MV Pangilinan: Allow private sector to actively help end poverty

A top businessman on Wednesday called on Malacañang to include the private sector in mapping out fresh antipoverty programs as lawmakers blamed income inequality for chronic poverty amid robust economic growth.

Manuel V. Pangilinan, chairman of the Philippine Long Distance Telephone Co., said the government should allow the private sector to take an active role in ensuring that economic growth was shared and enjoyed by all classes.

“The imperative is inclusive, not exclusionary, growth. Business and government need to work together to identify areas that offer the higher levels of employment and income to our people—agriculture and tourism, for instance,” Pangilinan said.

Work in progress

Malacañang said eradicating poverty in the country was “not an overnight thing.”

President Aquino’s spokesman, Edwin Lacierda, largely blamed the high level of poverty incidence on the lackluster performance of the agricultural-fishery sector.

“But again, this (defeating poverty) is not overnight. This is a work in progress and hence, for that reason, we also need support from both houses of Congress,” Lacierda said.

He also said the NCSB report was already dated. “These are all historical data. So the survey … the press conference on the poverty incidence was (based) on the first semester of 2012,” he said, but added:

“We have already identified the areas where we need to improve on: in the agricultural sector.”

Pangilinan added that government should provide the guidance, encouragement and rewards. “Business should mobilize the resources for development. The franchise to inclusive growth is not the exclusive province of either business or government—neither can accomplish it alone,” he said in a text message.

Pangilinan was reacting to the report of the National Statistical Coordination Board (NSCB) on Tuesday that poverty incidence had remained unchanged since 2006 amid high economic growth. The NSCB said poverty incidence in the first semester of 2012 was 27.9 percent, “practically unchanged” from the same period in 2009 (28.6 percent) and in 2006 (28.8 percent).

Trickle down doesn’t work

“Even if we build all the infrastructure that we need, only the rich and educated will benefit the most because they will know how to use them properly and productively, unlike the poor and uneducated,” said Sen. Ralph Recto in a text message.

He said only the educated class or the entrepreneurs and professionals would benefit from economic growth, leading to income inequality and the rich getting richer and the poor poorer.

“Trickle down really does not work. High growth even leads to greater inequality even when it brings significant numbers out of poverty,” said Akbayan Rep. Walden Bello.

Recto said the government had the tools to break the paradox: Higher spending (specifically in education) and taxation.

Recto pointed out that expanding the middle class would also help in spreading the wealth across all classes. “We must allow for more private sector investments in infrastructure, factories and food production to create more jobs and build the middle class. Government does not create jobs. It is the private sector,” he said.

He said the country needed to grow at a faster rate of at least 10 percent for a long period of time to reduce poverty to less than 10 percent by 2020.

To spur agri growth

Both Bello and Recto said that the centerpiece antipoverty tool of the government, the conditional cash transfer program, had been helpful. Bello said the results would be felt in the medium to long term.

Lacierda said the challenge was to spur growth in agriculture to create more jobs, increase production and ensure that the production translates to a greater income for farmers since the bulk of the population was still in the agricultural sector.

Looking at the bright side, Lacierda noted that private investments had increased, and that public infrastructure spending in 2012 was around P250 billion.

Reacting to the NSCB data, Norio Usui, senior country economist for the Asian Development Bank, said on Wednesday that the government must solve the problem of jobless growth if it hoped to reduce poverty.