Launching Event of the World Bank Report
“Making Growth Work for the Poor: Philippines Poverty Assessment 2018”
Novotel Manila Araneta Center, Cubao, Quezon City
29 May 2018, 9 AM
ERNESTO M. PERNIA
Secretary of Socioeconomic Planning
First of all, I’d like to warmly congratulate the World Bank for the Report, which is a comprehensive analytical piece on the poverty situation in the Philippines over the period 2006-2015, and suggests ways of making growth work for the poor. It certainly jibes with and complements the government’s development strategy, as contained in the PDP 2017-2022, that aims for inclusive growth towards reducing overall poverty rate from 21.6 percent in 2015 to 14 percent by 2022.
To be sure, there are various ways or approaches toward effectively connecting economic growth to poverty reduction, depending on one’s perspective. And this is made evident by the Report’s litany of such ways to make growth work for the poor. One advantage of the Report is it carries the World Bank’s widely reputed gravitas vis-à-vis policymakers.
In my discussion, I shall not dwell on the riddle of why poverty has persisted for so long in this country, as this is adequately done by the Report (though some of the data used need updating or fine-tuning). I shall instead focus on what I consider to be the most crucial approaches to poverty reduction. Most of what I’ll discuss are likely to have been put forward by others, or are in the WB Report itself. I’ll point them out anyway for emphasis, or to provoke more in-depth discourse.
Important ways of making growth work for the poor
- Create gainful and stable employment, as well as entrepreneurial, opportunities targeted to the poor in the labour force who are currently employable or capable of self-employment. For those who are unemployable or incapable of entrepreneurship, training or re-training opportunities, including on financial literacy, should be made available. Importantly, employment promotion will be greatly helped if the government eases its restrictive labour laws.
- Control inflation in general but especially price increases of goods and services consumed by the poor. A case in point is the price of rice, a principal staple of the poor, owing to NFA’s monopoly power on rice imports. Rice price will be sharply reduced by replacing QRs with tariffs. Revenue from tariffs can then be used to enhance farm production through better infrastructure, and by enabling farmers to be more productive in palay or to shift to higher-value crops. Lowering the price of rice will also appreciably reduce overall Parenthetically, unemployment and inflation are invariably cited as the top twin concerns of the general public in periodic surveys of SWS and Pulse Asia.
- In general, revitalizing agriculture is crucial and long overdue as this is where the poor abound. Thus, a reawakened agriculture will greatly contribute to poverty reduction and also boost agricultural produce for the general population. In addition, the fisherfolk are among the poorest of the country’s population who need adequate basic training and health services. The country needs to harness the vast potential of the seas – our blue economy – to reap the benefits from it besides providing livelihood opportunities to the
- Investment in human capital of the youth through better quality education and health services. Education here covers basic education, including the introduction of senior high school (academic and vocational-technical tracks) and tertiary education. The CCT merits continued government support but must be better targeted and administered. There’s also a need for stronger academe-industry linkage to ensure more effective matches between school curricula and industry requirements. As well, preventive and curative health services should be made available to the poor.
- There is greater awareness now that early childhood development is pivotal for a person to be off to a good start to achieve her/his potential. Such development begins as early as a healthy and adequately nourished mother in pregnancy through child birth and post-natal care till two years of age – the critical first 1,000 days. That there’s much to be done on this score is indicated by data on stunting to the extent of around one-third of children under five years of age. This is quite disturbing and must be reversed soonest.
- Responsible Parenthood and Reproductive Health is directly related to the issue of early childhood development. The data clearly indicate that poor women have more children than they want or can adequately support, but have limited access to modern and effective contraceptives and family planning Accordingly, a vigorous and sustained implementation of the RP-RH law will reduce the likelihood of poor women having unwanted and unhealthy pregnancies leading to child stunting. (EO 12 series of 2017 aims for zero unmet need for FP.) Poor women unburdened of unwanted pregnancies and many children to care for could then participate in continuing education or short-term training, to enable them to be engaged in the labour market. Incidentally, labour force survey data show that PH female labour force participation is the lowest among its ASEAN peers. A great irony, indeed, because PH is widely known to have a high GAD index, comparable to that in developed countries.
- A related issue is teenage pregnancy that‘s still rising compared with other Asian countries. Teenage pregnancy is another recipe for continuing poverty, as pregnant teenage girls belonging to poor families almost always drop out of school, and likely deliver unhealthy babies while their own future falls by the wayside. The RP-RH law provides for sexuality education that can minimize the incidence of teenage pregnancy.
- Apart from investment in human capital, infrastructure development especially in the regions will connect lagging regions with the leading ones and the mainstream economy in general. This will improve spatial mobility, expand opportunities for employment, trade in goods and services across regions/provinces, access to centers of education and health services, and technology. Overall, infrastructure development will reduce inequality across regions/provinces and households, and enhance the economy’s growth potential for inclusive development over the long run.