Poverty On The Rise, Corruption Still Problematic
The economy, the economy stupid. It’s all about the economy. And when corruption is still a big player in our country, a poverty stricken nation we will continue to be. I’m worried about the recent report by The Asian Development Bank, Philippines: Critical Development Constraints. The Financial Times, Forbes, and The Inquirer has stories on it. There’s some key highlights that I found interesting in the report. Which makes me kind of angry really (it seems I’m angry more often these days).
Philippines poverty creeps upward, this according to The Financial Times.
The Philippines’ poverty rate has risen for the first time since the Asian financial -crisis
Barring a brief rise in the wake of the 1997-98 Asian crisis, the Philippines’ poverty rate has moved steadily downwards since the 1986 fall of Ferdinand Marcos, shortly after which it stood at almost 50 per cent.
Mrs Macapagal, the president, has promised to cut poverty to 17-20 per cent of the population by 2010. That target now looks much harder to achieve after -government economists yesterday reported that the proportion of poor people rose to 32.9 per cent in 2006 from 30 per cent in 2003.
It does seem dire indeed, but when we have a President who is focused on her own political survival because of the corruption that is so rampant in her Administration, what can we expect. This of course is one of many key reasons why she should step down, she has lost the trust of the people as well as most officials. And in doing so, has created an environment of political instability, which lowers investor confidence. It all starts with The President. The buck must stop there.
Of course, the proportion may be 32.6 per cent, but trust me, even those above this threshold is suffering due to an increase in the cost of goods. Inflation talk anyone?
The article continues with a view from an independent labour economist, Clarence Pascual.
the Philippines’ was not generating enough well paid jobs for the growing number of Filipinos joining the labour force.
While the jobless rate fell, in part because of the changes in the way government counted the unemployed, the underemployment rate surged to 23.5 per cent in 2006, its highest in almost two decades.
“Underemployment has a stronger correlation with poverty than joblessness itself,” said Mr Pascual. Economists warned that the recent surge in global food prices could push poor Filipino households deeper into poverty. Those households spend a greater proportion of their meagre incomes on basic food items, notably rice, the global price of which this week soared by 75 per cent to its highest in two decades.
Note: the term underemployment has at least three different distinct meanings and applications. All three of them involve underutilization of labor that critics say is missed by most official (governmental agency) definitions and measurements of “unemployment.”
underemployment describes the employment of workers with high skill levels in low-wage jobs that do not require such abilities. For example, someone with a college degree may be tending bar or driving a cab or being a cashier.
Sounds like nurses, engineers, and doctors to me. Uhmm, can we say, OFW.
Philippines Must Curb Corruption
The Philippines has fallen behind its neighbors in economic development and must raise revenues, stifle corruption, improve infrastructure and create jobs to fuel growth and reduce poverty, the Asian Development Bank said Thursday.
ADB’s chief economist, said removing the most critical constraints will spur investment and spark sustained and high growth.
“This would ensure that the fruits of development are shared by all,” he said.
The report said the country’s fiscal situation remains tight, poor infrastructure has raised the cost of doing business, and worsening corruption and political instability have eroded investor confidence.
Of course, the constraints are too in depth to write here, but you can You can view the ADB Report by clicking on the link below Philippines: Critical Development Constraints
Among some of the highlights are,
Poor governance is a major concern for the Philippines. The Philippines has scored lowest among countries with similar per capita GDP levels on control of corruption and political stability since 1996, and on rule of law since 2002. The same study on which the table is based shows that the Philippines has lost momentum in controlling corruption, and has allowed Viet Nam and fairly soon,
Indonesia, to pass it. In the case of political stability, the Philippines has slipped, particularly relative to the 1998 level.
The perception of worsening corruption was found to partly explain the low investment rate in the Philippines. Poor governance was also found to translate into higher lending rates, reflective of premiums for worsening corruption, political instability, and internal conflict, acting as disincentives to private investment. A key reason for weak revenue generation—leakages in revenue collection—is rooted in persistent corruption and patronage problems.
I also found the following figure quite telling of what is happening on the ground, and already confirms what many Filipinos face every day. You can click on the image below to expand the image.
