Poverty isn’t really falling, govt can do more – IBON Foundation

December 23, 2023



The last big release of official statistics for the year is sobering and preempts the revelry that, somehow, Filipinos will find a way to have in the closing days of the year.

The Philippine Statistics Authority (PSA) released the preliminary 2023 first semester official poverty statistics. The results seem favorable at first glance with the incidence and magnitude of poverty reported to decline from the last reporting year in 2021. That is, until we remember that the country was still suffering the pandemic lockdowns of the Duterte administration in 2021.

The reopening of the economy is the main factor in the reported decline between the first semester of 2021 and the same period in 2023. But it has to be stressed that this isn’t a constructive action to reduce poverty and is just a passive lowering of restrictions on economic activity that were too harsh and too long to begin with.

Poverty only seems lower because it’s compared to when the economy was locked down. Compared to the first semester of 2018, there are three (3) million more poor Filipinos or 472,000 more poor families – even by the unrealistically low poverty line of just Php91 per person per day. This is a better indicator of the structural direction that poverty is taking given the preferred obsolete “free market” policy thrusts of consecutive administrations.

While falling poverty should always be taken as good news, policymaking shouldn’t be driven by what’s good for economic propaganda. After a year-and-a-half already of the economy reopening, and despite growth hyped as among the fastest in Asia, the government should be asking why poverty is still above pre-pandemic levels.

Like New Year’s resolutions, aspirational targets always give an endorphin rush especially for Filipinos who are always portrayed as a hopeful lot. The Marcos administration is playing that game and audaciously still declared its goal of single-digit poverty by 2028.

Poverty incidence even according to the much too low poverty threshold will not be reduced to single-digit levels by 2028. The rate of poverty reduction from reopening after 2021 is already at an artificially fast pace but even this isn’t fast enough – what more how poverty incidence actually increased between 2018 and 2023.

Poverty is stubborn from high disguised joblessness and because there is so much informality in the economy. It’s also important to stress how the first semester poverty results confirm the incorrectness of using headline unemployment figures to claim a “bright jobs market,” as the government is so insistent on saying. The incidence and magnitude of poverty increased between the first semester of 2018 and the first semester of 2023 despite unemployment falling from some 5.4% to 4.6% over that same period.

Substantial amounts of cash assistance will provide momentary relief for poor families and can reduce officially reported poverty. This is the biggest achievement of the likes of the Pantawid Pamilyang Pilipino Program (4Ps) which has grown twenty-fold from Php5 billion in 2009 to Php103 billion this year.

That kind of statistical improvement in poverty figures is artificial though and sustainable poverty reduction comes from more jobs and better incomes for every Filipino. This can only come from structural transformation of the economy with Filipino industrialization astride modernized agriculture.

Poverty is paradoxically helpful for politicians and their populist propaganda. The default mode of most Filipinos is of a government absent from economic activity so their livelihoods are their personal responsibility. In this context, amid the chronic poverty that inevitably accompanies such an economy, politicians twist government welfare programs as patronage given benevolently as charity by caring leaders. The current administration is very much in this mold.

But poverty persists not because there aren’t enough welfare programs but because the economy isn’t creating enough jobs and incomes for most Filipinos. While our economic managers insist on obsolete “free market” economics because this is their dogma, many of our politicians likely prefer their constituents to be poor because the dependence this creates helps keep them in power.

Instituting a radical rethink of the country’s economics and politics in government is long overdue.




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IBON Foundation

IBON Foundation is a non-stock, non-profit development organization. We have been serving the Filipino people through research and education since 1978. IBON seeks to promote an understanding of socioeconomics that serves the interests and aspirations of the Filipino people. We study the most urgent social, economic, and political issues confronting Philippine society and the world.

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