The trend of worsening poverty in the country noted by the FIES confirms how the majority of Filipinos in the country don’t benefit from economic growth. Independent think-tank IBON Foundation issued this statement in response to the paid advertisement published by Malacañang allies saying that the economy enjoyed 28 quarters of economic growth under the Arroyo administration.

According to IBON research head Sonny Africa, growth in gross domestic product (GDP) averaged 5.4% in the period 2003-2006, yet the number of poor Filipinos even increased by 3.8 million.

“In contrast to the government’s underestimated poverty levels, IBON notes that some 70%-80% of Filipinos try to live off around P100 or less every day,” said Africa.

The problem lies most of all in government neglect of the manufacturing and agricultural sectors, which are at their smallest shares of the economy since the 1950s, added Africa. This decline in the country’s economic foundations drove the unemployment rate to an average of 11.4% in the 2003-2006, which is the worst four-year period of unemployment in the country’s history. There were 11.6 million Filipinos jobless or otherwise underemployed and looking for additional income in 2006.

Backward industry and agriculture cannot create jobs and the labor force is being forced into low-paying, irregular and insecure jobs in the service sector.

For instance while the government hyped 2007 as seeing the fastest economic growth in three decades, the most jobs created last year were in the additional 142,000 working as domestic household help.

The trend of worsening poverty also exposes the folly of relying on overseas Filipino workers (OFWs) and remittances to support domestic household incomes. Poverty has increased despite ever-increasing number of OFWs going abroad and record remittances. By last year, nearly 3,000 Filipinos were going abroad to find work every day and the stock of some nine million overseas Filipinos remitted a record US$14.5 billion. Yet the government is continuing with this retrogressive cheap labor export policy.

The government also continues to promote economic activities that profit foreign corporations rather than benefit the domestic economy. It is promoting foreign investment-intensive call centers and business process outsourcing (BPO), mining, and manufacturing in export enclaves. Unfortunately these are sectors of weak job creation, little multiplier effect, no technological spillover, and poor contributions to the domestic capital stock. It is also pushing free trade policies such as the JPEPA and through ASEAN even if such trade and investment liberalization has been among the main factors that have undermined the domestic economy.

“Without fundamental changes in economic policies, the country’s joblessness and poverty situation can only get worse, and the so-called sustained growth will only benefit foreign and big local business,” said Africa.


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