Dark Legacies: The Economy Under Arroyo

In 2006, the net worth of just the 20 richest Filipinos – including close Arroyo allies Lucio Tan, Enrique Razon, Jr., Eduardo Cojuangco, Enrique Aboitiz and others – was P801 billion (US$15.6 billion), which was equivalent to the combined income for the year of the poorest 10.4 million Filipino families.

The period 2001-2009 is the longest period of high unemployment in the country’s history – the true unemployment rate averaged some 11.2 percent. Around 730,000 increase in jobless Filipinos from Jan. 2001 to reach 4.3 million in Jan. 2010. There are 2.4 million increase in underemployment from Jan. 2001 to reach 7.1 million in Jan. 2010. Combined unemployment and underemployment increased by 3.1 million from Jan. 2001 to reach 11.4 million in Jan. 2010. Some 877,000 jobs were created annually since Jan. 2001 (28.1 million) to reach 36.0 million in Jan. 2010. However the quality of jobs created is poor: merely part-time work increased by 3.8 million from Jan. 2001 to reach 12.3 million in Jan. 2010, accounting for over one out of three of all jobs. Also, out of 36.0 million “employed” in Jan. 2010: 3.8 million are “unpaid family workers” (585,000 increase from Jan. 2001), 12.1 million are “own account workers” mainly in the informal sector (1.6 million increase), and around 12.6 million are “wage and salary workers” but without written contracts.

The period of 2001-2009 has seen the most Filipinos forced abroad to find jobs in the country’s history – deployments averaged 1.04 million annually compared to 469,709 (Aquino), 713,505 (Ramos) and 839,324 (Estrada); 1.42 million were deployed last year or 3,898 Filipinos leaving every day. There are over 9 million Filipinos forced to find work abroad.
The gap between the NCR minimum wage and the family living wage more than doubled to some P550 (NCR minimum wage P404 and estimated family living wage P957 in June 2010) from just P257 in 2001 (NCR minimum wage P252 and family living wage of P509). The Arroyo administration has had the smallest increase in workers’ real wages over its term of any government since the Marcos dictatorship – with an increase in real terms of just P5 over its nine-and-a-half years compared to P82 during the time of Aquino, P16 of Ramos, and P22 of Estrada (inflation-adjusted figures based on 2000 prices).

Arroyo administration said that in the fiscal sector, the government will control the budget deficit by collecting taxes vigorously and spending money prudently. On The cumulative national government deficit from 2001 to 2009 is P1.34 trillion or more than triple the deficits of the Aquino, Ramos and Estrada administrations combined (P422 billion). The Arroyo administration paid P5.1 trillion in debt service from 2001 to 2009 – this is nearly triple the P1.8 billion in debt payments made over 15 years by the Aquino, Ramos and Estrada administrations combined. Yet government debt has continued to rise to P4.36 trillion in February 2010 which is more than double the P2.17 trillion debts inherited from the Estrada government. The administration has effectively been borrowing an additional P243 billion annually since coming to power.

On social services, the Arroyo administration (2001-2009) allotted only 15.1% of the national budget to education which is lower than under Estrada (18.7%) and Ramos (15.5%) though more than Aquino (12.3%). To health, it allotted only 1.8% of the national budget which is lower than under Estrada (2.4%) and Ramos (2.6%) and Aquino (3.1%). To housing, it allotted only 0.4% of the national budget which is lower than under Estrada (0.8%) and Ramos (0.6%) while higher than Aquino (0.1%).

In 2010, the Arroyo administration is only spending P7 per Filipino per day on education, P1 on health and 16 centavos on housing – while paying the equivalent of P22 on debt service.

The number of out-of-school children and youth increased by 2.45 million between school year 2000-2001 and 2008-2009 – consisting of an additional 1.62 million children aged 7-12 years old and an additional 822,097 children aged 13-16 years old – to reach a total of 4.69 million. The number of elementary-age out-of-school children increased by 1.62 million between school year 2000-2001 and 2008-2009 to a total of 2.04 million. The number of high school-age out-of-school youth increased by 822,097 between school year 2000-2001 and 2008-2009 to a total of 2.66 million. 1.95 million of these children and youth – consisting of 1.59 million of the elementary-age children and 360,000 of the high-school age children – are directly due to the deterioration of participation rates during the Arroyo administration. Elementary school participation rate dropped from 96.8% in school year 2000-2001 to 85.1% in 2008-2009; the high school participation rate dropped from 66.1% to 60.7% over the same period.

On agriculture and fisheries, only an average of 172,600 agricultural sector jobs were created annually over the last nine years – from 10.25 million in Jan 2001 to 11.81 million in Jan 2010.The agriculture sector has fallen to its smallest share in gross domestic product (GDP) in the country’s history – 18.1% (2009).

On rice sufficiency Arroyo administration promised to have enough supply of rice for the country. But in 2001 rice imports increased 220% from 754,328 tons to a record 2.4 million tons in 2008, with 1.7 million more in 2009. The price of rice increased 75% between 2001 and 2009: of regular milled rice to P30.69 per kilo (from P17.54) and of well milled rice to P34.12 per kilo (from P19.43). The nominal minimum wage meanwhile only increased 62% between 2001 and June 2010.

On land reform, the Department of Agrarian Reform (DAR) of the Arroyo administration distributed an average of 119,301 hectares annually (2001-2008) which is smaller than under Estrada (121,274 ha., 1999-2000), Ramos (296,395 ha., 1993-1998) and Aquino (169,063 ha., 1987-1992). (No equivalent data available for land distributed by the DENR)

The Arroyo administration said that Information and communications technology (ICT) will jumpstart our old stalling economy and make it leapfrog into the new economy. The Business Process Outsourcing (BPO) industry rapidly grew from 5,600 employees and US$56 million in revenues in 2001 to 442,164 employees and US$7.2 billion in revenues in 2009. But in 2009 the sector still accounted for just 1.3% of total employment and only some 2% of gross domestic product (GDP).

The manufacturing sector has meanwhile shrunk to as small as in the 1950s – 21.8% of GDP (2009). The sector created just 15,370 jobs annually since Jan-01 to reach 3.0 million in Jan-10. In contrast, seven times more household help jobs were created over the same period with 107,730 added annually to reach 2.1 million in Jan-10; the number of household help in the country is fast approaching the number of manufacturing workers.

On oil, the price of diesel rose 183% between January 2001 (P13.82 per liter) and May 2010 (P39.05) and of gasoline by 180% (from P16.56 to P46.21. The peso price per liter of Dubai crude has increased by an average of P0.13 per month since January 2001 – yet the pump price of diesel has increased by an average of P0.22 per month, which is excessive even if the effect of the RVAT law since November 2005 is factored in.

On taxes, every Filipino 15 years old and over, paid the government an extra P6,025 in taxes over the last four years (2006-2009). This is equivalent to the additional P363.0 billion in taxes paid by Filipinos due to the imposition of RVAT in Nov 2005. The total amount of kickbacks, ill-gotten wealth and payoffs involved in just 16 major corruption cases reaches as much as P20.9 billion (US$430 million). The amount remains substantial even if the interrupted NBN-ZTE and Cyber-Education deals are excluded. IBON Features Posted by (Bulatlat.com)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

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    it still rings in my ears: 'food on the table of every Filipino family'. this is Pres. Arroyo's election slogan…is it 'of every' or 'of a few' Filipino family? take a look at the net worth of only 20 richest Filipino of P801 billion in 2006-which is equivalent to the combined income for the poorest 10.4 million Filipino families. it is so pitiful of these poor families wrestled of their right to earn for a normal living condition.

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