Still a huge problem

The Aquino administration raised the hopes of the people when it came to power in 2010 with its “daang matuwid” (righteous path) campaign, which emphasized that corruption was at the root of the country’s poverty problem. Five years into its six-year term, poverty remains a huge problem.

Last week, Economic Planning Secretary Arsenio Balisacan conceded that the Philippines would not meet its commitment on poverty alleviation under the Millennium Development Goals (MDGs), which were adopted by the United Nations during a summit of world leaders in September 2000. The Philippines had vowed to halve its poverty level to 16.6 percent by 2015. (The MDGs are broken down into eight targets that tackle the economic, social and environmental dimensions of poverty.)

In a speech before members of the Foreign Correspondents Association of the Philippines, Balisacan said that while the administration had made strides to grow the economy, the 2016 poverty-reduction goal “will fall short of the MDG target of 16.6 [this year], or half of the poverty incidence of about 33 percent in 1991.” From all indications, poverty will remain at 20-23 percent in 2015, with the government promising to reduce this to 18-20 percent in 2016.

As early as 2012, the government had been warned that it was failing in its MDG commitments, with a UN report (“Asian-Pacific Regional MDG Report: Accelerating Equitable Achievement of the MDGs”) describing the Philippines’ performance in meeting its targets as “dismal” barely three years into the deadline. The UN report pointed out that the Philippines was “years behind on most of its development objectives.” Of the seven MDGs assessed in the report, the country received failing grades in four—eradicating extreme poverty, achieving universal primary education, reducing child mortality, and sustaining maternal health. (On the other hand, it received favorable scores in gender equality, reducing

tuberculosis and HIV-AIDS prevalence, and ensuring environmental sustainability.)

It is not that the government did not know what to do to address poverty. In 2013, Balisacan was in fact hopeful, pointing out that generating better jobs for Filipinos and reducing the underemployment rate by half to about 10 percent over the next two years would help the Philippines achieve the “nearly impossible” 2015 MDG on poverty reduction. He emphasized that underemployment, or the poor quality of jobs of many Filipinos, was largely to blame for the extremely slow progress of efforts to lift people out of poverty over the past two decades.

Job generation is truly the key to fighting poverty. The focus should be on sectors where many of the poor are, particularly agriculture, as well as sectors such as tourism where the Philippines enjoys an advantage over other countries. However, the participation of the private sector is vital because it has the money to put up businesses and factories that will hire those people. The government, for its part, can direct its limited funding to infrastructure support such as roads.

Economist and Inquirer columnist Cielito Habito, the economic planning chief during the Ramos administration, had much earlier proposed that with the dwindling funds from public sources, it was logical to look to private finances to fund poverty reduction programs. Habito pointed out that more creative ways of harnessing private sector finances were needed to support the fight against poverty. He cited debt swaps, where loans owed to a willing creditor abroad would be paid through local projects for the poor or for the environment, as another creative and well-known mode of funding poverty reduction. At the same time, he noted that some wealthy corporations and individuals have made their own efforts to pay back directly to poor communities in various ways.

On hindsight, the Aquino administration may have focused too much of its time and effort on battling corruption at the expense of laying the groundwork for economic growth capable of generating the much-needed jobs. True, President Aquino can say that his administration has put three sitting senators in jail (although there has been no conviction yet) and is still pursuing major corruption issues. But he cannot boast as much in the area of alleviating the plight of the poor, or one in four Filipinos as of the latest count. Perhaps it’s time for the private sector to step up and do more in addressing this lingering problem. Taking some risk by investing in agriculture and tourism outside their comfort zones in Metro Manila is a good starting point.