Economic growth masks poverty

Halfway into his term, the president has achieved much, including the stellar economic growth that has earned the country an investment-grade credit status from Fitch Ratings.
This is why the disclosure last week by the National Statistical Coordination Board (NSCB) that the incidence of poverty has remained unchanged for the past six years was a big embarrassment to the administration.
Many believe this was the reason Economic Planning Secretary Arsenio Balisacan, who heads the NSCB, was bumped off the official delegation that flew with the president to Brunei last Wednesday for the Asean Summit.
The NSCB report said poverty incidence for the first half of 2012 was 27.9 per cent. Comparing this with the 2006 and 2009 first-semester figures of 28.8 per cent and 28.6 per cent, respectively, it said poverty remained unchanged as the computed differences were not statistically significant.
The NSCB noted that in terms of income distribution, 20 per cent of the population (or the poorest segment) accounted for only 6 per cent of the total national income, while the upper 20 per cent accounted for nearly 50 per cent.
All efforts to address poverty will be for naught if the government continues to neglect agriculture. In a paper written in November 2008, Balisacan presented facts that remain true to this day: despite the relatively rapid pace of urbanisation in the past 20 years, poverty in the Philippines is still largely a rural phenomenon. Two of every three poor persons are in rural areas and mostly dependent on agricultural employment and incomes. Poverty incidence in agricultural households is roughly thrice that in the rest of the population. While agriculture’s share in the total labour force has dropped from about half in the late 1980s to only a little more than a third by the mid-2000s, the sector continues to account for about 60 per cent of total poverty.
Last week, Balisacan was reported as saying that the visible underemployment in agriculture was a persistent problem that always came up in labour survey results.
“This means that agriculture sector workers work less than 40 hours a week, perhaps because there isn’t much demand for labour in their areas, and they are looking for additional work, possibly because the wages they receive are not enough to meet their needs. If the problem of visible underemployment in agriculture is addressed, then incomes of farmers would increase, poverty incidence would decrease, and we would not be compromising food security,” he said.
The government should convince the private sector to invest in agriculture. It can start with the coconut industry, where, according to National Anti-Poverty Commission chief Joel Rocamora, the 70-billion peso (US$1.7 billion) coconut levy fund is available to spur farmers’ production.
Also, the government can improve the agriculture sector by simply coordinating with Agriculture Secretary Proceso Alcala, who has a number of programmes and projects that need only official support to get implemented.
At a recent roundtable with the Inquirer’s business section, Alcala cited a quedan system that allows coconut farmers to take part in value-added production from coco sugar to coco biodiesel through cooperative- and joint-venture-type arrangements, and the expansion of the programme under which farmers may borrow funds using an ATM card, to cover the top 20 rice-producing areas nationwide.
In the next three years, the Aquino administration hopes to cut poverty incidence to 16.6 per cent, or half the 1991 rate of 33.1 per cent. It had better start aggressively addressing the issues stunting agriculture, otherwise, it will have no option but to again lower the poverty threshold income (or the minimum amount required to meet basic food and non-food needs) to meet its goal, as it did in 2011 when the threshold was lowered from the previous 52 to 46 pesos for every Filipino per day. Yes, this can cut the official number of poor people, but this is not what we need. We need the government to implement programmes and policies that will attack the root causes of poverty.