Making growth work for the poor
And now for some good news: according to the World Bank, Philippine poverty incidence has gone down from 26.6 percent in 2006 to 21.6 percent in 2015, thanks to robust economic growth. That five percent drop, however, still means 22 million Filipinos – about a fifth of the entire population – living below the poverty line, even with the government’s WB-backed conditional cash transfer or Pantawid Pamilyang Pilipino Program.
With strong economic growth, the WB stressed in its poverty assessment report, the Philippines is in a good position to break the cycle of uneven opportunities that trap people in poverty. Robust growth should also pave the way for greater job creation and improved delivery of basic services, according to the report.
The challenge has always been making growth work for the poor – as stressed by the title itself of the WB report released late last month. Natural disasters as well as armed conflict in several areas aggravate poverty and complicate job creation. Education offers the best hope for lifting people from poverty, but the country’s investments in human resources are not enough. With rapid advances in technology, Filipinos need constant skills upgrading.
In recent years, business process outsourcing has created more jobs outside agriculture. But there are other areas that can still be developed to promote inclusive growth, among them tourism and the creative industries. Manufacturing can be revived and boosted. Agriculture itself has a wide room for expansion in terms of increasing production and shifting to higher value crops. Various types of agribusinesses can create meaningful livelihood opportunities in underdeveloped areas particularly in Mindanao.
Peace initiatives with Islamic separatists and communist rebels open opportunities for greater development efforts in the conflict areas of Mindanao. It is no coincidence that those conflict areas are also the most impoverished in the country. As the WB report noted, the country is currently in a good position to make a dent against poverty. The country must seize this opportunity and make growth work for the impoverished.