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Managing poverty reduction

It doesn’t need managing, it needs eliminating. And there’s only one way to do that: Create well-paying jobs. The “well-paying” bit is overlooked in government, where even nonpaying jobs (on the farm for dad, particularly) are considered in the statistics. I rely better on Social Weather Stations (SWS), where I find the stats more believable. What I find unbelievable is that there are more without jobs now than there were four years ago, or 14 years ago. The percentages look better, but the mathematical base has grown as the population grows. People are jobs, not percentages. So we’re getting nowhere.

A worrying aspect of the Philippines’ development in recent decades is not only slow growth but also that inclusive growth hasn’t occurred as economic growth accelerates. The slow pace of poverty reduction and the persistently high level of economic inequality have not been addressed. Among the major East Asian economies, the Philippines has had the slowest rate of poverty reduction in the last three decades, and today has one of the highest incidence among its Asian neighbors. By the way, has anyone in government ever noticed that in almost every measure of comparison, the Philippines ranks last, or close to it, among its Asean friends? And this has gone on with only slight, if any, improvements.

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It’s that way because of the insufficient focus on including the poor and the unemployed. Oh, there’s much talk about it, but not the actions that would resolve it. The numbers confirm it. Using the same definition of unemployment (it was changed in 2005) which, for comparison, you must do, the official number of jobless Filipinos rose to an estimated 4.2 million from 3.5 million in 2000, which translates to some 700,000 more without work today. A more believable SWS says there are 12.1 million unemployed Filipinos as of end-2013, much higher than the 9.9 million without a job in November 2010.

The huge inequality that exists today—where 79 percent of the population belong to the low-income group, only 5 percent are in the high-income group, and the middle class is way too small (16 percent)—needs leveling. This can only be done through job creation; there is no other way. Yet the necessary high-level attention to achieving it isn’t there. I even wonder if the absolute importance of job creation over almost everything else is recognized.

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The various social programs such as the conditional cash transfers are good, but they’re interim solutions, emergency responses that can’t, and shouldn’t, be maintained. It’s jobs where the focus must be. And that means some politically unpalatable decisions must be made.

A crucial one is security of tenure. This is anything but security. It is a job inhibitor and creates job insecurity, as any Filipino hired for five months and then fired can tell you. If this law is repealed, there is real job security. A firm needs a worker and hires one; he does a poor job, he is warned, but he doesn’t improve. So the firm fires him, and hires someone else. No job is lost; there is only a change from an incompetent worker to a competent one. The fired employee works harder next time to keep his job, the hired employee works hard to keep his job. The firm grows through greater productivity. The employee gets all the mandated benefits denied to those that get fired before the six-month probation period is up. That’s proper job security. The Philippines becomes more competitive on the world stage, and that also leads to more jobs as people buy Philippine-made products.

I’d also rethink minimum wage. The P466/day is too low, but zero is lower. Our competitors in Asia pay lower wages and are getting much larger foreign direct investments, which are creating jobs. Minimum wage is certainly a reason, particularly in labor-intensive industries, the ones we need.

If you make job creation your No. 1 priority, everything else you must do follows. You make sure everyone is well-educated and healthy (that covers two of the major programs of the government). You make sure that infrastructure, reliable and reasonably priced power, and an efficient bureaucracy are in place so businessmen will invest (that’s three more), and so on. Also, with more decent-paying jobs here, Filipinos will no longer be forced to leave family and country to find a job. Brain drain is minimized, and Filipino workers get to spend quality time with their families. So focusing on job creation leads to all the rest.

I can’t for the life of me understand why the President opposes opening up the economy to more foreign investment (amendments to the Constitution). Nor why he opposes the creation of a department to better promote and regulate what is becoming the most dominant sector in the world—IT. And his decisions on mining have killed an industry that can bring great wealth, and jobs, to the country—in the countryside where they’re most needed.

If he truly wants to create jobs, he’d listen to the business chambers. Seventeen of them presented eight issues to him prior to his last State of the Nation Address that would create jobs. They were either ignored or given very little attention. Another Sona is coming up, another chance to address these issues. I’d like to suggest to his advisors that he address these this time, and force action over the next 12 months.

The Philippines is much improved today, but so much more can be done to give Filipinos jobs.

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* * *

I hope that the three “Napoles senators” realize that if they escape conviction through clever technicalities, that will only prove their guilt. If they are truly innocent, then they must prove it, nothing else.

The unconstitutionality of the DAP (Disbursement Acceleration Program) doesn’t exonerate them, and is irrelevant to their cases.

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TAGS: Disbursement Acceleration Program, Napoles, pork barrel scam, pork scam, Poverty, Poverty Reduction, Social Weather Stations, SWS
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