Poverty still exists despite economic growth

While the government and investors alike sing praises about the substantial improvement of the country in image, economic growth and governance, more work is necessary to make these perceived benefits reach the common tao where many (and now increasing in numbers) still claim poverty and hardship.

From BusinessWorld Philippines

May 10, 2012

A discouraged nation

The number of Filipino households that consider themselves poor has risen markedly, the Social Weather Stations (SWS) said, with surges recorded in Mindanao and in rural areas. Results of an SWS poll, conducted last March 10-13, found 55% of the respondents — equivalent to an estimated 11.1 million families — claiming to bemahirap, 10 points higher than December’s 45% or 9.1 million households.

The survey also found that 45% or an estimated 9.1 million families consider themselves poor in terms of food, nine points up from the 36% or estimated 7.2 million recorded in the previous quarter.

The new levels are the highest to date for the Aquino administration, which has pledged to reduce poverty, although they are still below the record highs of 74% for self-rated poverty — hit in July 1985 during the Marcos dictatorship — and the 59% for self-rated food poverty first recorded in April 1994 during the Ramos administration and repeated in September 2002 when the Arroyo government was in power.

Satisfaction with the Aquino administration has fallen to “good” from “very good” but its score remains well above previous governments, SWS said.

The survey done from March 10-13 found 64% of the respondents satisfied and 18% dissatisfied with the government’s general performance, for a “good” net rating of +46 (% satisfied minus % dissatisfied).

The new rating is 10 points below the “very good” +56 scored in the last two quarters of 2011 and compares with the +64% — “very good” and a record high — that the Aquino administration enjoyed in its first few months in office.

Measured against previous governments extending back to the term of President Aquino’s mother, Corazon C. Aquino, the next highest would be the “good” +36 registered in November 1998 during the Estrada administration.

The SWS poll, which involved face-to-face interviews of 1,200 adults nationwide, saw the Aquino administration’s net ratings fall to “good” from “very good” in all geographical areas and socioeconomic classes except in Mindanao and among the class E.

It was hardly changed in Mindanao at +55 from +56 previously, but plunged 18 points to +46 in Metro Manila; by 13 points to +39 in Balance Luzon; and by nine points to +49 in the Visayas.

By class, satisfaction stayed “very good” in class E at +52 from +53 last December, but plunged by 16 points to +38 among the ABC class and by 13 points to +44 in class D.

Presidential Spokesperson Edwin Lacierda said the administration’s approval ratings remained high despite criticism that little was being done to address rising prices.

A little more analysis is needed, besides being more politically prudent. How explain, for example, government inaction on the economy despite the availability of hundreds of billions of approved outlays which could propel the economy?

Government has pledged to accelerate spending after missing its first-quarter target and four quarters last year, blamed for slowing down growth to 3.7%.

The Budget department said it aimed to make up for lost ground in the second quarter after government spending only hit P394.883 billion as of March, nearly P46 billion short of the P440.588-billion target. The first-quarter expenditure goal is the lowest for the year. The government aims to disburse P444.7 billion in the second quarter, P467.9 billion in the third quarter and P486.6 billion in the fourth quarter, for a 2012 total of P1.84 trillion.

The Transportation department had the biggest backlog in the first quarter, with P12.2 billion in unreleased balances. It was followed by the Agriculture and Education departments, both with P9 billion each. The Health department still has to spend P8 billion worth of budget releases, while P7.7 billion has to be spent by the Public Works department. Funds were underutilized by the Environment and Social Welfare departments. In particular, only P5.7 billion of the P39.4 billion released to the Pantawid Pamilyang Pilipino Program was used. Banner programs for rice and other farm products utilized just P800 million of a total P11.9 billion allocated. Family health care projects also utilized just P1 billion from the P2.3 billion given. Infrastructure spending was the slowest moving at 71.24% of the P54.6-billion target.

Government agencies were said to have failed to submit special budget requests and supporting documentation for projects such as the public-private partnership program (P15.6 billion), construction of basic educational facilities (P8.7 billion), and the enhancement of health facilities (P5 billion).

Sluggish project implementation raised concerns that the underspending last year would be repeated.

Government spending dropped last year as agencies adjusted to the Aquino administration’s regime of stricter budget and procurement reforms.

Subsequent project delays were said to have contributed to 2011’s lackluster 3.7% economic growth, barely half of the record 7.6% seen in 2010.

If the government were an ordinary household, it would make sense to constrict spending after prices move up. But Philippines, Inc. is not an ordinary household. Economics 101 teaches us that government spending can perk up the economy by creating jobs. Jobs provide income for food on the table. What’s left after spending for basic needs is disposable income. Optimism-driven consumer spending propels the economy upward.

A hands-on, action-driven presidency is clearly needed.

Article location : http://www.bworldonline.com/content.php?Section=Opinion&title=A discouraged nation&id=51511

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