This story was taken from Bulatlat, the Philippines's alternative weekly newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VII, No. 11, April 22-28, 2007

Elections and Poverty: Will Arroyo Beat the Odds?

The Arroyo administration consistently asserts that voting for its candidates will mean an improvement in the economy. But will this election really put an end to poverty?

BY JOSEPH YU

IBON Features

Posted by Bulatlat

“Wala rin mangyayari” (Nothing will change).

This was the reply of Bong, 30, a pahinante (helper) when IBON Features asked him if he thought the upcoming May national and local elections would improve the condition of poor people like him.

Bong had been voting since he reached 18 and is currently a registered voter in Mangahan, Pasig City. Still, he expressed support for an opposition senatorial candidate with a youthful image.

Poverty will undoubtedly be a major campaign issue in the elections. Administration “Team Unity” senatorial candidates said they are undertaking campaigns in barangays to present the Arroyo government’s 10-point “Beat the Odds” anti-poverty agenda to local leaders and residents.

But as the past elections have shown, Bong’s statement rings a sad truth: the elections will have no effect on the lives of the poor.

Poverty defined

The present administration’s lack of understanding – or deliberate deceit – of the root causes of poverty, were highlighted yet again by its responses when confronted by the growing problem of involuntary hunger among Filipino families. First, the president ordered concerned government agencies to alleviate the hunger problem within six months. Then, it released P1 billion ($2.1 million based on an exchange rate of $1:P47.64) for “emergency hunger mitigation.”

These are predictable responses for a government that views poverty in terms of manipulating figures to get desired results.

People should be considered poor if they have insufficient resources to maintain a decent standard of living and to develop to their fullest potential. But under the Arroyo government’s poverty framework, people are poor if their incomes fail to come up to an unreasonably low poverty threshold (defined as the income an individual or family needs to meet their basic food and non-food needs and thus, be considered no longer poor).

According to 2007 poverty threshold figures from the National Statistical Coordination Board, a worker in Metro Manila who earns all of P1,612 ($33.84) a month or P53 ($1.11) a day already has enough to meet his or her basic food and non-food needs, and therefore government no longer considers them poor. For an average family with six members, the poverty threshold would be P9,672 ($204.91) a month or P318 ($6.68) a day.

But these amounts are clearly just enough – at best – to maintain the barest physical existence. This is validated by the National Wages and Productivity Commission’s own “living wage” figures, which show that, as of January 2007, a family of six needs at least P721 ($15.13) a day, or more than double government’s poverty threshold, to meet its food and non-food needs. IBON estimates that eight out of 10 Filipinos are poor.

Using the poverty threshold, the government claimed that it had reduced the number of poor Filipinos from 25 million in 2000 to 20 million at present. But poverty cannot be alleviated, much less addressed, by such numerical manipulation. Poverty in the Philippines is deep-rooted and results from the unequal character of the country’s economic system, which is structured for the benefit of the interests of local and foreign elite. This inequitable structure has resulted in weak agricultural and manufacturing sectors, lack of jobs and livelihoods for the people.

Such situation is further exacerbated by the implementation of neoliberal economic policies starting in the 1980s, which opened the country’s markets to cheap imports, turned over public services to profit-oriented private companies and opened to foreign investors sectors previously restricted to local entrepreneurs and the state. In the process these policies have also destroyed livelihoods, led to widespread closures and retrenchments of local firms and driven thousands of farmers off their lands.

Thus, it should not be surprising that poverty continues to be a lingering social problem that has only gotten worse under an administration that does not even appreciate its root causes. In fact, it makes the problem worse by continuing to implement such damaging economic policies instead of those that would bring about genuine national development.

Beating the odds

This lack of understanding is reflected in the aforementioned 10-point poverty alleviation strategy, which instead of addressing the roots of poverty, hews to the foreign investment-driven strategy Arroyo has been pursing since she came into power.

Beat the Odds is an acronym that stands for: a balanced budget; education for all; automated elections; transport and digital infrastructure to link the country; terminating hostilities with the New People’s Army and the Moro Islamic Liberation Front; healing the wounds of EDSA; electricity and water for all barangays (villages); opportunities to create six to eight million jobs; decongest Metro Manila through the decentralization of government offices and new transport infrastructure systems; develop Subic and Clark as globally competitive logistic hubs in partnership with the private sector.

A closer examination of these strategies reveals that, devoid of a genuine national development strategy that addresses the country’s lack of industrialization and agricultural backwardness, they will not alleviate poverty and will even worsen it.

Take, for example, the goal to achieve a balanced budget. Economic planners recently announced that, with the declining budget surpluses, government might reach its goal by next year. And indeed, the Arroyo government’s budget surplus has fallen from a peak of P816.2 billion in 2005 ($14.82 billion based on the average exchange rate of $1:P55.09 for 2005) to P62 billion last year ($1.21 billion based on last year’s average exchange rate of $1:P51.31).

But government achieved this by squeezing Filipinos through the double whammy of higher taxes and declining spending on social services. The most onerous of these taxes is the reformed value-added tax (RVAT), if only because of its sheer regressive nature. The RVAT increased the VAT rate from 10 percent to 12 percent and removed exemptions on gas and electricity. As a result, the tax generated P77 billion in net revenues in 2006 (($1.5 billion based on 2006 average exchange rate), mostly by increasing the prices of basic goods and services.

Meanwhile, even as government was busy counting tax revenues, it failed to deliver social payback to Filipinos in the form of increased basic services. Real spending per capita on education of P1,508 in 2006 is 22 percent ($29.39 based on 2006 average exchange rate) lower than when Arroyo came into office in 2001, per capita health spending of P159 ($3.10) is 25 percent lower and on social security, welfare and employment of P532 ($10.37), 9 percent lower.

Thus, it should not be surprising that government is far from its stated goal of providing “education for all.” Millions of Filipino children, in fact, are unable to obtain a decent education. Of every 100 children who enter Grade 1, only 66 percent will finish elementary school, 43 percent high school and 14 percent college. As a consequence, in 2006, some 2.5 million children aged 5 to 17 were working either to augment their family’s incomes or to survive on their own.

Creating transport and digital infrastructure between the country’s islands also sounds like a laudable goal. But given such problems as widespread poverty in the countryside, and overall low computer ownership in the country (only some two out of every 100 Filipinos owns a computer) such infrastructure development may be designed primarily attract foreign investors such as agri-business enterprises and business process outsourcers.

The government’s stated goal of “opportunities” to create six to eight million jobs also seems doubtful, given the absence of a national industrialization program or moves to address problems of peasants in the countryside. It seems clear that the Arroyo government will once again rely on foreign investors for job creation even if decades of foreign direct investments coming in have not contributed substantially to solving the employment crisis in the Philippines. In this context, it should not be surprising that the president has continuously reiterated her intention to pursue the removal of economic sovereignty provisions in the current constitution, even in the face of widespread public disapproval of such moves.

Clash of elite

When IBON Features asked Bong why he believed that elections would not bring about change, he wisely replied, “Ganoon pa rin y’ung nakaupo” (Those in power are still the same people).

His reply showed a discerning grasp of what elections in the Philippines are all about, namely a clash of various elite factions. Whichever group wins, administration, opposition or even independent, it is still the interests of the local and foreign elite that will be promoted over those of the poor Filipinos who make up the majority of the population. Elections in the Philippines will not bring about the kind of fundamental economic and social changes that the country badly needs to truly progress.

That said, the upcoming polls are still viewed as a referendum on the performance of the Arroyo government. And with the consistent majority win of opposition bets predicted in various surveys, it seems that voters are set to reject Arroyo, if only because they see that her policies have only worsened their lives over the past six years. IBON Features / Posted by Bulatlat 

© 2007 Bulatlat ■  Alipato Publications

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