Poverty worsens despite economic growth

Malaya News, March 6, 2008

THE Philippines’ poor are expanding by around 1.3 million people every year, as rising food prices and sluggish wage growth mean that more families cannot afford to feed themselves, government data showed.

The bleak picture of 3.8 million people, nearly double the population of Slovenia, slipping below the poverty line in 2003-2006 is an embarrassment for President Arroyo, who has paraded her government’s anti-poverty credentials amid a growing economy.

James Wolfensohn, the former president of the World Bank who was visiting the Philippine capital, said figures showing that 33 percent of the population were poor in 2006, deteriorating from 30 percent in 2003, were a disappointment.

“That of course for me, as a former World Banker, is a challenging statistic to place before you,” he said at a briefing on prosperity in Manila.

The Philippines, viewed by the World Bank as one of Asia’s brightest prospects in the 1950s, has failed to match its neighbours’ economic progress and is wracked by income inequality with plush condominium complexes overlooking filthy slums in Manila. A hundred or so families control much of the archipelago’s wealth, while 28 million people in 2006, up 16 percent from 2003, could not scrap together theP42 ($1) a day deemed the bare minimum to get by. More than l2million people could not meet the27.8 pesos a day threshold for food.

Economic Planning Secretary Augusto Santos said that part of the problem was due to rising costs for food and fuel, exacerbated by a hike in the national sales tax, as well as rapid population growth.
“Family formation also rose faster than personal income, which dragged down real average family income from Pl48,000 in 2003 to P144,000 in 2006, further constraining the benefits of higher economic growth,” Santos said.

The Philippines’ population is currently estimated at 90 million and is growing at an average rate of 1.8 million people per year as Arroyo, a devout Catholic who support of powerful bishops, emphasises natural family planning over artificial methods.

Last year, economic growth hit a 31-yearhigh of 7.3 percent and Arroyo has vowed to spend more on social services as government coffers swell from asset sales and renewed investor interest.