Poverty in the Philippines « synopsis - my own point of view - a blog about public administration

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ome Post Item Poverty in the Philippines

Poverty in the Philippines

May 16, 2009

n studying economic development, I have always been aware of the gap that exists betweenheory and practice. Way back in my grad student days, Big Theory was the rule, Indeed, Iuppose I was somewhat unusual in that I made the transition from the theoretical disciplines ofolitical science and economics to the practical level of hands-on development work.

have recently revisited the development literature, both for personal reasons and out ofrofessional necessity in my current consulting work at the Asian Development Bank (ADB). And I

must say that I am impressed by the breadth and logic of current development philosophies.

ets take a quick look at some widely accepted principles in the mainstream developmentommunity, at the three descending levels of the world as a whole, Asia as a region, and the

Philippines specifically. All three share in common placing poverty reduction at the core ofevelopment work.

Global Level: In September, 2000 the UN General Assembly ended the Millennium Summit bydopting a set of Millennium Development Goals (MDGs). In addition to the first MDG ofradicating extreme poverty and hunger, the others include achieving universal primary education,romoting gender equality, reducing child mortality, improving womens reproductive health,ombating HIV/AIDS, malaria, and other diseases, ensuring environment sustainability, anddeveloping a global partnership for development.

With specific reference to poverty, the MDGs specify three targets:

Target 1: Halve the proportion ofpeople living in extreme poverty between 1990-2115Target 2: Halve the proportion of population below minimum level of dietary energy

consumption and halve the proportion of underweight children (under five years)Target 3: Halve the proportion of people without access to safe drinking water or those whocannot afford it by 2115.

Asian Level: ADBs Poverty Reduction Strategy, as embedded in its Long-Term Strategicramework, is equally admirable. ADB identifies three fundamental pillars of poverty reduction:

Social Development (human capital development, population policy, social capitaldevelopment, gender equality, social protection);Good Governance (government accountability, public participation, predictable legalframework, transparency, anticorruption initiatives); andPro-poor Growth (labor-intensive employment and income creation, public/private sector

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provision of basic services, poor area public investment. regional and subregionalcooperation, environmental sustainability)

Philippines Level: The Arroyo administrations official development agenda focuses specifically onssues of poverty and unemployment. The key document here is the Medium-Term PhilippineDevelopment Plan (MTPDP), 2001-2004, which stresses poverty reduction through equitable

rowth, rural development, and social sector investment. The four primary strategies are:

Macroeconomic stability and equitable growth, using sound fiscal and monetary policies tokeep inflation low and avoid surges in unemployment; modernize all sectors through HRdevelopment and technology;

Comprehensive HR development, basic education, health, shelter, water, electricity; safetynets for most vulnerable sectors; encouraging poor to participate in governance;Modernization of agricultural sector with social equity; agrarian reform, improving ruralinfrastructure, implementing land reform;Effective governance through transparency, reducing graft and corruption, strengtheningpartnerships with civil society and the private sector.

Poverty is conceptualized broadly, taking into account not only income but its impact in terms ofuman deprivation, development, and quality of life.

he Sad Statistics

During the 1990s, the Philippines made significant progress in fighting poverty. According to theFamily Income and Expenditure Survey of 1997, poverty incidence fell from 49.3% of total

opulation in 1985 to 40.6% in 1994 and 36.8% in 1997.

According to an ADB study conducted by Ernie Pernia and Arsenio Balisacan, however, the declinen poverty rates did nothing to improve the countrys notoriously inequitable income distribution.Despite the more-or-less sustained economic growth from 1985 to 1997, the poorest 20% of the

opulation only improved their income 0.5% for every 1% growth in average income. In otherwords, they slipped further behind and income inequality became even more extreme.

he absolute gains were attributable to rapid economic growth during the Ramos administration,ncreased foreign investment, relative political stability, and decent public sector revenuesssociated with the privatizations introduced as part of the FVR reform agenda.

Although the Philippines escaped the Asian financial crisis in better shape than many of itseighbors, the crisis did have a significant impact, an impact exacerbated by the damage done tohe agricultural sector by the El Nio phenomenon during 1997-98. Both urban and rural sectors

were hard hit by rising prices and a weakened labor market, causing poverty to begin edging up

gain. These factors contributed to a major increase in the number of Filipinos earning less than276 a year (considered the minimum required to meet basic living requirements here), from 27million in 1997 to 31 million in 2000 (39.4% of the population)

Enough statistics! Lets turn to a brief discussion of two practical areas that illustrate what werealking about.

Practical Illustration #1: Malnutrition and Hunger

have been acutely aware of the relationship between poverty and hunger since my first trip heren 1982. As a statistical programmer cum development economist on a USAID-funded projectased at Cornell, I came to Manila to analyze data from a national nutrition survey. The survey,onducted by the National Nutrition Council (NNC), provided the basis for targeting food andutrition services designed for mothers and children in the most impoverished parts of therchipelago.

Although the work I did was both technologically primitive and abstract - tabulations painstakinglyxtracted from a Fujitsu computer using an ancient Fortran compiler and hand-drawn maps withtick-pins and annotations showing malnutrition prevalence rates - it was also a real eye-opener for

me. While I had studied political and economic development at a theoretical level for years, thosendeavors had been intellectualized and idealistic. In the process of analyzing that real worldutrition data, I came to appreciate the existential reality that underdevelopment and poverty are

more than concepts in a book - they are directly related to starvation, illness, and humanegradation.

hus, I found it sad that when I returned here in 1998, the situation, while somewhat improved,

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was still not that good. When I again analyzed data on a nutrition study, this time for UNICEF, theumbers were still appalling. Still just numbers spit out by a computer, but still numbers reflectingeal human suffering.

On a Philippine Nutrition Country Profile with funding from the Food and Agriculture Organizationf the United Nations. Findings showed that, just like 20 years ago, the biggest problems arerotein-energy malnutrition (PEM) and micronutrient deficiencies. Paralleling the general trend inoverty statistics, there was a decline in the prevalence of malnutrition during mid-1990s, followedy gradual increases beginning in 1998. There are now approximately 4 million (32%) preschoolhildren who are underweight-for-age, 3 million (20%) adolescents who are underweight-for-age,

nd 5 million (13.2%) adults who are chronically energy deficient. Vitamin A deficiency is a seriousroblem, with 7% of pregnant women and 8% of infants under six months being severely deficient.ron deficiency anemia affects 57% of infants, 51% of pregnant women, and 46% of lactating

women.

he primary cause of malnutrition is the inequitable distribution of food, which is related of courseo poverty. The typical Filipino diet is grossly inadequate for energy and other nutrients, causinguman bodies to compensate for inadequate energy intake by utilizing protein as an energyource; the usual result is PEM. This situation is unlikely to improve as long as an estimated 28

million Filipinos are unable to buy food to meet basic nutritional requirements.

Practical Illustration #2: Failed Land Reform

Poverty in the Philippines is most acute and widespread in rural areas. Although Manila certainlyas its share of urban poor, the National Capital Region has the lowest poverty incidence in the

ountry. Nationwide, one can compare the 1997 poverty incidence rates of 21.5% in urban areas tohe 50.7% rate in rural areas. The rural poor tend to be self-employed, primarily in agriculture orasual labor. They are almost all landless.

he state of landlessness is, of course, nothing new. The Spanish bequeathed to the Americanscolony with an extreme concentration of wealth and land, with the Spanish elites and religious

rders controlling vast estates. The Americans themselves assumed title to approximately two-hirds of all arable land in the Philippines.

he American colonial administration saw land reform as crucial for political stability and economicevelopment given the extreme poverty and unequal land distribution. The Americans were notccustomed to the colonial role, and always had a difficult time juggling their own democraticraditions with the realities of administering a colony halfway around the world. The dilemma in thisase was how to uphold property rights (meaning the commercial interests of large landholder)

while creating a more equitable system that would raise the standard of living of the large numbersf rural poor.

he Americans, as they did in so many other areas, relied on their own idiosyncratic historicalxperience. They opted for public land grants on the homestead model (i.e., the model used inettling Oklahoma and other areas of the American West), theoretically empowering poor peasantso become independent small-scale farmers. This was institutionalized when the American

Congress passed the Public Land Act (1902), the Friar Lands Act (1903), and the Rice Shareenancy Act (1933). Each of these laws provided for land entitlements and extended the possibilityf landless tenants gaining title to land.

However, in practice, American colonial efforts at land reform strongly favored the landowners, theducated, and the wealthy. Procedures such as land surveying, notice requirements, andxcessive legal costs ensured that potential peasant benefactors did not gain access to land.ndeed, landholders took advantage of bureaucratic and costly procedures to not only retain their

oldings but to significantly increase the size of their plantations.

Since independence in 1946, the Philippines has had four land reform programs (under PresidentsMagsaysay (1955), the first Macapagal (1963), Marcos (1972), and Aquino (1987)). The latter,nown as the Comprehensive Agrarian Reform Program (CARP), was by far the most ambitious.

President Aquino made CARP the centerpiece for her economic development policies, capitalizingn the fact that the EDSA Constitution made owning land a constitutional right of Filipino farmers.

However, implementation problems existed from the beginning, exacerbated by corrupt andncompetent management. Among the problems with CARP have been:

more of my knowledge bystudying to be more equipt anto be more efficient in servicmy fellowmen.

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An extended land valuation processFew and excessively vague guidelines for landowner compensationExtended landowner-tenant negotiationsLack of bureaucratic coordinationInconsistent implementation

oday, CARP is still alive and kicking under the auspices of the Department of Agrarian Reform.Erap made a big deal out of handing out land titles to peasants during photo ops, and PresidentArroyo is now doing the same. However, the bottom line is that land reform has never been

ffectively implemented in the Philippines. In fact, a good case can be made that efforts at landeform over the last 15 years have served only to perpetuate the cycle of rural unrest, poverty, and

conomic stagnation.

Realities

Poverty remains the central development issue in the Philippines and, despite the ambitiousevelopment goals laid out in the MTPDP, the country has not been able to sustain the economicrowth required to reduce poverty to acceptable levels.

While I offer no solutions, I would make a few closing observations.

irst, there is a fundamental disconnect between Filipino lites and the poor. The politicaleadership in the Philippines has always been drawn from those lites, and those politicians haveraditionally played the role of patrons and benefactors, relying on the pork barrel andersonal/family funds (often acquired through corruption) to essentially buy votes. The corerinciple of democracy - that representatives should be drawn from those they represent and

dvocate for the true interests of their constituents - has not been operative.

Philippine Presidents in particular have been drawn from the ranks of the wealthy and privileged.How can they relate to what it means to be poor or hungry? Even if their hearts in the right placewhich is not all that common), well-photographed visits to squatter settlements are not the answer.

Second, the Philippines system is exceedingly politicized. President Arroyo herself is alreadyocused on the 2004 presidential elections. In a sense, you cant blame GMA. Her predecessor,

Erap, had a built-in constituency among the masa. But President Arroyo must create such a base,iven that she is the daughter of a previous President and has virtually nothing in common with theoor people of her country. She has worked hard to develop support among the common folk,ressed in jeans with regularity, and sung on stage with popular recording artists.

She has also latched onto fighting poverty as a key policy emphasis. In her State-of-the-Nation

SONA) address on July 22nd, she emphasized the so-called rolling stores - trucks loaded withubsidized rice, rice, sugar, and canned meat that ply the streets of Manila - as a sterling examplef her administrations anti-poverty programs. The only problem was that her remarks hadnowledgeable economists practically rolling in the aisles, given that few poor people ever getccess to the trucks and only 5% of the nations poor live in Metro Manila. But real povertylleviation programs where they are most needed - say in rural Mindanao - would lack the publicitypportunities of the rolling stores on Manila streets.

rue anti-poverty programs take a long time to bear fruit, and the politically-driven nature ofPhilippine government sector programs almost ensures that the emphasis will continue to be on

uick fixes or interventions that provide high visibility and political payoffs.

his is unfortunate given the seriousness of the situation and the implications for the country ifoncerted action is not taken.

Poverty and malnutrition are already at alarming levels in this country, and the countrys too-rapidopulation growth is magnifying the strain on limited budgetary resources. The rapidly growingopulation is jeopardizing the quality of basic social services, contributing to the ongoing decline inuality of basic education, and limiting access to health care (especially primary health care,eproductive health/family planning, immunization, and feeding programs).

Achieving any significant reduction in poverty will require rapid economic growth, growth of amagnitude not seen in recent years. Further, addressing issues of inequality will require significantnvestments in human capital, especially in improving the quantity and quality of primary education.

Most importantly, implementing effective anti-poverty programs based on the quite valid model laid

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ut in the MTPDP will require strong political leadership and a previously unobserved commitmento truly representing the interests of the poor. Whether such leadership will be forthcoming is, Iuppose, the $1,000,000.00 question.

roy dante ogurida

ags: economic developmentFailed Land ReformMalnutrition and HungerMTPDPphilippinehilippinesplacing poverty reductionPoverty in the Philippinessynopsis

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Previous Comments

how About the poverty level

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lol on Arroyo, im not a fan of politicians myself but well aware that all i see are photo shoots of

her visits in the squaters never really seemed to make a change, i like it :3

anyway thanks for this one.. some of these facts might help me for my research, thanks a lot ^^

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