PH can soar
The Philippines is no longer poor. It is a net lender to the global financial system. In 2014 its foreign reserves amounted to $81 billion while its foreign debt was $54 billion, for an effective net lending to other countries of $27 billion. Poor countries cannot afford to lend.
But there are many Filipino families that are poor, in fact very poor. Some two million families are below or barely in the subsistence income level estimated at P180 a day for a family of five. About five million families are living on P270 a day, squeezing in housing, clothing and utility costs on top of food.
Yet among the 500 richest persons in the world in 2015 are seven Filipinos. How can there be so much wealth in the Philippines with poverty so widespread? The simple response is: Economic and political structures and dynamics tilt in favor of the wealthy few. Imperfections in the market system, like oligopolies and greed, obstruct the natural sharing of economic benefits.
The generation of the country’s wealth, which has made rich Filipinos richer, has been driven by sustained consumption growth over the last 20-35 years, fueled by the ever-increasing remittances of overseas Filipino workers. The market system has opened up great business opportunities for the provision of consumer goods. That consumption has been the principal driver can be clearly seen in the mushrooming of all-sized malls nationwide. Growth in investment, though taking a much smaller slice of the economic pie, also manifests in the housing construction boom in key population centers. It has likewise been propelled by the OFW remittances, now reinforced by foreign exchange revenues from the business process outsourcing sector. The wealth of the few richest Filipinos is the outfall from the sweat, blood and tears of the many struggling Filipinos serving the global business system. Many of the poor provide their services to the world to earn their keep; the rich rake it in at home.
This is not a rich-vs-poor commentary. This is merely stating a fact of Philippine economic reality. The local economy has turned around and grown substantially, with the bulk of the benefits going to the few rich, who share these with exporters of other countries from where the rich import goods that are sold to and consumed by the struggling many. The patriotism of the struggling many is an accidental consequence of the need to survive. The patriotism of the few rich is a choice that seems wanting, and a possibility that hopefully will still happen.
The market system is a force that serves and satisfies economic gaps. The global wealth, estimated at nearing $250 trillion, has been built fundamentally under the market system. But the distribution of wealth has been extremely lopsided: The richest 1 percent own 46 percent of the world’s wealth. Pope Francis rightfully observes that intervention by well-intentioned movers must be made for markets to react to common-good aspirations. Many times, the “invisible hand” can use a “guiding wand.”
Indeed, there is real challenge waiting to be confronted head-on by anyone with a group able to respond. The government, obviously, has been unable to work effectively to get the market system going for the broader distribution of economic goods across the economic landscape and pyramid. The pyramid’s slope remains steep yet broad-based despite the government’s conditional cash transfers and comprehensive agrarian reform, tax structures and fiscal policies.
There were activists in the 1960s and 1970s who saw the need to intervene in the economic processes so the poor’s concerns would be addressed. Many of them even offered their lives. Unfortunately, the alternative system that they proposed did not offer a real solution and instead became the excuse for the political and economic elite to justify its control over the government machinery. Until today, keeping the poor poor seems a pervasive agenda among the elite. Political dynasties and the unchanging leadership in so-called militant groups manifest this reality. A renewed vision is called for; an enlightened activism for the current milieu needs to be mobilized.
The “surviving activists” or even “armchair activists” of the past who had their hearts dedicated to the plight of the poor and today’s young activists engaged in solid social programs can link arms and pursue the development of social enterprises now. The market system can be used, guided by values that serve the common good. The motivation of the remobilized activists should transcend self-interests. Economic and financial resources will be tapped and redirected to sustainable ventures where the needs of the poor will be addressed beyond conditional cash transfers and agrarian reform.
Some of these “activists” must have formed part of professional management and corporate leadership who helped the rich become richer over the last 55 years. Perhaps it’s time the successful and effective leadership used by the economic and political elite of the past was made available for the development of social enterprises that can directly turn around the economic situation in rural areas where poverty is rife. The efforts will not be charitable acts but business ventures that will take advantage of the real opportunities offered by rural Philippines.
Despite the current state of its politics, there is no reason why the Philippines cannot keep pace with Thailand, Malaysia, Singapore and Indonesia as economic leaders in Asean. It should be able to play a role in the Asean integration for the benefit of Filipinos, contributing to the Asean Economic Community’s growth. With renewed activism among experienced Filipino managers and professionals mobilizing their capabilities for social enterprises, the Philippine economy can soar.
Danilo S. Venida ([email protected]) holds undergraduate and postgraduate degrees from the University of the Philippines and the Center for Research and Communication/University of Asia and the Pacific. He is a former president of the Philippine Daily Inquirer and is now a business consultant.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.