Development for whom?

The Philippines' economic boom only benefits those who run its economic system
Development for whom?

People, especially those living in urban poor communities, continue to wallow in poverty despite Philippine government claims that economic fundamentals are bright. (Photo by Basilio Sepe)

Glowing statements about rapid economic growth and development do not mean much unless its benefits and effects trickle down to the needy and destitute, Philippine President Rodrigo Duterte told delegates at the Asian Development Bank’s annual meeting this year.

The bank's headquarters have been part of Manila’s landscape since 1966.  The Philippine capital, where over 13 million people live, provides a vivid backdrop to development programs and multilateral financing schemes thought up by the bank.

When Duterte spoke of economic growth, he struck the nail on the head. Economic growth and development mean nothing if ordinary citizens do not benefit from them. Today, it is nearly impossible for the poor to profit from economic progress, since it has never been inclusive.

A shift from so-called "Millennium Development Goals" to "Sustainable Development Goals" to assure everyone of "inclusive growth," and that nobody will be left behind because social protection would be universal is a pipe dream.

The Philippines government's "AmBisyon 2040" plan says it all: Filipinos should enjoy a strongly rooted, comfortable, and secure life.

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But how can these goals be achieved? Will all these dreams come to fruition someday?

Goals are never enough. Policies need to be carefully mapped out. "The smallest deed is better than the greatest intention," American environmentalist John Burroughs once said.

The current landscape in the Philippines shows a political system being put into power by people who also run the economy. What chances do ordinary people have under such a set-up?

The country's "development plan" for the years 2017 to 2022 speaks of eradicating hunger and significantly reducing unemployment. It provides a simplistic view anchored on a sustained seven percent growth where unemployment is reduced to a minimum and helped by pro-active welfare programs.

Only China has managed to keep sustained growth for the past four decades.

The country’s economic managers, however, remain optimistic, especially with the government’s new tax reform program. But does the program give people more purchasing power? Added to this is the government’s refusal to end so-called casual labor.

While the government has embarked on free college education for students in government colleges and universities, transportation, food costs, and other incidentals make parents stop sending their children to school.

It is good to recall what the International Monetary Fund said in 2015 when five economists dismissed the idea of "trickle-down" economics. They said if governments wanted to increase the pace of growth, they should concentrate on helping the poorest 20 percent of its citizens.

A study conducted on advanced, emerging, and developing countries revealed that technological progress, weaker trade unions, globalization, and tax policies that favor the wealthy were responsible for growing inequality in society.

There has to be more budget for social protection programs. The US$10 increase in benefits for elderly poor citizens has very little impact due to inflation.

In a country where few families benefit from economic growth, thousands survive daily just to be able to seek employment elsewhere at the risk of physical harm and mental abuse. Prospects from foreign remittances and revenues from business process outsourcing (BPO) are not that rosy anymore.

Socioeconomic Planning Secretary Ernesto Pernia has admitted that the BPO industry has already plateaued and is being challenged by advances in technology.

How has recent growth affected the country’s informal settlers, those who live in the streets outside gated and guarded enclaves and the landless farmers? How will the government include everyone in its economic dreams?

A radical approach has been left unsettled between the communist-led rebel group, the National Democratic Front of the Philippines and the government. To most who exist and thrive on the status quo, an economic deal between the government and the rebels would be too radical, although it could be a good start to honestly look into people’s welfare.

Peace negotiations between the warring parties later this month are expected to iron out a proposed economic deal.

First, agriculture and agrarian reform need to be strengthened if the government is serious in pursuing sustainable growth in areas outside regional growth centers around the country. Food security and availability, which remain a serious concern, should also be addressed.

Will the government’s "Build, Build, Build" program provide the needed economic solution to poverty and enhance development all over the country? One can build roads and bridges but without connectivity, there would certainly be minimal impact on the economy and society.

Under Duterte, the Philippines is supposedly experiencing an infrastructure boom unseen since the time of strongman Ferdinand Marcos. Over the next decade, the government is set to embark on an ambitious US$180 billion infrastructure bonanza, set to transform the Philippines’ economy.

But it is essential to look at the country’s "Public-Private Partnership" program where you will be surprised to discover the biggest names in business are involved in the scheme. Will there ever be partnerships between farmers’ cooperatives, labor unions and the government?

No less than ADB president Takehiko Nakao said that it is imperative to close infrastructure deficits to promote growth. Projects without thorough feasibility studies can only lead to indebtedness and weaken the country's economic fundamentals.   

Melo Acuna has worked as a broadcast journalist for the past three decades. He has spent time with faith-based groups in various dioceses in the Philippines through his work as reporter, and later as station manager of church-run radio Veritas 846.

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