In­clu­sive growth course a tor­tu­ous road for poor

Business Mirror - - FRONT PAGE - By Cai U. Or­di­nario & Mary Grace C. Padin @cuo_bm @_en­ren

THE Philip­pines’s re­cent eco­nomic per­for­mance has paved the way for many economists to be­lieve the coun­try is no longer the “Sick man of Asia.” The strong per­for­mance of the econ­omy un­der the Ar­royo and Aquino ad­min­is­tra­tions led to im­prove­ments in its com­pet­i­tive­ness rank­ings and the recog­ni­tion that the coun­try’s credit rat­ing was, in­deed, in­vest­ment grade.

How­ever, over 10 mil­lion Filipinos are still un­em­ployed and un­der­em­ployed. Un­der­em­ployed Filipinos are those who are look­ing for ad­di­tional sources of in­come or bet­ter work­ing con­di­tions.

Neg­a­tive re­la­tion­ship

DATA from the Philip­pine Sta­tis­tics Author­ity (PSA) in Jan­uary 2016 showed there were 10.348 mil­lion Filipinos who are ei­ther job­less or look­ing for de­cent em­ploy­ment. This is com­posed of 7.879 mil­lion un­der­em­ployed and around 2.469 mil­lion un­em­ployed.

The re­cent data was not sur­pris­ing given the growth of em­ploy­ment gen­er­a­tion na­tion­wide in the past 33 years. Ate­neo Cen­ter for Eco­nomic Re­search and Devel­op­ment ( ACERD) Di­rec­tor Leonardo A. Lan­zona Jr. said the coun­try’s em­ploy­ment gen­er­a­tion re­mained slow.

Lan­zona said that, between 1978 and 2011, the em­ploy­ment rate na­tion­wide only av­er­aged 2.77 per­cent, or 640,000 jobs an­nu­ally.

He noted that, with­out de­cent jobs, mil­lions re­main poor. Poverty is greater among fish­er­men, where poverty in­ci­dence in 2012 is at 39.2 per­cent and 38.3 per­cent among farm­ers.

What ex­ac­er­bates the prob­lems con­fronting farm­ers and fish­er­men is their ap­par­ent in­abil­ity to cope with cli­mate change. Data from the PSA showed that farm out­put de­clined by 0.96 per­cent in the last quar­ter of 2015 and by 4.53 per­cent in the first quar­ter of 2016.

In a re­port, the PSA said the steep de­cline in crop and fish­eries out­put in Jan­uary to March was due to the pro­longed dry spell and dam­ages caused by typhoons Lando and Nona.

Agri­cul­tural think tank Mega­nomics Spe­cial­ist In­ter­na­tional Inc. Pres­i­dent and CEO Pablito M. Vil­le­gas told the Busi­nessMir­ror the poor growth of the sec­tor re­flects “badly” on the Aquino ad­min­is­tra­tion’s an­tipoverty ef­forts.

“The Aquino ad­min­is­tra­tion al­lot­ted more than P250 bil­lion to the agri­cul­ture sec­tor for the past six years. But on the av­er­age, it has pro­duced only a growth rate of about 1.5 per­cent. That is dis­ap­point­ing,” Vil­le­gas said.

“That is not con­tribut­ing to in­clu­sive growth, be­cause the farm­ers are now even poorer,” he added.

Lan­zona also noted that poverty is greater among the em­ployed than the un­em­ployed. He said the poverty rate among the em­ployed was at 21.9 per­cent and among the un­em­ployed, 18.7 per­cent in 2012.

“[There is a] neg­a­tive re­la­tion­ship between un­em­ploy­ment rates and job gen­er­a­tion,” Lan­zona said in 2014. “The Philip­pines needs to gen­er­ate around 14.6 mil­lion jobs over the next four years.”

Lethar­gic growth

UNIVER­SITY of Asia and the Pa­cific School of Eco­nomics Dean Cid Terosa said mil­lions of Filipinos re­main un­em­ployed due to “de­fi­cient ed­u­ca­tion and health ser­vices.”

The Aquino ad­min­is­tra­tion, how­ever, gave spe­cial at­ten­tion to so­cial ser­vices. The out­go­ing ad­min­is­tra­tion dou­bled its spend­ing for so­cial ser­vices. How­ever, the gov­ern­ment has been crit­i­cized for un­der­spend­ing. Terosa said bet­ter ed­u­ca­tion and health ser­vices will im­prove the chances of the poor to in­crease the mar­ket value of their la­bor.

“Although eco­nomic growth has been sus­tained for sev­eral years, growth of so­cial wel­fare has been slowed by the lethar­gic growth of in­come of those in the lower in­come classes. This can be traced to em­ploy­ment for the poor,” Terosa said.

Univer­sity of the Philip­pines (UP) School of Eco­nomics Prof. Ben­jamin E. Dio­kno said job gen­er­a­tion is also linked to pop­u­la­tion growth. On May 30 Dio­kno ac­cepted the of­fer to lead the Depart­ment of Bud­get and Man­age­ment (DBM) un­der the Duterte ad­min­is­tra­tion.

Dio­kno, who was also part of the UP School of Eco­nomics po­si­tion pa­per on re­pro­duc­tive health in 2008, said poor house­holds tend to have more chil­dren and this com­pounds the em­ploy­ment prob­lem and, con­se­quently, ex­ac­er­bates poverty.

Weak com­mit­ment

THE 2008 po­si­tion pa­per of the UP School of Eco­nomics stated that more chil­dren in house­holds tend to de­crease their in­vest­ment in ed­u­ca­tion and other ba­sic needs, which are key in get­ting de­cent em­ploy­ment and break­ing in­ter­gen­er­a­tional poverty.

The pa­per stated that us­ing the lat­est avail­able data at that time showed av­er­age an­nual spend­ing on ed­u­ca­tion per student de­cline to only P682 for a fam­ily with nine chil­dren, from P5,558 for a one- child fam­ily.

Av­er­age health spend­ing also dropped to P150 per child for fam­i­lies with nine or more chil­dren, from P1,700 for a one- child fam­ily, the pa­per, whose lead au­thor is in­com­ing Eco­nomic Planning Sec­re­tary Ernesto M. Per­nia, read.

As a re­sult, the economists said poverty in­ci­dence is less than 10 per­cent for a fam­ily with one child and 57 per­cent for a fam­ily with nine or more chil­dren.

“[One] rea­son is the weak gov­ern­ment com­mit­ment to fam­ily planning,” Dio­kno said. “A typ­i­cal poor house­hold would tend to have more chil­dren than a typ­i­cally rich house­hold.”

Debt ser­vic­ing

APART from these chal­lenges, job­less­ness and poverty per­sist in a high- growth econ­omy, be­cause eco­nomic and devel­op­ment poli­cies have only fa­vored the rich, mem­bers of non- gov­ern­men­tal or­ga­ni­za­tion Free­dom from Debt Coali­tion ( FDC) said.

The FDC said among these poli­cies is the gov­ern­ment’s ef­forts to pri­or­i­tize debt ser­vic­ing over so­cial spend­ing. This is de­spite the gov­ern­ment’s ex­pan­sion of its Con­di­tional Cash-Trans­fer (CCT) Pro­gram.

The FDC ex­plained that au­to­matic ap­pro­pri­a­tions for debt ser­vic­ing be­came a law un­der the term of Pres­i­dent Fer­di­nand E. Mar­cos. This meant that debt pay­ments have taken the first cut in the na­tional bud­get be­fore ap­pro­pri­a­tions are made for vi­tal so­cial ser­vices.

This, FDC said, pre­vented the gov­ern­ment from lift­ing mil­lions of Filipinos from poverty. FDC Pres­i­dent Ed Ta­dem said in­equal­ity in the coun­try in 2013 was the high­est in the Asean.

“Eco­nomic growth as mea­sured by the GDP has, in­deed, grown un­der Mr. Aquino,” Ta­dem said. “But this pales in com­par­i­son to con­tin­u­ing high poverty lev­els, job­less­ness and ris­ing in­come in­equal­ity, the P6.4-tril­lion pub­lic debt to be in­her­ited by the next ad­min­is­tra­tion and the bil­lions of pe­sos wasted in pay­ments for fraud­u­lent, waste­ful and ques­tion­able loans.”

NONIE REYES

IN this file photo, a home­less man sleeps on a pave­ment in Makati City. Be­side him is a poster of a con­do­minium build­ing that will be built at his tem­po­rary shel­ter.

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