Php 70.00 Vol. 45 No. 5 • MAY 2011 - IMPACT Magazine Online!

COVER
STORY
COVER
STORY
Who feels better now
after a year of Aquino
economy?
The path to successful implementation of programs is riddled with
potholes of bureaucratic corruption opportunities. And CCTs are not
development programs; they cannot substitute for comprehensive
development and poverty reduction strategies.
By Charles Avila
Do you feel better now
than almost a year ago
when a new President
took the reins of power in seeming
simplicity and egalitarian resoluteness?
Didn’t you welcome
him as a President of hope and
the straight path, a President of
militancy against corruption with
the corrective bias for the poor?
Well, he can’t believe that some
of you actually think you are
worse off now than before, and
that you now feel hungrier and
poorer than when he first started
his watch; did you really think so?
Is that what you told the social
weather monitors and economic
pulse-takers? His near free-fall
in popularity is unbelievable, he
understandably thinks, and all of
that, he suspects, must be due to
active foes.
High Growth Rates?
Didn’t the Philippine GDP
grow 7.3% in 2010 spurred by
election-related spending and a
rebound in exports and investments?
Due to large money infusions
from millions of overseas
Filipino workers, and a growing
business process outsourcing industry
(the call centers), and also
on account of minimal exposure
to troubled international securities,
as well as lower dependence
on exports, the Philippines did
weather the 2008-09 global recession
better than her regional
peers.
Economic growth averaged
4.5% during the previous administration.
Despite this growth,
however, poverty worsened. In
fact, Philippine poverty has been
continuously worsening in recent
years. The 2009 official estimates
of the National Statistical Coordination
Board (NSCB) put the
poverty headcount ratio at 26.5
percent, higher than that of 2006
(26.4%), and 2003 (24.9%). Will
the trend be different in the PNoy
economy?
This rise in the poverty rate,
particularly between 2003 and
2006, was due both to lack of real
growth and to worsening income
distribution. Everybody knows
that what matters in poverty
reduction is not just economic
growth but the nature of expansion
that takes place. Not just
growth but an effective redistributive
effort is necessary. For in-
stance, as we will further discuss
later: increasing rural incomes
by improving nonfarm income
opportunities is key to reducing
poverty in the rural areas, which
is where the highest incidence of
poverty is―ironically under three
hundred twenty-five million coconut
trees bearing fifteen billion
coconut fruits yearly, producing
so much wealth for a few companies
and so much poverty for
small holders nationwide.
To weather the effects of
economic shocks, families need
safety nets like health and crop
insurance that will help the poor
among them from falling deeper
into the poverty trap and the
non-poor into becoming multidimensionally
poor in times of
crises. In the coconut industry
that has more than 20 million
Filipinos dependent on it for
their livelihood, a typical small
coconut farmer must be guided
from a single income lane along
the production of copra into many
other income streams to double,
triple or even quintuple his net
income.
These income streams include
the production of fiber and
cream and coconut water and so
many other things now in great
demand due to the natural superiority
of the coconut itself, which
we so easily grow in our lands
but which cannot be produced
in other countries that have such
great demand for them—as, for
example, for coconut sugar from
sap that diabetics would rather
have than synthetic substitutes,
for monolaurin and mediumchain
triglycerides that all the
hospitals of the world clamor
for, for roofing mats and organic
fertilizer from leaves, for antierosion
mats from fiber, for flour,
virgin coconut oil, and milk from
fresh coconut, aside from the traditional
huge demand for refined
edible oil, soaps and detergents,
animal feed and bio-diesel.
Indeed, the coco-agro-industrialization
of the majority
provinces of our country is a
hoarse cry whose urgency cannot
be ignored except by those
who don’t understand the natural
competitive advantage gifted by
Providence to this archipelago.
Do the PNoy economists know
this?
Could not a PNoy economy
allow at last the immediate utilization
of billions of pesos of
coco-levy-based San Miguel Corporation
annual dividends for just
such a purpose and for the implementation,
finally, of modern
coco-based farming systems that
will utilize 80% more of about 4
million hectares of coconut lands
and make them bloom with intercrops
from cereals, legumes, root
crops, fruit crops and vegetables,
even to tree crops and livestock
production? All these, after all,
were the original purposes of the
levy before they got hijacked by
a few guys for their own narrow
interests.
The Precise Nature of Philippine
Poverty
The PNoy economists may
not realize it but Philippine poverty
is mainly rural poverty and
rural poverty is in great part
the poverty of the small coconut
farmer. If they could only
scientifically, strategically and
systematically target this specific
sector of the national economy,
they could then eliminate the
problem of Philippine poverty
by some 70%.
It is easy to have a false
sense of security when one sees
how even during the slow season,
as in the first two months
of this year, money sent home
by Filipinos living and working
overseas, grew 6.9% from a year
ago to $3 billion, notwithstanding
the ongoing crises in the Middle
East, North Africa and Japan.
Remember that aside from Japan,
Saudi Arabia and the United Arab
Emirates, other main sources of
remittances are the US, Canada,
Singapore and Italy. The demand
for Filipinos abroad as
well as the existence of easy and
cheap money transfer schemes
continues to boost remittance
inflows—given beforehand the
fact of rural poverty that pushes
our people out of our shores into
becoming the ‘remittance heroes’
they are abroad. For, indeed, it
takes heroic guts to brave the
dangers of wars and natural disasters
just to make a few more
bucks to send to loved ones at
home. This year, remittances are
expected to grow by 8% from
the record $18.8 billion in 2010.
Remittances affect the country's
© Roy Lagarde / CBCP Media
16 IMPACT • May 2011
Volume 45 • Number 5 17