Tick-Tock: the Philippines and the Race Against the United Nations MDGs

31 Oct

Editor’s note: This article appeared on Sanggu’s Bantay Presidente 100 last October 3i, 2010 and was co-authored by Carlo Roman (AB EC-H ’12),  AVP for Externals and Anthony Sabarillo (AB EC-H ’12), AVP for Academic Research and Development.


The 65th General Assembly of the United Nations held last September 20-22, 2010 provided a glaring look at a significant hurdle for President Benigno Aquino, Jr.’s administration – that of the UN Millennium Development Goals, set in 1990 by 192 UN member states and 23 international organiations for the eradication of poverty by the year 2015. Five years shy from the deadline and the country has a seemingly long way to go, with only five of the eight scheduled goals determined to beat the buzzer and serve as yardsticks for how far the country has come in its quest for development. In particular, the elimination of extreme poverty and hunger, improvement of maternal healthcare, and achieving universal primary education are the three things UN Secretary-General Ban Ki-moon has asked Aquino to focus on, seeing that the country is bound to fall short of its promises at the rate it is currently going.

If Socioeconomic Planning Secretary Cayetano Paderanga, Jr. is to be believed, the target of halving levels of extreme poverty by 2015 will be achieved; the proportion of the Philippine population living below the subsistence threshold has steadily dropped from 24.3% in 1991 to 14.6% in 2006, with Paderanga projecting 2015 levels to reach a low of 12.15%. According to government watchdog Social Watch Philippines (SWP), however, the 2010 situation is probably worse than the government would like to admit; given the global economic crisis suffered only last year coupled with the continued difficulty of Filipinos everywhere to find jobs, the need to reconcile government statistics with the reality of the situation suddenly becomes apparent. Regardless of whether or not the country is statistically progressing toward the main goal of MGD #1, the UN progress reports presented by Pres. Aquino will have to translate into something more concrete for Filipinos to start feeling the effects of the said migration from extreme poverty.

The need to spur economic growth once again becomes an issue – a crucial step toward getting stomachs filled and people back to their feet. The Aquino administration has been vocal about reducing the costs of doing business to attract local and foreign investors, and the government would do good to look into alternative financing programs to get the investment ball rolling. More important than the nominal increase of production, however, is the urgent need to halt the growing gap between the very wealthy and the extremely poor – one that can only be addressed if the economic growth pursued by the government is allowed to trickle down to society’s lowest tax brackets and push them up over the poverty line.

One obvious way to address the Philippines’ bad marks for its progress on the MDGs is the good use of the government’s budget; what’s not so obvious though is what “good use” or proper allocation actually means. Recently, the Aquino administration was criticized by some Senators for the “uneven distribution” of the 2011 budget. This was highlighted by a cut in the judiciary’s budget and the lack of capital outlays for state universities. The judiciary was not pleased at all, and some members threatened to take a leave of absence as protest. There was a report that even Department of Education Secretary Armin Luistro had some complaints regarding allocations to his department. At the same time, the Department of Social Welfare and Development (DSWD) received a hefty 123% increase in its funds. According to the 2011 General Appropriations Bill, DSWD’s budget will go up from P15.4 billion this year to P34.3 billion next year. It’s like getting a 1000-peso allowance this week, and P2230 on the next. Sounds good for DSWD and for the underprivileged.

Senator Ralph Recto, however, thinks otherwise, saying that the DSWD lacked a monitoring system to check disbursements in the Conditional Cash Transfer program (the funds of which have been increased from P10 billion to P21 billion—more than double the original). In other words, he thinks the DSWD will not be able to tell exactly where the money will go. The Conditional Cash Transfer Program aims to give subsidies or money to those who need it (up to P1,400 will be given to each of the 2.3 million families classified as “poor”), but under certain conditions: only families with children attending school at least 85% of the time, and with lactating or pregnant mothers who go to health centers for checkups will receive money from the department. Recto argues that there has been no proof of the effectiveness of the government’s handing out of money directly to the poor in accomplishing the MDGs – a source of concern given the budgetary upgrade afforded to the DSWD by the government.

DSWD Secretary Dinky Soliman, of course, defended the 123% increase, saying that there are set mechanisms to make sure that families follow their conditions for receiving cash. A “compliance verification system ” (or monthly checks on the beneficiaries) will be used. She further mentioned that “volunteer groups and faith-based organizations” will complement these mechanisms. These groups will check whether the families are participating in “family development sessions” where they will be taught skills in child-rearing and values formation. Leila Salaverria of the Philippine Daily Inquirer also reports, “The DSWD is also working closely with the local governments’ social officers to ensure that the beneficiaries chosen for the conditional cash transfer program are among the poor and that they are using the money for the benefit of their children, according to Soliman.”

Still, some legislators are doubtful. Senators Joker Arroyo and Edgardo Angara in particular were not very optimistic about the program. Aside from criticizing the said uneven distribution of the budget, they dubbed DSWD’s program as a “dole-out system” which does not generate sustainable economic growth. Angara suggested that the government should instead focus on generating more jobs and improving the research and development for the agricultural sector. Senate Finance Committee Chairman Franklin Drilon wanted a deeper examination the program given its considerable budget. Last September 20, the Senate let Sec. Soliman defend the CCT program, “We are learning from the lessons learned in Mexico, Brazil and Colombia. We believe we are on the right track.” Sec. Soliman might be pertaining to Mexico’s highly praised poverty-reduction program called, “Progresa-Oportunidades” which gave subsidies to families — directly to women — making their kids go to school rather than work in the fields. The program proved effective in improving the children’s education, but did not necessarily generate jobs that matched their new skills.

The DSWD will also identify which families receive rice-subsidies from the National Food Authority. BusinessWorld reports: Ms. Soliman said DSWD’s “rice subsidy” program will be broken down into three, namely, food-for-work for internally displaced persons, supplemental feeding for malnourished children, and rice subsidy for poor farmers and fishers during lean months.

Instead of selling rice at a lower price to the poor, they will be given the rice itself. Roman M. Sanchez, president of the NFA Employees’ Association, did not approve of this. Along with other groups, the association held a rally last September 23 at the Department of Finance. As BusinessWorld reported: “According to Mr. Sanchez, giving free rice to farmers will only serve as ‘dole-outs’ that do not have a ‘multiplier’ effect. ‘It’s different when you purchase palay from the farmers, where his or her purchasing power will rise,’ he said in an interview.” This means that instead of farmers earning and spending part of what they earned — letting the money circulate numerous times and therefore “multiply” in the economy — the rice will just be consumed right away.

It is for most people an economic “no-no” to generate demand without improving productivity, which will inevitably result in an increase in prices in the long run. But others will argue: how do we address the immediate or short run needs of the poor? Some will retaliate: Yes, the poor have enough food to eat for today, but what about for tomorrow, for next week, for next year, for the next several decades? It’s basically an unending debate. Let’s remember, however, that poverty is a dynamic reality—it is living and breathing in real time, ever-present and ever-evolving, existing both in the short run and in the long run. The government has always been given the difficult task of finding the right combination of demand-side and supply-side solutions. But whatever combination it chooses, it must make sure it does not waste the confidence and goodwill of the people—basically our country’s limited social capital. In other words, they better not let the budget go to waste in the hands of the usual suspects: corruption and incompetence. A small mistake may lead to dire consequences, and it’s only five more years before the UN’s deadline for accomplishing the MDGs; the Aquino administration better make every year count. After all, just like the budget, time is money.

Sources: http://www.philstar.com/Article.aspx?articleId=613577&publicationSubCategoryId=63 http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100913-291957/123-hike-in-DSWD-budget-draws-flak http://www.bu.edu/gdp/events/past-events/santiago-levy/ http://www.philstar.com/Article.aspx?articleId=613577&publicationSubCategoryId=63 http://newsinfo.inquirer.net/breakingnews/nation/view/20100913-292074/Dinky-defends-DSWD-budget-increase http://www.gmanews.tv/story/201445/senate-scrutinizes-dswd-cash-transfer-program http://www.bworldonline.com/main/content.php?id=18067 http://www.brookings.edu/press/Books/2006/progressagainstpoverty.aspx http://news.bbc.co.uk/2/hi/programmes/crossing_continents/412802.stm http://www.bworldonline.com/main/content.php?type=5

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