Palace: There’s growth in all income groups

Although poverty is still widespread, the gap between the rich and poor in the country has not widened, Malacañang on Wednesday said, contrary to a report by the National Statistical Coordination Board (NSCB).

“I’m not sure if that’s correct. There has been growth even in the lowest levels,” presidential spokesperson Edwin Lacierda said at a briefing, disputing the conclusion of an NSCB study culled from official statistics.

Lacierda pointed to the continued increase in the income levels of Filipinos belonging to the middle class.

“For instance, there’s a growth (in income) of 8 percent in the lowest level; 4.3 percent in the middle income; and, from the high (income individuals), it is about 10 (percent). All those growths, if you notice, are above inflation rates. Inflation is 3.2 (percent). There’s real growth even in the low level,” he said.

A paper, written by NSCB Secretary General Jose Ramon Albert, detailed the country’s national income accounts that supported the perception that the benefits of the robust economy were enjoyed more by the rich than the poor.

The paper confirmed what was obvious to the public: The gap between the country’s rich and poor is widening, with high-earning individuals enjoying significantly faster growth in incomes compared with people from the middle- and low-income classes.

Second time

This was the second time that the Aquino administration questioned official data from the NSCB, which is attached to the National Economic and Development Authority.

In April this year, President Aquino himself doubted the veracity of poverty statistics released by the NSCB that indicated that economic growth had hardly made a dent in poverty incidence in the country.

The NSCB reported that the poverty incidence stood at 27.9 percent in the first semester of 2012—a level that was “practically unchanged” from the same period in 2009 (28.6 percent) and 2006 (28.8 percent).

“I have my doubts,” the President then told reporters while he was in Brunei for a regional summit, asking whether wrong population data was used by the NSCB.

Expanding inequality

With the incomes of the rich growing faster, income inequality is expanding as a consequence.

Albert said that people from the high-income class, which account for between 15.1 and 15.9 percent of the country’s population, enjoyed a 10.4-percent annual growth in income in 2011.

The study used data covering 2010 and 2011.

In contrast, incomes of people in the middle-income segment grew by only 4.3 percent, and incomes of those in the low-income group by 8.2 percent.

Albert said the NSCB found that those from the high-income class had incomes rising much faster than those in the middle- and low-income class.

Address disparities

“While such an examination of income is rather simplistic, it points to issues about income inequality, and the need for government and society to address these disparities, and ensure a path toward inclusive growth,” he added.

Albert defined high-income individuals as those who belong to households that earn more than 10 times the poverty line (more than P78,200 a month or at least P940,000 a year.) The NSCB placed the poverty line for a family of five at P7,821 a month in the first semester of 2012.

Middle-income households are those that earn from twice to 10 times the poverty line. Low-income households earn twice the poverty line or less.

‘Rising tide lifts all boats’

Lacierda said the Aquino administration was pursuing its “inclusive growth” policy.

“We are addressing inclusive growth. It is a challenge for us. From the very start of our administration, we have said that we are going to bat for inclusive growth and it’s not going to happen overnight. So, we are continuously doing and making sure that no one would be left behind,” he said.

Asked if generating new jobs was the focus of the administration in addressing low incomes of most families, Lacierda said job creation was just “part of it.”

Asked about tax breaks for the middle class that regularly pay their taxes, he said: “What we are doing is making sure that we create jobs not only for the unskilled laborers. For instance, BPO (business process outsourcing) is for the middle level (income individuals). Also, (government is providing) financing for those who would wish to go into entrepreneurship.”

Conducive to investment

Thus, Lacierda said, the government was focusing more on job generation and making the Philippine business environment “conducive for more foreign investments, and we believe that we’re on that track.”

“We are on the right track. In fact, Secretary (Arsenio) Balisacan has mentioned that we are now in a new growth trajectory. So all these we are doing right now and, again, let me just emphasize that inclusive growth is not going to happen overnight,” Lacierda said. Balisacan is the socioeconomic planning secretary.

Lacierda said, “We are making sure that no one should be left behind. We are trying to make sure that everyone will (benefit). Like I said, a rising tide lifts all boats—that’s our plan.”