Philippines: Human development is not matter of size, but of quality

Members of the Alternative Budget
Institute (ABI), a consortium of 60
non-governmental organizations
led by Social Watch Philippines,
called on citizens to vote only for
candidates supporting the MDGs.
(Photo: ABI-ENVI)

The Philippines needs a post-2015 development agenda that reclaims human rights as the normative framework, especially ensuring the right to education, health and decent work, and addressing the long-standing inequalities, concludes the report 2013 of Social Watch-Philippines. Economic growth averaged 4.7 per cent a year since 2000 in this South Asian country, but only the elites harvested the benefits, while poverty increased to reach more than one of every four Filipinos, says the study.

“It is not so much the size of the economic growth, but its nature that matters,” concludes Marivic Raquiza, main author of the report. Social Watch-Philippines emphasizes that an effective post-2015 framework for development must include the completion of the agrarian reform, a brand new progressive taxation system and the revitalization of the manufacturing sector to ensure the creation of quality jobs. In the global level, a new financial architecture is required to provide adequate policy space for this and other countries to independently chart its own development agenda.

The 2011-2016 Philippine Development Plan proposes an inclusive growth, defined as sustained, high growth that generates mass employment and reduces poverty. This is to be achieved, according to President Benigno Aquino, by “improving transparency and accountability, strengthening the macro-economy, boosting the competitiveness of industries, facilitating infrastructure development, strengthening financial sector and capital mobilization, improving access to quality services, enhancing peace and security for development and ensuring ecological security.”

But the United Nations, civil society organizations and social movements has described the Philippines’ performance regarding the MDGs as dismal. Poverty incidence for the first time increased from 2003 at 24.9% to 26.4% in 2006 and then to 26.5% in 2009. In the meantime, poverty also worsened for young people, migrants and formal sector workers (each with 1% increase), and children and individuals in urban areas (with 0.3% increase), according to official statistics. The poorest people are fisherfolk (41.4%), farmers (36.7%) and children (35.1%).

In the last decade, economic growth has not benefited those who need it most, warns the report. In 2011, gross domestic product increased by USD 17 billion; in the same year, the wealth of the 40 richest Filipinos rose by USD 13 billion (37.8% in total). “Little wonder why the country’s Gini co-efficient —at .44— is among the highest in Southeast Asia,” remarked Raquiza.

The Philippine unemployment rate has stagnated in the last five years at 7%, underscoring that this indicator is not sensitive to changes in labor trends because the country’s labor force is significantly composed of self-employed workers and unpaid family workers. But the high averaged underemployment rate (22.7%) is an even more meaningful indicator, because most people do not have access to social protection.

Although the agricultural sector has shrunk (from 25.1% of GDP in 1980, to 12.8% in 2011), and the labor-intensive nature of the industrial sector has high employment potential, including for the less-skilled workers, the manufacturing sector has declined (from 25.7% of GDP in 1980, to 19.4% in 2011), while the services sector is burgeoning (from 36.1% of GDP in 1980 to 55.7% in 2011).

“The government’s development strategy is essentially ‘business as usual’: remaining focused on ‘growing the pie’,” adds Raquiza. “In this vision, the role of the private sector is enhanced”, but the public-private partnerships program “was very slow to start and as a result, as of this writing, is still in the early stages of project development,” wrote Raquiza.

In the meantime, the lion’s share of the social protection budget is devoted to the Pantawid Pamilya Pilipino Program, patterned after those conditional cash transfer plans implemented in Mexico, and Brazil. Its allocation has been dramatically increasing every year since the program started in 2007, but the program is partially funded on loans from the World Bank and the Asian Development Bank, which raises questions about its financial sustainability. Besides, the beneficiaries must attend to education and health centers that provide bad quality services.

“Social protection could better focus on setting up the universal social protection floor so that not only the targeted few, but everyone, is able to access the minimum requirements that will allow them to live a life of dignity,” reads the Social Watch-Philippines’ report, which also suggests “to make job creation central in the development agenda” and “to revitalize the manufacturing sector.”

Philippines Social Watch Report 2013: