Philippine poverty after five years on Aquino’s watch
WHEN President Benigno Aquino III officially kicked off his presidential campaign in 2010, his main slogan “Kung walang corrupt, walang mahirap (If there are no corrupt officials, there would be no poor people)” was unveiled.
While his earlier advertisements banked on his family’s legacy — his father, the late Ninoy Aquino Jr.’s fight against the dictator Ferdinand Marcos and, his mother, Corazon Aquino’s presidency, which was brought about by the success of People Power and the restoration of democracy — “Kung walang corrupt, walang mahirap” showcased his own promise of a reform-oriented government.
Before his mother’s death in 2009, the then Senator Aquino did not have plans to run for higher office. But the large turnout at the elder Aquino’s funeral catapulted him to the forefront of the presidential campaign.
More than the rhetoric of “Hindi ka nag-iisa (You are not alone)” and “Tuloy ang laban (The fight continues),” “Kung walang corrupt, walang mahirap” was a promise with a concrete result in mind.
It linked his family’s legacy to the gut issue of poverty and reached out to the masses (the target audience of his then rivals former Senator Manny Villar and former President and now Manila Mayor Joseph Estrada, who were also accused of being corrupt officials). But still, it appealed to the emotion and the centuries-old desire of Filipinos to rise, to live the life they deserve and be recognized for what they are truly capable of.
It had a simple argument: “Korapsyon any problema, kahirapan ang resulta (Corruption is the problem; it results in poverty),” to borrow from his 30-second television advertisement.
The slogan’s message is arguably potent and it helped seal Aquino’s win in 2010. It also won a Gold Standard Award for Political Communications from PublicAffairsAsia in 2011, besting the late Lee Kuan Yew of Singapore and British Prime Minister David Cameron, and remained the battle cry of the Aquino administration.
The game plan
But how exactly did Aquino plan to combat poverty?
In an April 2010 article of the Philippine Daily Inquirer, presidential aspirants were asked, “How will you address the country’s poverty problem? What policies and programs will you pursue to reduce the number of poor Filipinos? How will you ensure that the fruits of economic growth benefit not only the rich but also the poor? How will you address the scourge of hunger?”
Aquino’s answers were straight-to-the point. He said he would create “better high-paying jobs” and an environment where investors and businesses can thrive. He also cited education as a long-term solution and the need to prioritize health “through broader social health care.”
“One way to bring the fruits of economic growth to the poor is through conditional cash transfer (CCT), which should be insulated from politics by imposing conditions before releasing the money to deserving people,” he said. “Cash transfers and other measures can address hunger.”
“Through pump priming in the local community, we can ensure that the fruits of growth benefit not only the rich but also the poor,” he added.
He connected that to the need to give preferential treatment to local contractors who will then “be compelled to use local labor to ensure that their disposable income will be used within the community.”
He said he didn’t want to “leave the poor in minimum-wage jobs after we have raised their standard of education” so high school students should be given “rigorous vocational training to ensure that after they graduate, they have marketable skills.”
While Aquino’s campaign highlighted how corruption directly affected the welfare of the Filipinos, his proposed solutions focused on the economy.
During his inaugural speech, Aquino said the main task of his presidency was to strive to lift the country from poverty, through good governance.
In his 2011 State of the Nation Address (Sona) he said money saved from lower interest payments and better economic performance could be used to fund the 4Ps. Throughout his term, he has cited gains from good governance or economic growth that would have a positive effect in supporting poverty alleviation measures.
Conditional cash transfer
The CCT has been implemented in a number of developing countries, through the aid of international financial institutions. At one point, The Economist called it “the world’s favorite new anti-poverty device.”
It is described as a social protection program, which attempts to facilitate inclusive growth or the trickling down of growth by redistributing income to targeted poor families. A report funded by the United Nations said the CCT was devised because “poor and disadvantaged populations have benefited little from economic growth and improving services, undermining countries’ progress on nutrition, education and health-related goals in many countries.”
Through CCT programs, a number of poor families are given an allowance in exchange of the promise or conditionality that their children go to school and receive proper health care.
CCT was first introduced in the Philippines in 2008, under the administration of Pampanga Representative and former President Gloria Macapagal-Arroyo, who remains in hospital arrest and whose administration has often been criticized by Aquino.
It was launched as Ahon Pamilyang Pilipino with a budget of P1.2 billion in 2008. A year later, it was called Pantawid Pamilyang Pilipino Program (4Ps) and was expanded to cover more than 700,000 households with an allocation of P6.61 billion. Allocation for 4Ps rose to P10.93 billion in 2010 for one million families.
By 2011 the budget doubled to P22.6 billion, prompting even Arroyo to weigh in on the issue and oppose the “massive increase,” which she claimed was “ambitious and untimely.” She was among the lawmakers who signed a manifesto, calling for the realignment of CCT funds to schools and hospitals. Arroyo said that while the details “looked nice on paper,” implementation was not simple.
But the budget for the 4Ps, which has become the centerpiece poverty-alleviation program of the Aquino administration, continued to grow in 2012 (P39.45 billion), 2013 (44.26 billion) and 2014 (P62.61 billion). (See Table 1)
By 2015, the budget has ballooned to almost 52 times larger (at P62.32 billion) when it first started in 2008.
As in the case of previous years, eligible households were identified through a database called Listahanan, formerly called the National Household Targeting System for Poverty Reduction. Up to P1,400 is allotted for each family per month (P500-subsidy for families availing health care services and P300 for each child aged 6 to 14 years old attending 85 percent of their classes. Only three children up to 18 years old, per household are covered by the program).
Despite being hailed by multinational development agencies, groups have questioned the program, dismissing it as a mere cash dole-out.
Sonny Africa, executive director of think thank IBON Foundation said the 4Ps is “just a stop-gap dole-out measure that does not address the much more basic problem of an economy that is not creating enough jobs or livelihoods.”
But Communications Secretary Herminio Coloma Jr. said the administration’s “new paradigm has reversed the vicious cycle of poverty, unemployment and even worse poverty.”
“Instead of ‘trickle-down,’ the government has adopted a purposive and targeted approach that directly provides financial assistance. Such assistance is conditioned on continuous enrollment and completion of basic education,” he said, referring to the 4Ps.
He said the “virtuous cycle” was created through the completion of basic education and the teaching of technical and vocational skills “to enhance employment possibilities for the youth and heads of families.”
Among the achievements that Aquino has been most proud of is the expansion of the programs under the Technical Education and Skills Development Authority, an agency at the center of his administration’s efforts to address skills mismatch and the need to link graduates to employers.
He has also lauded the business process outsourcing sector, which now employs more than a million Filipinos.
He has partly attributed the decreasing rate of unemployment (6.6 percent in January 2015 from 7.5 percent a year ago) and underemployment (17.5 percent in 2015 from 19.5 percent in 2014) to the said programs.
However, Bobby Tuazon, director for policy studies of the Center for People Empowerment in Governance (CenPEG), belittled Aquino for “not [attacking] the problem of poverty from all sides – like instituting a genuine agrarian reform program designed to uplift the peasant majority from poverty, boosting manufacturing to create jobs for the unemployed laborers, reforming the salary system of government employees especially the under-salaried teachers, and so on.”
He claimed that the government has “no clear and achievable strategic programs” to address poverty.
“After nearly 7 years of implementation (including the time the CCT was implemented by Arroyo), the government has yet to show the impact results – if any – of this farcical and expensive program. Where did the taxpayers’ money go?” he said.
Africa gave a similar suggestion, saying there is a need to “drastically change the direction of the economy.”
“Much more jobs giving much higher incomes have to be created which can only come from developing domestic agriculture and building Filipino industry. The biggest reason for the country’s historic jobs crisis is persistent rural backwardness and the lack of Filipino manufacturing,” he said.
“The recipients of the cash grants will of course welcome the momentary income relief but these grants will eventually end. And even if their children are healthier and better educated, their general prospects of surmounting poverty will still be poor if the economy is still not generating enough jobs and livelihoods for every Filipino,” Africa added.
Despite the improved unemployment data from the National Statistics Office, Africa claimed that the number of poor and unemployed Filipinos continue to increase.
“The number of unemployed Filipinos has likely risen by at least 100,000, the number of underemployed Filipinos by at least a million, and the number of merely part-time workers by at least 1.5 million. IBON estimates 12.2 million unemployed and underemployed Philippines as of 2014 consisting of 4.3 million unemployed and 7.9 million underemployed. This is the most unemployed and underemployed Filipinos in the country’s history,” he said.
He said government figures have “underestimated” the statistics because of the supposed incomplete data from Eastern Visayas.
“There were already 563,000 unemployed and underemployed in Region VIII before Typhoon Yolanda hit and this can only have grown given still unresolved livelihood and infrastructure problems in the aftermath,” he explained.
Further, he said the regional minimum wage in different parts of the country remain “too low to give a decent life for a Filipino family of five or six members.”
“In the National Capital Region for instance, the minimum wage of P481 is less than half (44 percent) of the family living wage of P1,083 for a family of six. Yet, according to the government’s latest data for 2013, over seven out of ten (71 percent) worker receive either just the minimum wage (25 percent) with nearly half receiving less than the minimum wage (45 percent). These figures are rounded off,” he said.
Based on the Philippine Development Plan, the Aquino administration’s goal is to halve poverty incidence from 28.2 percent in 2008 to only 16 to 18 percent in 2016.
In his 2014 Sona, Aquino expressed pride in the declining incidence of poverty based on government data. It showed that from 27.9 percent in the first semester of 2012, poverty incident fell to 24.9 percent during the same period in 2013.
He said the three percentage point-difference was equivalent to 2.5 million Filipinos who are no longer considered poor.
For the first quarter of 2014, however, poverty incidence rose to 25.8 percent from 24.6 percent in the same period in 2013. The Philippine Statistics Authority attributed it to the effects of higher food prices and Super Typhoon “Yolanda,” which ravaged Eastern Visayas and nearby provinces (See Chart 1).
On the other hand, a recent World Bank report said if the country is able to sustain high growth and job creation, poverty incidence may fall sharply in the next two years.
However, self-rated poverty, according to Social Weather Stations (SWS) surveys, has been showing an upward trend (See Chart 2). While the percentage of Filipinos considering themselves poor has been fluctuating every quarter, yearly average has been increasing— from 48 percent in 2010 to 49 percent in 2011, 52 percent in 2012 and 2013 and 54 percent in 2014.
Pulse Asia, on the other hand, showed a decrease in the approval rating in the government’s efforts to reduce the poverty in the country. From only 20 percent approval rating in March 2010 (under Arroyo), it rose to 47 percent in October 2010 (under Aquino). It dipped to 32 percent in March 2012 but rose to 44 percent in November the same year. Since then, however, the numbers have declined and had reached 28 percent by March 2015 (See Chart 3).
Africa, on the other hand, said that while government data has improved because of its higher frequency, he considers it “too delayed, incomplete and underestimated.”
“The number of poor and unemployed Filipinos has actually continued to swell. Since the start of the Aquino administration the number of poor Filipinos has likely increased by some 2.5 million to reach 25.8 million poor in 2014, using the very low official poverty thresholds. This is despite Php178 billion being spent on the 4Ps CCT program over the period 2010-2014,” he said.
He cited IBON’s own national survey, which revealed that 67 percent of respondents (equivalent to 67 million Filipinos) consider themselves poor.
Tuazon said such surveys show the real situation on the ground.
“The people as respondents are always the best source of public information especially on the concrete conditions they are in. The surveys on poverty, hunger, and joblessness must be true,” he told INQUIRER.net.
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