The state of the nation is weak

The state of the nation is weak. That so much is true if we look more deeply into the key economic and social indicators that are used to measure national progress and development.

This is to say that what really matters most is not what we do such as the projects started and completed as usually reported by the government; what matters most is the result of what we are doing in terms of the changes that our efforts bring to the life of our people. In fact, not all projects can lead to improved life for our people, no matter how big or expensive they are, if they are misplaced, poorly identified and planned and badly implemented.

Right now, the Philippines ranks 12th in the world in population size but our gross domestic product (GDP) is only at 39th place based on World Bank data. When expressed in per capita basis, this even places the country further down at number 122. The reason for our low GDP and per capita income is clearly our low productivity. Low productivity, of course means low income and that explains the high incidence of poverty in the country which as of the first half of last year was estimated at over a fourth of our total population or 26 percent.

Poverty is also a product of inequity. In the last Family Income and Expenditure Survey conducted by the government in 2009, the bottom 30 percent of the Filipino families barely got 9 percent of the total income in the country while the upper 30 percent had 64 percent. The survey also showed that the bottom 10 percent of our people only had 1.9 percent of the income but the upper 10 percent had 35 percent. This means that in 2009, the richest 10 percent of our people had 18 times the income of the bottom 10 percent. So rich!

Among the regions, we also find that as of 2011, Metro Manila or the National Capital Region accounted for 37 percent of the GDP followed by Calabarzon with 10.5 percent and Central Luzon with 7.5. The rest, less than half or 45 percent of the GDP, were divided by the other 14 regions outside of the favored three regions in Luzon. Regional development, instead of becoming more balanced as envisioned by the government when the Regional Development Councils (RDCs) were put up in each of the regions in the country, had become more unbalanced instead. When most of the RDCs were operational in 1975, Metro Manila only had 31 percent of the GDP. Why did it grow to 37 percent? What are the RDCs doing?

Ditto with the Local Government Units (LGUs). Up to the 1980, LGUs had nothing much to do because they had no resources to do so. That changed in 1991 when the Local Government Code was passed. Since then, the LGUs as a whole have been getting up to 40 percent of the internal revenue collection of the national government. Now many LGUs have between 60 to 80 percent of their total resources coming from the national government. They are rich beyond compare than before 1991. What do they do with their money?

As intended in the Code, new resources are to be used for local development. Up to now, however, we still see many towns, cities and provinces struggling or remaining undeveloped or underdeveloped. When towns, cities and provinces are poor, the region is poor; when the regions are poor, the nation is also poor.

Again, what do the LGUs do with their money? One thing they do is hire hundreds or thousands of contract workers. But to be frank about it, what the contract workers get does not help much to improve their living conditions. They just become more dependent on the politicians. The better way might just be to give the worker money equal to one year’s pay to start a new livelihood project and to return the same amount when able in the future. In that way the worker becomes independent and the LGU becomes free of parasites.

Poverty deprives many of our people from getting enough food for their health or education for their children. When health and education are wanting, so is productivity. Low productivity in turn destines the poor to live in poverty for the rest of their lives. The cycle never ends; not unless something drastic is done to break the cycle. Through what? Before and after the last war many countries tried communism or an economic system that is completely controlled by the state. Before the last century ended, most of them learned the lessons. After many years of communism, they only found themselves more equal in poverty.

The solution, some say may lie in the market system or capitalism where individuals are free to accumulate capital and run their own business in competition with others for profit. But then that is easier said than done because for the market system to work, many things must be put in place first like good infrastructure, an education and health system that is accessible to the poor, peace and security, and honest and efficient government. The last is most important because, although government must shy away from business, they are nevertheless called upon by the business sector to provide the right business environment and rules of the game. The environment and rules of the game can be twisted to favor a few who have the means to influence the decisions and actions of the people in government.

In his last Sona, the President called for more transformation of the Filipinos as individuals like doing what is right in the case of some people he mentioned. The economy, however, needs transformation, too, from low paying jobs in agriculture and services to industries where the average pay is higher and from informal business, where access to capital is taboo, to formal business where most of the capital are directed.

There is tourism and business processing outsourcing but the first pays very little while the second is not accessible to the bulk of our workers who are not college graduates. We need a new strategy; I did not find it in the Sona.