Poor yet to feel fruits of GDP growth
The economy, as measured by the gross domestic product, expanded by 6.4 percent in the first three months this year, beating forecasts of private economists and extending the uninterrupted growth since the second quarter of 2021. This, according to Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda), means the economy is back on a high-growth path.
Finance Secretary Benjamin Diokno brags that this is much faster than those of neighboring economies such as China (4.5 percent), Indonesia (5 percent), Singapore (0.1 percent), and Vietnam (3.3 percent). Budget Secretary Amenah Pangandaman chimes in that with the first quarter turnout, the economic team now projects growth in the next three quarters of 2023 to be within the range of 6.6-7.5 percent.
The private sector is no doubt reaping the benefits of the economic expansion. The Zobel family’s Ayala group reports that net income from January to March this year climbed 31 percent to P10.2 billion, driven by profits generated by Bank of the Philippine Islands, Ayala Land Inc., ACEN, and Globe Telecom.
SM Investments’ first-quarter profit surged by 33 percent to P17.3 billion, coming mainly from SM Prime Holdings, BDO Unibank Inc., and SM supermarkets. San Miguel Brewery Inc., a unit of conglomerate San Miguel Corp., booked a net income of P6.8 billion, up more than 38 percent from the same period last year. The Ty family’s Metrobank saw its net profit rise by 31 percent to P10.5 billion, while Megaworld Corp. of tycoon Andrew Tan surpassed pre-pandemic levels for the first time with net income surging by 30 percent to P4.6 billion.
However, what’s regrettable about the ongoing growth story is that the fruits of eight straight quarters of economic growth have not trickled down much to the pockets of ordinary Filipinos, especially the millions of wage earners and households still living below the poverty line. Filipino workers and their families remain “barely surviving.”
The think tank Ibon Foundation points out that the current minimum wage is still not enough to meet even the Philippine Statistics Authority’s low poverty threshold of P12,030 a month per family, or P79 a day per family member, to provide basic food and nonfood needs. The independent research group estimates that the average monthly minimum wage in the country is only P8,902, short by P3,128 or 26 percent of the official poverty threshold. This minimum wage is also 63 percent less than what Ibon Foundation estimates as the average “family living wage” of P14,885 a month.
This lack of income is manifested in the results of a Social Weather Stations (SWS) survey released last May 7 showing that some 51 percent or 14 million Filipino families considered themselves poor in the first quarter of 2023. Although the percentage was unchanged from the level in December 2022, the SWS notes that the actual number increased from 12.9 million self-rated poor families at the end of last year.
SWS also says that among the families who considered themselves poor, 1.8 million were newly poor (which means they did not consider themselves poor one to four years ago), while another 1.8 million families said they were already poor five or more years ago. Add to this the plight of the 2.4 million Filipinos who remained jobless as of March, as well as the 5.44 million underemployed or those who needed more work hours or an additional job to make ends meet.
One of the solutions to answer this forcefully — a mandated wage hike — is already moving in Congress. The Senate committee on labor, employment, and human resources last week approved “in principle” a bill seeking to increase the minimum wage by P150 across the board for the entire country.
According to Senate President Juan Miguel Zubiri, who filed a legislated wage hike bill, the last legislated minimum wage increase was in 1989, at P89, before the passage of the Republic Act No. 6727 creating the regional wage boards.
“What we’ve seen is that the increases are very little, and it takes a long time before the wage boards act on the problems of rising cost of living and the clamor of labor for decent wages,” he laments.
Will the wage hike scare away foreign investments? The Senate president cites Southeast Asian minimum wage figures: P842 a day in Indonesia, P854 in Malaysia, and P2,486 in Singapore, adding that Vietnam has a lower minimum wage of P511 but has no deduction for both housing and health care.
To address fears of it stoking inflation, it is about time for the country’s tycoons to share their wealth with their workers since nearly all their businesses have recovered from the pandemic, and to not pass on to consumers any additional wage expenses through higher prices.
The economic team is aware of the problem of the poor not feeling the effects of economic growth. As Neda’s Balisacan admits, “There is much more work to do in order to realize the social and economic transformation agenda toward a prosperous, inclusive, and resilient Philippines.”
It is comforting to know that the administration is aware that it has to do better, especially in job creation and poverty alleviation. The question is what measures it will undertake, how fast can it do these, and if big business will be willing to help.
