4 million families own nothing. Top 40 own everything. And no one gives a sh.t

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Marlen V. Ronquillo

Marlen V. Ronquillo

MAKE a simple calculation. Get the total wealth of the Top 40 Filipino families, the dollar billionaires and dollar multi-millionaires tracked yearly by Forbes magazine. Then get a ballpark figure of the worth of the 4 million families that live in abject poverty, the kind of families that either sell their daughters to pedophiles or kill them when they are young to lessen the burden of feeding too many kids.

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How vast would be the divide after making the comparison? The answer would make you tear up or tear your hair in frustration.

Our saddest fact of life is this: the richest family is worth $11 billion or more. The poorest 4 million families own practically nothing of value except, perhaps, if they sell their body organs to rich seekers of eyes, kidneys, livers, etc.

Critiquing the country from the context of the great divide, and not on GDP growth, would send one to utter desperation. And that all the press releases about being the star performer in the region really amount to nothing once inclusive growth is factored into the growth equation. We are reminded of what Robert Kennedy said after a tour of the poverty-riven Appalachians: impressive growth rates were irrelevant to these wasted lives.

What is worse than the Great Divide? It is the fact that nobody in the leadership has been paying attention to it. We live in a kind of bubble.

For as long as the growth stats are impressive, for as long as the multilateral institutions and the credit raters are giving us the stamp of good economic behavior, everything is fine and dandy. Between easing poverty and getting the nod of Standard and Poor’s, what do you think is the higher official preoccupation?

The poor who lives on less than $2 a day? Who cares about the dregs, Fanon’s Wretched of the Earth?

In most democratic societies, inequality is the greatest worry. When it is discussed, every other issue takes second fiddle. Winners of economic Nobels take up the issue with utmost seriousness and take sides. The progressives argue for redistribution and propping up of the social safety nets. The conservatives argue for minimum government intervention on the assumption that by just empowering the job creators (the rich and super rich) through tax cuts and regulatory laxity, there would be a trickle-down economic bonanza to those at the bottom of the pile.

The defining challenge of our time
The most serious policy debates are those focused on inequality.

The president, or leader of the nation, then makes a speech about correcting the great divide. Just what President Obama did a few days ago, in a speech on correcting the great inequality that was called his greatest economic speech ever. How did Obama describe the problem of inequality? He called it “ the defining challenge of our time.”

In our own sad country, attention to easing the great divide is perfunctory, if not cynical. What are proofs of this policy cynicism?

President Aquino, remember, started his term in mid-2010 with his view of the great leveler. It was about his big decision not to use the wang wang. That no one should invoke authority when it comes to waiting out traffic jams. Even the president should get stuck in monstrous jams.
It was great symbolism of egalitarianism, at least from the view of the middle-class and the car-riding members of the media.

But as we all know, this great symbolism will not impact on bridging the rich-poor chasm and lift the poor out of their unbridled poverty. The poor will never own any mode of transport in their lifetime except for hand-me-down bicycles. According to a report in The Manila Times, the 3.8 million poor families in 2006 rose to 4.2 million families in 2012. The wang wang spiel, the great leveler from the view of the middle class, did nothing to ease mass poverty.

The P40 billion or so conditional cash transfer (CCT) program helps the poor meet their basic needs but given the nature of the poor’s spending habits, the likes of tobacco and liquor are preferred. The CCT, at best, boosts overall demand and expands the market for consumer goods. The principal beneficiaries, in the final analysis, are the manufacturers that cater to the habits of the poor, the cigarette and liquor companies, those that make coffee and cooking oil. And Vietnamese farmers that supply us with rice. The noble purpose of the CCT, to ease the dropout rate and place the children of the poor into the educational mainstream, has miserably failed.

While the school dropout rate has been unmoved and 80 percent of the poor families that enter elementary school do not even reach college, the sons and daughters of the liquor and cigarette manufacturers go to Yale or Princeton after their high school (at the elite international schools) in Manila. Going to the top universities here is not even an option.

The consolidation in the banking sector and the closure of so many rural and coop banks (based on the too-big-to-fail and too-small-to-succeed monetary policy) has shut off the rural poor and the peasantry from formal credit. The agenda to foster stability in the banking system, while laudable, has the unintended effect of depriving the poor and the peasantry of production loans and micro financing.

The most potent and the most cost-efficient antidote to poverty (which has a rural, agrarian face) is to allocate a jumbo fund for agricultural research and development. An energized R and D would develop rice that would grow prodigiously in the uplands, vegetables that would thrive during the rainy season, poultry that would mock the Newcastle infestation. These in turn would be life-changing events in the rural areas.

And what is the budget for agri R and D? The answer is . . . Peanuts.

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10 Comments

  1. D na maalis sa atin may mahirap at mayaman, dapat ang govt dpat equal ang tingin sa lhat ng pilipino

  2. kaya nga magtataas ng singil ng kuryente thru meralco ang mga me ari ng power srctor tilad nila ayala, dy, tan, pangilinan, etc kailangan nila ng puhunan ulit sa PPP ni pnoy

  3. The conditional cash transfer of P500 is worth only P440 right away coz it is eaten by the 12% VAT. Even in charitable acts the government is actually getting a tax of 12% VAT from the mouth of the poorest of the poor. Mr. Ronquillo please emphasize in your column that the actual cause of hardship of the poor and lower middle class is price increase and taxes/fees without corresponding increase in salaries/income. Very, very few people know the tax components of gasoline and diesel is 38% meaning everytime the prices of oil products increase the government pockets 38% of the increase that is why no sitting President ever complained of oil/gas increases. So with 12% VAT everytime prices of ordinary commodities increase, 12% of the increase goes to the pocket of the sitting President.

  4. This could be the start of a long set of articles. What can we do about it? There must be a middle way somehow. We could start with banks. We shouldn’t be aping whatever the West says because they themselves are clueless eg 2008 crises and the 2012 EU crisis. More money into R & D that is useful to our level of development? More money to be lent out eg micro-lending? I would suggest – build more raods in the provinces and put somebody in charge of the infrastructure building. Smaller dams? Micro-power staions powered by the sun/wind whatever… More EPZ to get the much needed dollars. Use some of our reserves on the stock market or investment vehicles that will make money faster. The profit will take care of paying the interest on our loans. I mean there must some other way to get of this cycle of poverty if only we use our imagination and creativity.

    • resurrect the bayanihan spirit in the form of cooperatives.

      instead of letting the rich make money through fractional reserves banking, get your savings out from your bank, create/join cooperatives in the rural areas. let the money flow into the agricultural activities, microfinancing, small cooperative-owned bakeries, barber shops, rice mills, agri-products stores…

      the “profit” made by lending the funds or thru retail will always go back to you and to the members/share holders in the form of yearly/quarterly dividends.

      the cooperatives can also lower their markups on supplies, services, loans(interests) so that all members will be encouraged to use the cooperatives’ services instead of going to the bank or loan sharks.

      money management is taught to kids in wealthy families, why not teach them through the cooperative’s seminars before joining?

      they can also limit the amount of shares anybody can acquire to ensure that the cooperative grows with the community in a manner that is equally beneficial to every member.

      imagine how it can lower the price of commodities with community gorcery stores, community rice depots…

      but we have to be agressively vigilant and defend the cooperative law.
      the cooperative law states that cooperatives with less than 30M capital will never be taxed. so one community can build several cooperatives in the same community. one for microfinance, one for the bakery, one for the agri-supplies…

      so our money will build our community without too much taxation since only incomes are taxed. if a cooperative will not give salary to volunteer workers but just living allowance, then it is also not taxable.

      the rich middleman traders won’t like this and will use their guns, goons and gold to bend the law. so we have to be vigilant.

      it would be easier but much complicated to start everywhere all at once. all communities will build cooperatives at the same time. i’m just waiting for Android phones to reach everybody with a sim card so we can create smart apps to help us orchestrate/monitor this quantum leap anywhere. it should be transparent, decentralized and dynamic.

      i’m just a visionary. i don’t have talent in execution. i hope i could meet people who will help me make this happen in the next 10-20 years.

      fear in the marcos era forced us to mind our own business and forget about the bayanihan spirit. courage and nationalism will keep it alive.

      our government is a house of wood, teeming with termite taxmen and fat crocs. one more Yolanda and one more 60-30-10 elections will surely make it collapse.

      let us quietly go out and help each other build the tents made of cooperatives before the house collapse. i just hope we won’t build another house of wood after its fall.

      same structure=same functions.

      if you’re interested, in my ideas and you feel that we can make this happen in 10-40 years, feel free to get in touch with me and i will reluctantly move my lazy ass to share my vision with you.

      through my mother’s pioneering leadership, i’ve witnessed how whe built the cabuyao market vendor’s multi-purpose cooperative. i have lots of ideas how to recreate it and improve it. all you need is altruism and emphaty, nationalism and of course, the bayanihan spirit.

      we are all good pinoys with big and lazy butts that are hard to get rolling. but once they gain momentum, they are equally hard to stop.

  5. It makes you weep. Democracy, Market economy does not change the underlying feudalistic system which has been in place for 450 years. Power is concentrated on the top elite. Can we change it ? Yes and No. We can change only when the powers that be agree that it is to their best interest to make the Pie bigger by sharing some of the wealth to make more wealth eg Japan. No, when we have the likes of Aquino et.al who have know imagination and patience to actually put forth a better deal. It can actually be done. But first things first, we have to get the “Kano” to play along.

  6. The main problem here, those figures aren’t figure out the reality. Thus, we cannot compare values from abstract matters. Just like probabilities and no concrete relation on the subject and the values. Thus, we cannot define accurately the difference between the poor and the rich. GDP does not exist in reality, they are abstract in nature and no direct relation to the reality. And all we know there are many poor beyond estimates even our naked eyes are witness to that. Rich people happen when they do not share and keep all the loot for themselves, poor people happen when they own nothing. Its a matter of sharing. And what do we share? Of course the treasure from our country. Greed does not exist in figures, and therefore does not satisfy the equation of sharing. What happens if there is a greed values in elements? There would be no H20 or C02..same thing with humanity. The result is declining human values, thus corrupt matters happen, killing, stealing, a brutal deviation of morality. Can we blame those people? It’s a matter of unexpected predator and prey in the illusion of GDP fundamentalist.

  7. Artemio Layug, i would like to see you live on the wages of the poor & then tell me how exciting & pleased you are that the gini measurement is so kind to you. I dont like the way the government looks to find work abroad for the filipino. Why not help to create that work in the philippines so they can live a family life with their families. What i do hate so much about the ofw situation is so many families who get an allowance from ofw’s can & do become so lazy & wont work. I see it in my subdivision every day. I know if i were an ofw i wouldnt be sending moneyu to people who drink my money every night & who wont even look for work. They would find the harsh realities of life they would have to man up. I grew up knowing when i left school i had to work, here there are millions that wont work because they are supported by ofws.

  8. florentino maddara on

    Masyadong greedy kasi ang mga capitalists at ang gobyerno mas prioirity nila ang image nila kaya ganyan ang situasyon ngayon sa bansa natin. Look at the rich nations of europe their gov are not just honest but they love their people so well that they do everything just to serve them in the most ideal manner, kaya most of the people are happy.

  9. FYI, there is actually a number that measures the income inequality, it is called the
    the Gini coeffecient, the higher the Gini, the more unequal the society. The US has a Gini of 45%, China, 47% And the Philippines 43%. Japan has 38% and Afghanistan has 27%. Putting these numbers in perspective one can say that the higher number is probably due to the rich getting more richer especially if one looks at a country like Afghanistan’s where income has stagnated due to the war.

    Another FYI, ‘ Scientists from Japan and the International Rice Research Institute (IRRI) have discovered a rice gene that in preliminary testing increased production by 13–36% in modern long-grain indica rice varieties—the world’s most widely grown types of rice’