by:Perpecto Yasay
The Causes of Poverty
We all know that our land is profuse with natural resources. A good number of our country’s tycoons and privileged families figure as among the wealthiest in the world, but we have not been able to harness this richness or curtail the growing poverty among our people mainly because of serious inequitable distribution or sharing of the nation’s income, wealth and resources; incessant conflicts, high population growth rate and systemic corruption.
1. Inequitable Distribution of Wealth and Resources
Since the time we were released from the shackles of our Spanish colonizers, our country’s resources remained in the hands of a select few. Roughly, less than 10% of the population controls 90% of the country’s wealth. While more than 90% of the population grapples with the remaining 10% of such wealth.
When the Americans arrived, they introduced their brand of political rights and freedom to the native inhabitants, but they deliberately ignored the democratization of capital assets and opportunities, which were vital to the welfare of the people and necessary for democracy to flourish. What was expedient then was controlling the entire archipelago by feeding on the avarice and excesses of the ruling elite class that wielded a gripping influence upon the masses.
Despite economic and agrarian reforms that were instituted, this inequitable condition was never dismantled. In fact, the monopolies and structures of privilege were aggravated under the Marcos regime. While President Cory Aquino restored our democratic institutions that were dormant during martial rule, she failed to break the monopolistic structure of the economy that had long existed in the hands of the business elite and which was given a much bigger boost under her administration.
The Comprehensive Agrarian Reform Program or CARP was one of the urgent measures that we adopted to ensure the fair and impartial distribution of land. It was our response to the growing agrarian unrest that was exploited by leftist elements.
The objective of land reform was to give land to our landless farmers to trigger their economic growth and promote agricultural productivity among the poorest sector of our population. However, after more than 20 years since the law was passed, it is clear that CARP has failed to work. Our land tillers are still struggling poor and they remain as subsistence farmers instead of becoming net exporters of food and other agricultural products. Now we are realizing that we cannot succeed in our land reform objectives if we merely subdivide landed estates into small components that work against the economies of scales without providing our farmers access to credits to purchase farm supplies, implements and equipments, technological know-how and new methods aimed at bountiful harvests from the soil.
Any land reform program will fail unless mutuality, cooperation and a hearty symbiosis between the farmers and the industrial and financial sectors including the government exist. This is what essentially marked the resounding successes of the land reform programs of China, Vietnam, Taiwan, Japan and Korea.
Sadly, much of the agrarian lands that were distributed to poor farmers who could not afford the rising cost of pursuing their trade without adequate access to credit and support from government are bought back by their former oligarch owners or by unscrupulous land developers and covetous speculators at a shamefully low price and converted into highly valuable commercial lands thereby, perpetuating the injustice sought to be rectified by CARP.
The Philippines also exhibits a highly unfair distribution of income. Data in 2003 show that the share of income accruing to the richest 10% of the population is more than 20 times the share of the poorest 20%. The combined income of the richest 1% of the population composed of about 150,000 families is equivalent to those of the bottom 38% comprising more than 6 million families and the growth of the economy only benefits a very limited few.
The harsh effects of economic injustice can however also be softened and addressed through equitable taxation.
Only a few days ago, an interesting article was circulated through the internet showing that not even the wealthiest of our people who rank amongst the richest of the world figure in the top 200 taxpayers of the country.
During the Ramos administration, we were able to increase the tax collection rate from 12% to 17%, and thereby balanced our budget. An increase of a percentage in our tax collection efforts translates into hundreds of billions of pesos.
Tax collection rate under the Arroyo administration fell back to a low of 12%, and with her national budget reaching PhP1.2 trillion. One can just imagine how much deficit her government incurred, which in November 2009 reached PhP272 billion – the highest ever incurred by the Philippine Government. This necessitated further borrowing from abroad, which will not be paid unless a surplus in our tax collection effort results or government spending is reduced to below budget.
The truth is that if we could only increase our tax collection rate to 20 or 25%, by minimizing corruption, which will still be below the norm for efficient tax collection, government will be awash with cash to meet its operational expenses, service our foreign debt with still enough remaining to adequately provide for the basic needs of our people towards eradicating poverty and investing in human capital. But instead of doing so, government chose to exacerbate the sufferings of the poor by burdening them with E-VAT and other taxes, which are passed on to consumers, instead of collecting the proper taxes from the rich and privileged.
2. Causality Between Conflict and Poverty
The causal relationship between conflict and poverty appears to be bi-directional. This means that conflict causes poverty and poverty stimulates conflict. This is especially true in war-torn Mindanao where poverty is directly related to violent conflicts and warlordism. The memory of the brutal massacre of 63 innocent lives in Maguindanao still lingers. What is clear is that this shameful incident was not isolated or random, but was the inevitable bloody outcome of the rivalry between powerful and well-armed kinfolks competing for power and authority and encouraged and tolerated by corrupt elements in the national leadership for political expediency and contingency.
Mindanao is the second largest island of the Philippines comprising 94,630 square kilometers with 20 million inhabitants or about 23% of the country’s population. It is blessed with diverse and rich mineral and forest reserves and its promise for agricultural and fishery resource and development is immense.
Years of governmental neglect and incompetence in handling the Muslim insurgency has contributed largely to the underdevelopment and poverty especially in the conflict affected areas of Autonomous Region in Muslim Mindanao (ARMM).
Indeed, Muslim Mindanao is a restive social volcano waiting to erupt with such tremendous and violent force that will result in the fragmentizing of the nation, unless sincerity, honesty and good faith supplants the deception, treachery and mistrust that have impeded the efforts towards a peaceful resolution of the conflict. We do not even need foreign elements interfering in this domestic problem. Their self- serving interests will only worsen an already complex situation and will make resolving the issues more intricate.
3. Unabated Population Growth
The increase in the number of poor families has been attributed to the high population growth rate. As concluded in a World Bank report and concurred by many economists familiar with the Philippine situation, the country’s population growth rate, which is one of the highest, is a major cause of poverty, particularly in rural areas. In turn, this alarming condition has been a serious drain to the limited resources of government which has been stymied in providing for the minimum basic needs of our people.
Our rapid population growth rate of 2.36% frustrates the country’s effort to improve the economy, create adequate employment opportunities and provide quality services. At our rate of population growth, which by 2015 will reach way over 100 million, it would be difficult to accommodate all new entrants to the labor force even if economic growth were accelerated. A rapid growing population makes it hard for government to keep up with delivery of what are already deficient public services in health, food, shelter, education, water supply sanitation, and so on.
In the area of primary and secondary education alone, which is given free to our children, only 2.5% of our GDP is budgeted for education, where the minimum standard set by UNESCO is 6%. And yet the Philippines committed meeting 100 percent primary education to all Filipino children by 2015 as part of its Millennium Development Goals.
Many of the children who enroll in primary or secondary education do not complete the school year, and about only 60 of every 100 who register in Grade 1 are able to graduate from elementary. For the Secondary level, only around 65 out of 100 who enter first year high school complete their studies. If all children that complete elementary education will proceed to the secondary level, less than 50% will end up graduating from high school. The reason for this very low cohort survival rate is that poor families could not afford the other essential expenses associated with schooling, which among other things, are food, clothing, transportation, and medical treatment whenever their kids get sick.
Experts agree that “the key to breaking out of inherited poverty is education, and yet we have shamefully neglected providing full support for universal basic education and tools for self-help and learning.”
Only last year, former President Fidel V. Ramos lamented that “despite that the population growth factor is so crucial to human development, the ambiguousness of PGMA’s government policies have put mother’s lives and health, together with their babies at risk for the sake of political expediency”.
He stressed that for every peso spent in family planning, about PhP100 is saved in maternal care costs for unintended pregnancies or a total of about PhP5.5 billion in health care management for unintended pregnancies and complications.
Sadly, the implementation of vital government-sponsored family planning programs has been prevented by stiff opposition from the Roman Catholic Church, without providing for any viable alternative solution. It rejects all forms of modern birth control methods and admonishes the faithful to utilize only natural family planning devices, which it considers sufficient in preventing unwanted pregnancies.
In 1999, when the first comprehensive version of the Reproductive Rights bill was filed in the 11th Congress, which the Roman Catholic Church vigorously fought, our population stood at 75 million. And yet, today we hold the dubious distinction of being the 12th most populous country in the world with 94.3 million people.
But more than just the cold increase in the number of our people, their quality of life has deteriorated. Opportunities have been lost, growth have stagnated, hopes have been shattered, sufferings heightened and lives have been lost.
How have we measured up with the problem and issues involving population growth? If our ecclesiastic mission is the saving of souls, could we as a Church in fulfilling our prophetic ministry ignore the imperative of saving human lives and alleviate the unbearable conditions under which people exist?
The harsh effects of economic injustice can however also be softened and addressed through equitable taxation.
Only a few days ago, an interesting article was circulated through the internet showing that not even the wealthiest of our people who rank amongst the richest of the world figure in the top 200 taxpayers of the country.
During the Ramos administration, we were able to increase the tax collection rate from 12% to 17%, and thereby balanced our budget. An increase of a percentage in our tax collection efforts translates into hundreds of billions of pesos.
Tax collection rate under the Arroyo administration fell back to a low of 12%, and with her national budget reaching PhP1.2 trillion. One can just imagine how much deficit her government incurred, which in November 2009 reached PhP272 billion – the highest ever incurred by the Philippine Government. This necessitated further borrowing from abroad, which will not be paid unless a surplus in our tax collection effort results or government spending is reduced to below budget.
The truth is that if we could only increase our tax collection rate to 20 or 25%, by minimizing corruption, which will still be below the norm for efficient tax collection, government will be awash with cash to meet its operational expenses, service our foreign debt with still enough remaining to adequately provide for the basic needs of our people towards eradicating poverty and investing in human capital. But instead of doing so, government chose to exacerbate the sufferings of the poor by burdening them with E-VAT and other taxes, which are passed on to consumers, instead of collecting the proper taxes from the rich and privileged.
2. Causality Between Conflict and Poverty
The causal relationship between conflict and poverty appears to be bi-directional. This means that conflict causes poverty and poverty stimulates conflict. This is especially true in war-torn Mindanao where poverty is directly related to violent conflicts and warlordism. The memory of the brutal massacre of 63 innocent lives in Maguindanao still lingers. What is clear is that this shameful incident was not isolated or random, but was the inevitable bloody outcome of the rivalry between powerful and well-armed kinfolks competing for power and authority and encouraged and tolerated by corrupt elements in the national leadership for political expediency and contingency.
Mindanao is the second largest island of the Philippines comprising 94,630 square kilometers with 20 million inhabitants or about 23% of the country’s population. It is blessed with diverse and rich mineral and forest reserves and its promise for agricultural and fishery resource and development is immense.
Years of governmental neglect and incompetence in handling the Muslim insurgency has contributed largely to the underdevelopment and poverty especially in the conflict affected areas of Autonomous Region in Muslim Mindanao (ARMM).
Indeed, Muslim Mindanao is a restive social volcano waiting to erupt with such tremendous and violent force that will result in the fragmentizing of the nation, unless sincerity, honesty and good faith supplants the deception, treachery and mistrust that have impeded the efforts towards a peaceful resolution of the conflict. We do not even need foreign elements interfering in this domestic problem. Their self- serving interests will only worsen an already complex situation and will make resolving the issues more intricate.
3. Unabated Population Growth
The increase in the number of poor families has been attributed to the high population growth rate. As concluded in a World Bank report and concurred by many economists familiar with the Philippine situation, the country’s population growth rate, which is one of the highest, is a major cause of poverty, particularly in rural areas. In turn, this alarming condition has been a serious drain to the limited resources of government which has been stymied in providing for the minimum basic needs of our people.
Our rapid population growth rate of 2.36% frustrates the country’s effort to improve the economy, create adequate employment opportunities and provide quality services. At our rate of population growth, which by 2015 will reach way over 100 million, it would be difficult to accommodate all new entrants to the labor force even if economic growth were accelerated. A rapid growing population makes it hard for government to keep up with delivery of what are already deficient public services in health, food, shelter, education, water supply sanitation, and so on.
In the area of primary and secondary education alone, which is given free to our children, only 2.5% of our GDP is budgeted for education, where the minimum standard set by UNESCO is 6%. And yet the Philippines committed meeting 100 percent primary education to all Filipino children by 2015 as part of its Millennium Development Goals.
Many of the children who enroll in primary or secondary education do not complete the school year, and about only 60 of every 100 who register in Grade 1 are able to graduate from elementary. For the Secondary level, only around 65 out of 100 who enter first year high school complete their studies. If all children that complete elementary education will proceed to the secondary level, less than 50% will end up graduating from high school. The reason for this very low cohort survival rate is that poor families could not afford the other essential expenses associated with schooling, which among other things, are food, clothing, transportation, and medical treatment whenever their kids get sick.
Experts agree that “the key to breaking out of inherited poverty is education, and yet we have shamefully neglected providing full support for universal basic education and tools for self-help and learning.”
Only last year, former President Fidel V. Ramos lamented that “despite that the population growth factor is so crucial to human development, the ambiguousness of PGMA’s government policies have put mother’s lives and health, together with their babies at risk for the sake of political expediency”.
He stressed that for every peso spent in family planning, about PhP100 is saved in maternal care costs for unintended pregnancies or a total of about PhP5.5 billion in health care management for unintended pregnancies and complications.
Sadly, the implementation of vital government-sponsored family planning programs has been prevented by stiff opposition from the Roman Catholic Church, without providing for any viable alternative solution. It rejects all forms of modern birth control methods and admonishes the faithful to utilize only natural family planning devices, which it considers sufficient in preventing unwanted pregnancies.
In 1999, when the first comprehensive version of the Reproductive Rights bill was filed in the 11th Congress, which the Roman Catholic Church vigorously fought, our population stood at 75 million. And yet, today we hold the dubious distinction of being the 12th most populous country in the world with 94.3 million people.
But more than just the cold increase in the number of our people, their quality of life has deteriorated. Opportunities have been lost, growth have stagnated, hopes have been shattered, sufferings heightened and lives have been lost.
How have we measured up with the problem and issues involving population growth? If our ecclesiastic mission is the saving of souls, could we as a Church in fulfilling our prophetic ministry ignore the imperative of saving human lives and alleviate the unbearable conditions under which people exist?
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