May 2, 2013

Why Extremely Poor in the Philippines keeps rising in spite of Fastest Economic Growth in Asia?

Analysts and even the Philippine government said "The effect of this Economic growth could not be experience by the poor" in an overnight which means maybe tomorrow everyone will enjoy a better life but could it be possible, when could it happen?

The Philippine government since the Arroyo administration introduced the easy "Band Aid" solution for the poor through a "direct cash transfer programme" which is known as "Pantawid Program". The same system is followed by the Aquino Administration but how effective is the Pantawid program?

There is a sayings "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime."

The pantawid program is good but it is not a long and lasting solution to end the poverty in the Philippines.

While other neighbors are enjoying thousands of dollars remittance from the "OFW" abroad, other neighbors on the other hand are continuously suffering hunger and living below the standards which we could consider as "extremely poor".

Do you think that it is right that Tax payers are paying their taxes to the government and would just be distributed to the poor families for their basic needs for one day then tomorrow the same problem again?

There seems to be a paradox in the present Philippine situation with a large number of Filipinos still mired in extreme poverty amidst an economic growth that is among the fastest in the region.

On Tuesday, the National Statistical Coordination Board (NSCB), a government agency, announced that the poverty incidence in the Philippines stood at 27.9 percent in the first semester of 2012, practically unchanged from the same period in 2009, which was 28.6 percent, and in 2006 which was 28.8 percent.

The NSCB data show that 10 percent of the country's population of about 97 million is still living below the poverty level.

In a briefing, NSCB Secretary General Jose Ramon Albert said that during the first semester of 2012, a Filipino family of five needed 5,458 Philippine pesos (136 U.S. dollars) monthly to meet basic food needs.

"Families earning that amount were considered to be living in extreme poverty," Albert said.

After the bad news, that was bannered by leading Manila newspapers, came the good news on Wednesday when Moody's Analytics described the Philippines as a "rising star" poised to record one of the fastest growth rates in the world.

Moody's Analytics said that the Philippines is likely to grow between 6.5 and 7 percent this year and within the same range next year, "outperforming not only the anemic advanced economies but also many robustly growing emerging markets."

It also said that if favorable economic trends continue, the growth rate for the Philippines could be close to 8 percent by 2016.

Earlier, the Asian Development Bank (ADB) and the World Bank also upped their growth forecast for the Philippines this year to 6 percent.

Moody's Analytics, a sister company of credit rating watchdog Moody's Investor Service, said the country's 6.6 percent growth in 2012 was achieved despite weak growth in the United States, a crisis in the eurozone and a slowdown in China.

On March 27, the Philippines also obtained its first-ever investment-grade rating from Fitch Ratings.

On a similar vein, international credit rating firm Standard & Poor's has raised its growth forecast for the Philippines for this year from 5.9 to 6.5 percent. At the same time, it said the economy was expected to post another robust growth of 6.3 percent in 2014.

"The ASEAN 5 - Indonesia, Malaysia, Philippines, Thailand and Vietnam - are more domestically driven and, therefore, continue to enjoy relatively high and stable growth rates. This is not the case elsewhere," S&P said.

The paradox of continuing poverty amidst strong growth has been explained by analysts here.

Norio Usui, ADB senior country economist, said that the government must solve the problem of jobless growth if it hoped to reduce poverty.

"I am not surprised at all. The benefits of strong economic growth have not spilled over to the people because they still cannot find a job," Usui was quoted as saying in a report.

In January 2013 jobless rate stood at 7.1 percent, with a further 20.9 percent underemployed or those working fewer than 40 hours a week. About 41.8 percent of the underemployed are in the farming sector.

Professor Benjamin Diokno of the University of the Philippines School of Economics said that the strong economic growth in 2010 and 2012 "were not enough to extricate a lot of people from the poverty trap."

Sen. Ralph Recto, chairman of the ways and means committee of the Philippine Senate, said that only the rich and the educated have benefited from the infrastructure projects of the government and not the poor and uneducated.

"This led to income inequality with the rich getting richer and the poor poorer," Recto said.

Presidential Spokesman Edwin Lacierda said the challenge now is to spur growth in agriculture to create more jobs, increase production and ensure that the production translates to a greater income for farmers since the bulk of the population was still in the agricultural sector.

Lacierda noted that private investments had increased, and that public infrastructure spending in 2012 was around 250 billion pesos (6.25 billion U.S. dollars).

The National Economic and Development Authority (NEDA) said it hoped to see improved results given new investments in infrastructure, agriculture and manufacturing.

"Although this first semester result on poverty incidence is not the dramatic result we wanted, we remain hopeful that, with the timely measures we are now implementing, the next rounds of poverty statistics will give much better results," NEDA Director General and Economic Planning Secretary Arsenio M. Balisacan said at a briefing.

With reports from Wall Street Journal, Inquirer, Malaya and philSTAR


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