should also realize that achieving faster economic growth, while necessary, is no guarantee to cut down the nation?s poverty. The source of growth also matters. In production, growth can come from agriculture, industry or services and from within specific sub-sectors of a particular sector. It may happen that the growing sector or sub-sector happens to be less labor-intensive and therefore brings about only a smaller number of people employed and received income, such as in mining, for example, or in the high tech service and manufacturing activities.
Another explanation is that most of the newly employed in the growing sector or subsector may come only from the well-educated and, therefore, relatively well-off families such as the English-speaking college graduates taken in by the fast growing Business Process Outsourcing industry. Many of our poor people barely have a few years of schooling that qualifies them only for low-paying manual work or service activities in the non-formal sector. Low level education and low-paying jobs guarantee many people will remain in poverty in their lifetime.
But the biggest problem hindering the Philippines in fighitng poverty is the fact that much of the country?s GDP and its growth come mainly from the National Capital Region and nearby CALABRZON and the Subic-Clark area. Put more investments in these areas to boost GDP and you can be sure that only those mostly out of poverty already will benefit.
Globally, poverty has been in decline in the last two decades but that is mainly because China and India, where most of the world?s poor are found, also happened to grow fast economically in the last two decades. So where economic growth comes from really matters. The lesson is that unless we do something for poor regions outside NCR, CALABARZON AND Subic-Clark, nothing much will happen in our fight against poverty.
