How poor are the Filipinos? What is the degree of inequity in Philippine society?
In 2008, Philippine news media carried reports on the extent of the poverty of Philippine society.
As this juncture, I wish to recall the statistics because, as we all know, poverty is directly related to the dispensation of justice and the rule of law in any society.
The fast-growing population and the failure of household incomes to rise as fast as commodity prices have resulted in more poor Filipino families, according to the 2006 Official Poverty Statistics report released by the National Statistical Coordination Board (NSCB).
The report said 4.7 million families -- equivalent to 26.9 percent of the total number of Filipino families -- were poor in 2006, marking an increase from 4 million poor families in 2003.
It also said poverty incidence -- the proportion of those considered poor to the total number of families -- was at 26.9 percent in 2006, compared to 24.4 percent three years earlier.
Next week (July 27, 2009), Pres. Gloria Arroyo will deliver her state of the nation address. As usual, she will glorify herself and her administration.
But do not be misled. Let the statistics guide you.
Poverty incidence rose despite the average economic growth of 5.4 percent that the Philippines posted from 2004 to 2006. From the statistics, it may be concluded that the benefits of a growing economy are not trickling down to the poor.
The NSCB said that in 2006, the average poverty line for a family of five was determined to be at P6,274 a month. This meant that a family of five earning less than that amount was considered poor.
It also said a family of five could live on the minimum wage of P9,100 a month in 2006 without being poor.
The poverty threshold rose from P5,129 in 2003 because of inflation, or the increase in consumer prices.
In 2006, as many as 1.9 million families -- from 1.7 million in 2003 -- were considered “food-poor,” or those whose incomes fell below the minimum requirement for food expenditure set by the government, the NSCB said.
The food poverty incidence worsened from 10.2 percent of the total number of families in 2003 to 11 percent.
On an individual basis, 32.9 percent of the population, or 27.6 million Filipinos, were poor in 2006, the NSCB said. The figures showed deterioration from the 30 percent and 23.8 million, respectively, recorded in 2003.
There were 12.2 million Filipinos -- equivalent to 14.6 percent of the population -- who were food poor in 2006, showing deterioration from 10.8 million and 13.5 percent, respectively, in 2003.
Tawi-tawi, the southernmost province with 8 out of 10 families considered poor, was the poorest province in 2006. No wonder why our Muslim brothers in the south continue to rebel up to this time.
The year 2006 was the year when the government increased the rate of the value-added tax from 10 to 12 percent in compliance with the Reformed Value-Added Tax Law of 2005, which also expanded the coverage of the tax to include electricity and oil starting in November 2005.
The higher prices of commodities were the undesirable result of the government’s need to improve its revenue collection.
Showing an entirely different statistical picture, the office of Pres. Arroyo alleged that poverty incidence actually fell during the Arroyo administration. It claimed that poverty incidence dropped by 4.8 percentage points between 2000 and 2006, or from 27.2 percent to 22.4 percent of families for the six-year period. It alleged that poverty incidence would fall in the family income and expenditure survey in 2009, with primary spending in the national budget for antipoverty projects and programs up by P281 billion in 2006-2008, or a fivefold increase in budgetary allocations since the period 2003-2005 (assuming that such amount is not stolen by crooks in the Arroyo government).
The dream of Pres. Arroyo (which remains an impossible dream) is to reduce poverty incidence of between 17 and 20 percent by 2010, assuming the government would continue its policy of increasing spending for social services.
In January, the private polling firm Social Weather Stations released survey results showing that self-rated poverty had gone down to 46 percent from 52 percent in the fourth quarter of 2007. SWS data showed that the last time self-rated poverty went below 50 percent under the Arroyo administration was in June 2007 at 47 percent, down from 49 percent in August 2005.
The leftist Ibon Foundation presented an entirely different picture. It reported that in the Philippines, not only was poverty increasing, so were income inequalities. As the old line goes, the rich are getting richer while the poor are sinking deeper into poverty-- and this has proved especially true under the Arroyo administration.
Based on various years of the Family Income and Expenditure Survey (FIES), income distribution is skewed and has worsened since 1985. Over the period, the share of the poorest 60% of families in the national income decreased by 1.8 percentage points while the top 20% were able to increase their share by 1.2 percentage points.
According to the 2003 FIES, the richest 20% of the population accounted for 53% of total national income while the bottom 20% got only 4.63 percent. The income of the richest 10% of households was 21 times that of the poorest 10 percent.
Income inequality was primarily due to the differences in the ownership and control of the country’s resources within the regions, provinces, urban or rural areas, and economic activities. In short, inequality was still the result of a few foreign and local elite monopolizing the country’s resources and employing the rest of the people, as shown by examining the country’s agriculture and industry sectors.
Agriculture was still the country’s major economic activity, directly and indirectly accounting for around three-fourths of the gross domestic product (GDP) and 40% of transactions in the market while employing 70% of the labor force. Yet the majority of the country’s poor still live in the countryside, precisely because land remains concentrated in the hands of a relatively few land-owing families.
Based on the latest census of agriculture, less than one-third of total landowners still own more than 80% of the country’s agricultural land. Fifty two percent of the farms in the country covering 51% of total farm area remain under tenancy, lease, and other forms of tenurial arrangements. The average farm size is two hectares– subsistence and household level– while 49% of the farms still use primitive
technology such as plows and carabaos. Forty-two percent of these farms are not even owned by the farmers.
The dominant families in the country are the land-owning ones whose interests also extend to trade, banking and finance, real estate, as well as manufacturing. The country’s regions can virtually be subdivided into fiefdoms according to the ownership of lands by these families, who include Danding Cojuangco who owns 19,000 hectares all over the archipelago; the Roxases with 8,500 hectares in Batangas; the Cojuangcos (of Cory Aquino) who own the 6,000-hectare Hacienda Luisita in Tarlac; and others such as the Floirendos of Southern Mindanao, Dys of Northern Luzon and the Zubiris of Bukidnon, the Ibon Foundation said.
To defend their land monopoly they have also stuffed the legislature with representatives from within their own clans. According to a study by the Philippine Center for Investigative Journalism, some 60% of the membership of the 12th Congress (2001-2004) came from the land-owning families or represent their interests in legislation.
On the other hand, foreign and local capitalists dominate local industry and services. Transnational corporations (TNCs) are concentrated to a large extent in manufacturing, followed by wholesale and retail trade and financial intermediation. In manufacturing, TNCs account for the bulk of the revenues derived by the top 1,000 corporations.
The largest TNCs operating in the country include the likes of Texas Instruments, Royal Dutch Shell, Toshiba, Chevron-Texaco, Nestlé, Fujitsu, Philips, Zuellig and Panasonic. By nationality, over half of the TNC revenues are accounted for by Japan (29.4%) and the US (23.8%), distantly followed by the Netherlands (7.3%), Great Britain (6.8%), Switzerland (3.5%) and Germany (1.6%).
The largest transnational banks (TNBs) operating in the country are Citibank, Hong Kong and Shanghai Banking Corporation (HSBC), Standard Chartered and Deutsche Bank, and ING Bank, with the top five TNBs net income reaching P5.5 billion in 2004.
Local family conglomerates are owned and controlled by the country’s biggest landlords and businessmen. The top ten conglomerates in 2004 were those owned by the Cojuangcos (San Miguel Corporation); Gokongweis (JG Summit); Ayalas (Ayala Corporation); Henry Sy (SM Investments); Lopezes (Benpres Holdings); George Go and family (Equitable PCI, which has lately merged with Banco de Oro owned by the Sy family); Concepcions (RFM Corporation); Villars (Filinvest); Pangilinans (Metro Pacific); and Andres Soriano and family (A. Soriano Corporation). Their revenues in 2004 totaled P334 billion.
The Arroyo camp predicted in 2006 that per capita income or the share of every Filipino in the country’s wealth as measured by the gross domestic product (GDP) would hit $1,400 (approximately P71,834). But even government economic planners had to admit that the national wealth was not shared equally.
In fact, if the shares to total income defined in the 2003 FIES were used to allocate the 2006 GDP, the poorest 10% would have a per capita annual income of just P2,781 while the richest 10% would have a per capita income of P56,695 (based on an average family size of five).
This inequality is further reflected in the huge gap between the wealth of the country’s richest individuals and families and the poorest Filipinos. The US$12.4 billion net worth as of 2006 of the country’s 10 richest is equivalent to the combined annual income of the poorest 9.8 million households (i.e. P625 billion in 2003).
Hence, according to Ibon Foundation, more than ever, economic growth under Arroyo continues to measure the growing profits and wealth of a few rather than the welfare of the many. But in the context of a Philippine economic system that favors the rich and powerful, it should not be surprising that while poverty increases in the country, so does inequality.
See:
http://archive.inquirer.net/view.php?db=1&story_id=123058
See:
http://info.ibon.org/index.php?option=com_content&task=view&id=132&Itemid=50
