First of three parts
THE cheapest seasonal crop in the Philippines is sold during elections: the vote. Doing so allows the poor to earn from poverty.
As President Aquino is on the twilight of his administration, the poor remains among the populace—scrounging for leftover food at the back of restaurants; distributing white envelopes
to jeepney passengers; and resting their backs on cold pavements.
Before Mr. Aquino became president six years ago, the faces of the poor are pressed on windshields of cars caught in a traffic jam. As President Aquino steps down, he would have the faces of Kidapawan farmers battling drought, as a sign economic growth remained a promise as elusive as corrupt government officials.
It seems the stark contrast in the living standards of Filipinos only mirror the huge difference between their way of life, source of livelihood and income status.
The fifth progress report on the Millennium Development Goals (MDGs) released by the National Economic and Development Authority (Neda) stated that, while the Gini coefficient, a measure of inequality, went down to 0.47 in 2012, from 0.48 in 1991, the decline in inequality has been lopsided between rural and urban areas.
Data showed that, while inequality nationwide went down to 0.45 in 2012 from 0.47 in 1991, it rose in rural areas to 0.45 in 2012 from 0.39 in 1991.
Slow pace
HOWEVER, the Philippine Statistics Authority (PSA) estimated that the income gap between the bottom 10 percent and upper 10 percent was 11.35 percent in the first semester of 2015. This represented a decline of 0.72 percentage point, from the first semester of 2014’s 12.07 percent.
Notwithstanding this improvement, poverty reduction nationwide has been slow. The PSA said the country’s efforts in reducing poverty in relation to the MDGs have only been at medium pace using 2012 data.
The MDG target aims to halve poverty incidence between 2000 and 2015. The Philippines used as baseline the 1991 poverty-incidence rate of 34.4 percent, which translated to a target of reducing poverty- incidence rate of 17.2 percent.
However, based on the 2012 full-year data, poverty incidence was still above the 20-percent mark at 25.2 percent. Achieving the target means reducing poverty by 8 percentage points between 2013 and 2015.
As early as 2014, former Economic Planning Secretary Arsenio M. Balisacan said achieving this goal has become impossible. The national government said it can only bring down the country’s poverty incidence to as low as 18 percent to 20 percent by 2016 and that poverty incidence could be brought down to around 20 percent to 23 percent in 2015.
“Substantially bringing down poverty takes a long time, as experiences of other countries have shown. In the case of the Philippines, there is the added challenge of geoclimatic shocks,” Balisacan said in a briefing in Malacañang in 2014.
According to Dr. Rolando Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agribusiness, eight out of 10 of the poor are in rural areas.
“Why the high poverty? First, we have very low farm productivity relative to Asean peers, except banana and pineapples.
Second, we have very poor crop diversification in the past 50 years, which resulted to lower Philippine agricultural exports, as compared to other Asean neighbors,” Dy said in an e-mail.
Philippine Institute for Development senior research fellow Roehlano Briones, for his part, said two out of three poor workers are dependent on agriculture. He said the low farm productivity and limited diversification have translated to weak value adding, manufacturing and job creation in the sector.
Moreover, Briones said the average wage in the farm sector has not increased dramatically in the past years. “It has not at all kept pace with the average growth in income. What you see is stagnant incomes in agriculture.”
Geoclimatic shocks
THESE geoclimatic shocks have especially been brutal to the agriculture sector. A third of the country’s entire labor force derives its income from the farm sector. When disasters strike, it is the first to suffer losses.
The country is still experiencing a severe case of El Niño, and the damage caused by the dry spell is significant. As of the latest data, the Department of Agriculture (DA) estimated that the drought and damage caused by pests reached P8.02 billion in the first four months of the year.
With the losses suffered by the agriculture sector, prices of food increased. Food costs are a major contributor to household expenses, especially of the poor. University of the Philippines School of Statistics Dean Dennis Mapa estimated that food costs account for as much as 70 percent against 39 percent for all the households.
The huge chunk of household budgets allocated to food costs increases the inflation experienced by the bottom 30 percent. The inflation rate they experience is often greater than the inflation felt by the average Filipino.
Underinvestment
THE poor are especially sensitive to the rice prices, according to Balisacan. Based on the 2012 poverty data, he said high rice prices were among the reasons there was an increase in poverty incidence to 25.8 percent in the first six months of 2014.
However, economists, such as Benjamin Diokno, said that, despite the poor’s dependence on agriculture as a livelihood and food for day-to-day living, the farm sector has been neglected. In the past 10 years alone, Diokno said both the Arroyo and Aquino administrations were guilty of neglecting the agriculture sector.
“The first reason is that agriculture has been neglected both by the Aquino and Arroyo administrations. Food production grew by an average of 1.6 percent from 2011 to 2015; in fact, it was practically flat last year,” Diokno said. “One needs to focus on agricultural modernization and rural development, because a large part of the typical poor family’s budget is spent on food, and most of the poor resides in the countryside.”
Apart from the underinvestment in agriculture, Diokno said corruption issues are rife in the farm sector, as evidenced by the exposure of the fertilizer-fund scam and issues surrounding rice importation by the National Food Authority (NFA).
“A related problem is that most of the high-profile corruption took place, and is taking place in agriculture, such as the ‘Jocjoc Bolante fertilizer scam,’ the irrigation scam, NFA rice importation, and the serious smuggling of agricultural products such as rice, onion and garlic,” he added.
To be continued
Image credits: Nonie Reyes