THE Philippines may have chalked up impressive growth last year, but it was not enough to reduce poverty, Economic Planning Secretary Arsenio Balisacan admitted
The economy grew by 7.2 percent in 2013, outperforming other countries in Asia.
The failure to bring down the number of poor Filipinos prompted the government to roll out an updated Philippine Development Plan (PDP), which aims to achieve inclusive growth during the remaining term of office of President Benigno Aquino 3rd.
Balisacan, who is also the secretary general of the National Economic and Development Authority (NEDA), said the country is “on track with respect to our economic targets, particularly in achieving rapid growth.” However, he noted that such economic growth is “not sufficient for poverty reduction.”
He said it will take decades to root out poverty in the country.
Balisacan said bringing the poverty level down to 16.6 percent from 25.2 percent in 2012 is “an even bigger challenge” than lowering the level of unemployment and underemployment.
“There is no country in the world in the history of nations that has reduced poverty significantly and over time without sustained economic growth. What we want to do and what we are proposing to achieve here is to ensure that the rapid economic growth that we have been achieving will redound to quicker and faster poverty reduction,” he told reporters.
Balisacan’s admission came following a study by the Philippine Institute for Development Studies (PIDS), which showed that the Philippines will not attain its Millennium Development Goal target to reduce poverty by 2015.
Roehlano Briones, PIDS research fellow, said poverty incidence may decline by 3.3 percentage points in 2015, which is “far below” the MDG target of 8.6 percentage points.
“Poverty will be lower by 7.8 percent by 2025. What will be attained, but only by 2025, is a 2.7 percentage point reduction in extreme poverty, sufficient to attain half of the 1991 level,” Briones said in his study.
Balisacan admitted that the poorest families, especially in the provinces, have been left behind.
“Some cities or provinces have been experiencing economic growth, but the poorest families are being left behind perhaps because the growing sectors do not require the goods or services that the poor can provide. Worse, migrants are being attracted into these cities or provinces, but they too, are unable to participate in the growth process,” he said.
According to him, the key to reducing poverty “is to directly address the constraints faced by the poor, set against a backdrop of rapid and sustained growth.”
This would entail skills training of people from low-income households in poor provinces so they can take advantage of employment opportunities.
“We need to improve the skill sets of these poorest families, undertake more aggressive employment facilitation for better job-skills match especially concerning the poor,” Balisacan said.
These strategies will require a “narrow targeting” where the beneficiary should be “known by name,” he said.
The government, he said, will make use of the data from the National Household Targeting System which identifies the poor households in these provinces.
Balisacan explained that under the new development plan, success will not be gauged based on income.
“Multidimensional poverty incidence, unlike income poverty, looks at deprivation in various dimensions—health, education, access to water, sanitation, secure housing, etc.
This indicator can then track the supposed outcomes of the different human development strategies, which impact on future income poverty,” he explained.
Under the new development plan, accomplishments will be measured in terms of economic growth, to an average of 7 percent to 8 percent until 2016, reduction in unemployment to 6.5 percent to 6.7 percent in 2016 and the incidence of income poverty to 18 percent to 20 percent.
“We are committed to quality of life targets: raise the quality of employment and overall quality of life. The former will be reflected as a reduction of underemployment to about 17 percent in 2016 and the latter, as a reduction of the incidence of poverty in its multidimensional features to 16 [percent]to 18 percent,” Balisacan added.
He stressed the need to raise productivity and sustain growth in the agriculture, industry and service sectors.
“Investing in research and development is crucial in this respect. Emphasis will be given towards income diversification and agriculture and industry linkages,” Balisacan said.
“Accelerating job creation requires building up of capital.
Investments must continually rise for the economy to continue to grow and this requires a stable and predictable market environment. Thus, we should maintain positive expectations of consumer and business sectors through macroeconomic stability, a strong financial system, and a healthy external sector,” Balisacan said.
He added that government will continue to give priority to reducing the cost of doing business in the country to encourage more investments.
“This requires addressing infrastructure bottlenecks, improving connectivity and increasing the availability of highly trainable and skilled labor,” he said.
But Balisacan pointed out that overall development is “ultimately a product of the dynamism of the private sector.”
“The role of government is to set the necessary policy and regulatory framework and provide public goods and services to catalyze private initiative and encourage efficiency improvements,” he said.
“The government will intervene strategically where the private sector cannot be relied upon to deliver the goods, services and facilities needed by the poor and marginalized,” Balisacan added.
Meanwhile, Balisacan said the government will augment the budget for the conditional transfer program (CCT), which is implemented across the country to lift more households out of poverty.
Under the CCT, the government grants cash subsidies to the poorest households.
Household beneficiaries are required to send their children to public schools in exchange for cash.