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By Darwin G. Amojelar And Katrina
Mennen A. Valdez, Reporters
The Philippines is lagging behind
its Asian peers on spending for social protection to reduce poverty,
according to an Asian Development Bank (ADB) study released
Wednesday.
In its Social Protection Index
ranking, the Manila-based lender said the Philippines ranked
“below average” with an index score of 0.21. The index ranges
from zero to 1.
The bank said the country has
done “little in the way of major pro-poor targeted programs,”
and has a social-insurance system only for the formal sector.
Japan was rated highest with an
index of 0.96, followed by South Korea with 0.76. Papua New Guinea
was at the bottom with a Social Protection Index of zero.
“Even though Japan and South
Korea topped the list, countries [that are] considered relatively
wealthy didn’t always score higher than poorer neighbors,” ADB
reported.
While India and Pakistan have
similar levels of per capita gross domestic product, they posted
contrasting scores. India had an index of 0.46, Pakistan 0.07.
The bank said the index provides
a combined measurement of the extent to which Asian and Pacific
countries provide welfare, labor market, social security, health
insurance, micro-credit, child protection, targeted education and
health-support programs to their citizens, especially those living
below the poverty line.
The Social Protection Index will
give governments and international agencies a new tool to assess and
compare the social-protection efforts of countries throughout Asia
and the Pacific region.
“While social protection is
growing in importance in the fight against poverty and in meeting
the Millennium Development Goals, there have been very few attempts
to systematically quantify the overall impact of social protection
activities in terms of expenditure, beneficiaries or the impact of
the programs,” the bank said.
Wage hike impact
A possible wage increase is seen
to further shrink the formal sector, the Employers Confederation of
the Philippines said also on Wednesday.
On the sidelines of the 29th
National Conference of Employers, confederation President Sergio
Ortiz-Luis raised fears that the likely wage hike will only bloat
the informal sector. The expansion, he said, will lead to the
shutdown of legitimate sectors.
“Wage increase only creates a
lot of poverty, since many companies are poised to close down, once
the minimum wage goes up,” Ortiz-Luis added.
He said only 16 percent of the
total workforce are set to benefit from the wage increase, while the
remaining 84 percent will likely lose their jobs through
retrenchments. “Though [we] are willing to increase the wage once
[it has been] determined by the wage boards, a series of
retrenchments and [closures] of companies should likewise be
expected,” Ortiz-Luis added.
Six years ago, he said, the total
workforce of the formal sector stood at six million. But when a wage
increase was implemented in 2003, Ortiz-Luis added, the number went
down to 4.7 million. “While the informal sector grew from 21
million workers to 27 million, that is how the wage increase works
in this country,” he said.
Ortiz-Luis added that local firms
are more inclined to increasing or improving non-wage benefits such
as higher tax exemption for minimum-wage earners that translates to
P33 savings a day. Other non-wage benefits include condonation of
loans.
“Employers actually pay a total
of P4.25 a day, benefits included. It is not as if [we] only pay the
workers the P362 minimum wage,” he said.
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