A PASSION I have undertaken to share has given me the chance to visit my hometown more regularly these days. I left the small town of my childhood when I was sent to attend high school in the city, and had returned mostly only during long holidays and family reunions, until recently.
My regular visits have reacquainted my senses to the conditions in my province, Isabela, an agricultural valley 340 kilometers north of Manila.
There is a visual feast of outward progress. The big malls of SM and Robinsons, and the supermarkets of Savemore and Puregold, have set up an imposing presence. The fastfood chains of Macdonald’s, Jollibee, Chowking and Max’s brighten the streets with their happy logos.
But the ear catches decibels of discontent. My interactions with friends and family reveal tales of continuing hardship, even hunger, in the barrios. Similar stories from friends based in other provinces validate these tales of hardship as national in character. The tales are anecdotal in nature but they are given flesh by personal sightings and encounters, unlike bare statistics which merely provide a bird’s eye view of the forest, leading one to simply notice the giant trees and not the many stunted trees hidden under their canopies.
The outward progress is contradicted by street-level sights and sounds of poverty in the barrios. Progress above the surface is apparently not trickling down to the ground.
Admittedly, the establishment of malls and chain stores brings a cocktail of benefits to the provinces. These include increased business fees and taxes for the local government units, job creation, and rise in property values for landowners. There are also the better quality standards of goods and services made available to provincial folks, and the resulting pressure on local businesses to improve their own standards. But at what cost?
If 90 percent of the mall-located businesses are owned by Manila businessmen, as in all likelihood they are, the monthly revenues they capture are siphoned off to Manila, and removed from circulation in the provinces. For every P100 million earned by Manila businesses, that’s P100 million removed from the provincial economy.
If these revenues were instead earned by provincial businessmen, there is more likelihood that their income would be invested in the expansion or spin-off of businesses. Examples abound in my encounters on the ground. A local contractor utilized his earnings to put up a boutique hotel, a catering business, and a huge restaurant. A hospital-owning doctor diversified by investing in a memorial park, commercial buildings, a hardware store, and restaurants. A farm-inputs businesswoman expanded by setting up a huge modern piggery, a vacation resort, fishponds, a memorial park, and a four-story commercial building.
How do the benefits derived from the expansion of giant retail chains compare with the consequences of the revenue drain they cause on the provincial economy? In particular, do the provincial jobs created by these giant retail chains make up for both the actual jobs lost from the closure of local businesses, and the potential jobs foregone because homegrown businesses are deprived of growth and diversification prospects?
The provincial invasion of huge malls has led to distressing tales of closure of small businesses that used to sell groceries, clothes, appliances, construction materials, and even affected subsistence palengke vendors.
These issues and questions need to be confronted—not to purposely subvert free enterprise, but to shed light on the puzzling cause of this riddle: The national economy continues to grow at levels trumpeted with pride by the government, but poverty and unemployment figures remain unchanged at shameful and scandalous numbers.
The expansion of the retail business in the provinces is one of the major engines of the current kind of economic growth that does not alleviate poverty and that fails to generate significant jobs. Retail tycoons reap immense rewards from their virtual vacuum machines of income in the provinces.
Retail tycoons seem to be scooping up even the income windfall earned by the masses from the overseas Filipino workers’ remittances, call centers, and construction, because even the immense expansion in these other engines of growth is not creating enough poverty-alleviating jobs in the provinces.
The government should look at focusing more efforts in giving all-out assistance to livelihood projects, small-scale businesses, and small farmers that will help the poor create non-employment-dependent sources of income.
The current economic growth happening in the country is one that gives enormous rewards to those who already have so much in life, and leaves crumbs to the multiplying numbers of the poor.
Forbes magazine recently listed 50 Filipino billionaires with a combined fortune of P3.2 trillion, way above the P2.6-trillion national budget for 2015. Meanwhile, 54 percent of the population consider themselves poor, with 26 percent surviving below P19,000 in annual income.
This country has become a land of growing giants and shrinking midgets.
Joel Ruiz Butuyan obtained his degrees in economics and law at the University of the Philippines.