To stamp out poverty
The robust economic growth during the Aquino administration has seen domestic wealth getting so large that the richest Filipinos have landed in Forbes magazine’s annual listing of the world’s billionaires.
The latest tally released by the international publication the other day showed 11 Filipinos making it to the roster dominated by US-based entrepreneurs. SM founder Henry Sy, 91, is the wealthiest at No. 71 with $12.9 billion. John Gokongwei, 88, is the second wealthiest at No. 270 with $5 billion. Lucio Tan, 81, is No. 380 with $4 billion, and banker George Ty, 83, is No. 421 with $3.7 billion. The other Filipino billionaires listed are construction magnate David Consunji, businessmen Andrew Tan and Tony Tan Caktiong, ports magnate Enrique Razon Jr., Puregold’s Lucio Co, stockbroker/insurer/car dealer Robert Coyiuto, and realtor and former senator Manny Villar.
READ: 11 PH tycoons on Forbes’ 2016 roster of billionaires
Article continues after this advertisementThe extent of the wealth of the richest Filipinos is enormous. In 2015, the 50 richest Filipinos in the Forbes list had a combined wealth of $76.6 billion, or P3.62 trillion at current exchange rates. This is bigger than the entire government budget of P3 trillion for 2016.
One might ask: Is there anything wrong with that? Shouldn’t it be a source of pride in the corporate world to see Filipino entrepreneurs making it big? But another perspective dictates that as an economy grows, poverty should also decline. And against the bigger backdrop of Philippine economic growth remaining noninclusive, much expectation is directed at the country’s wealthiest. Many on the list, in trying to meet the expectation, have donated large sums to higher education, environment protection, and housing, among other programs designed to ease the plight of the poor. Still, the private sector is called upon to do more.
Inquirer columnist and former economic planning secretary Cielito Habito has noted that in certain parts of the world, economic growth led to poverty reduction. He said that although certain countries in Asia were successful in translating economic growth to poverty reduction—with every one percentage point of gross domestic product growth resulting in poverty reduction of one to two percentage points—poverty in the Philippines has not been reduced by its GDP growth. The Philippines’ GDP from 2004 to 2009 grew by an average 4.9 percent, but its poverty incidence even increased to 26.5 percent in 2009.
Article continues after this advertisementThe situation has changed very little under the Aquino administration. The Philippines in fact missed its Millennium Development Goal of halving poverty incidence to 17 percent by 2015 from 34 percent in 1991, as one in every four Filipinos has remained poor. Economist Benjamin Diokno even challenged this figure, arguing that the real poverty picture might be worse than what the official statistics suggested. He pointed out that in 2012, the poverty threshold was P18,935 a year, P1,578 a month, or P52.60 a day—“the height of absurdity,” he said, as he challenged public officials to survive on P57.60 a day for even a week.
The government has some programs to address poverty. Starting from the Arroyo administration, it has been providing direct assistance to extremely poor families through social protection programs. The biggest is the CCT (conditional cash transfer) scheme, in which these families receive cash assistance provided they fulfill requirements for free child immunization and send their children to school. The government is also boosting tax collection to fund a universal health program and improve access to basic education. However, it can only do so much, and this is where the private sector should come in.
Economists here and abroad have identified various ways as to how businesses can help alleviate poverty. The most common is for companies to transfer profits to charitable causes targeting the poor. Another way is for manufacturers and other firms to reduce the prices of their goods and services. Businesses can also employ more people since job generation has been proven to address poverty. Another suggestion is for companies to prioritize the welfare of their own staff members by paying them more or providing them with training or support. There is a study in the United Kingdom showing that poverty in modern Britain was caused as much by low-quality, low-paid employment as unemployment. If business is to reduce poverty, it is this that it should focus on, according to the study. This is very applicable to the Philippines where the minimum wage has failed to catch up with the ever-rising costs of living.
The government alone cannot stamp out poverty. It is very clear that the private sector must do its part if the nation is to address what is described as one of the biggest moral challenges of this century.
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