Holistic approach to address poverty

The findings of the Commission on Audit (COA) that nine out of every 10 beneficiaries of the government’s Pantawid Pamilyang Pilipino Program (4Ps) are still poor after at least seven years of assistance show that this program alone is not enough to address the poverty problem. The performance audit report on 4Ps said the project received P780.71 billion in funding between 2008 and 2021, of which P537.39 billion were cash grants. While there were 4.2 million active 4Ps beneficiaries who have been on the program for seven to 13 years, COA noted that 90 percent of them, or 3.82 million households, remained below the poverty threshold. Only 32,331, or less than 1 percent of the active households, were able to move past the poverty line as of the fourth quarter of 2021, it added.

Another indicator that the government’s approach to address poverty is hardly working is the study released last week showing the Philippines among the world’s laggards in closing the gap between the rich and the poor because of meager funding for education and social services, dismal tax collection, and low respect for labor rights during the pandemic. According to the 2022 Commitment to Reducing Inequality (CRI) index report of Oxfam, the British-founded group of charitable organizations focusing on global poverty alleviation, and the nonprofit advocacy group Development Finance International, the Philippines ranked 102nd out of 161 countries in reducing inequalities, compared with the 2020 ranking of 109th out of 158 counties.

The report noted that while the Philippines spent 40 percent of its budget on education, health, and social protection, it was lagging behind the amounts allocated by its neighbors in East and South Asia. It pointed out that while Filipinos faced high costs of food and living expenses due to rising inflation and the pandemic, the country’s essential health spending remained dismal, with about 55 percent of the population without health care coverage, and their out-of-pocket medical expenses pushing more people into poverty. The 2022 CRI index also showed that the Philippines lagged in terms of reducing inequality through progressive tax policies (104th out of 161 countries). In tax collection, the Philippines was 136th, with the report noting that the government collected just 19 percent of potential revenues, well below the regional average of 31 percent and even behind Afghanistan, Sri Lanka, and Myanmar, three countries experiencing economic and political turmoil. Among labor indicators, the worst performance was in respecting labor and union rights, where the Philippines was 146th. “The Philippines, with a minimum wage of 13 percent of per capita GDP, is at the bottom 20 of the countries with the lowest minimum wages, putting the low-paid workers at risk of exploitation,” the report said.

Oxfam’s findings on the education component of addressing social and economic inequality are supported by the World Bank’s latest report on the state of education in the country. Last July, the multilateral lender noted that after two years of distance learning, nine out of 10 Filipino children aged 10 were still struggling to read simple texts. This made the Philippines one of the countries with the highest rates of “learning poverty”—or being unable to read and understand short, age-appropriate texts by the age of 10, or between Grades 4 and 5 under the K-to-12 system—in the East Asia and Pacific region. Based on World Bank estimates, as many as 91 percent of children in the Philippines at late primary age were not proficient in reading. The Philippine learning poverty rate is more than double the regional average of 34.5 percent. The World Bank added that the country was spending less on public education than its regional and income-level peers. “Primary education expenditure per child of primary education age in the Philippines is $569, which is 83.5 percent below the average for the East Asia and Pacific region, and 29.5 percent below the average for lower-middle income countries,” the World Bank said.

The COA and Oxfam reports clearly show that government efforts to combat poverty, including 4Ps, can do only so much. Addressing poverty requires a holistic approach because being poor has a much wider social and economic dimension. Being poor does not only mean a lack of money. It also equates to a lack of education, housing, and other basic welfare needs. Among these, education must be given priority because possessing knowledge opens many opportunities to move out of poverty and advance in life. The government must work double time to expand the poor’s access to better public education. A lot will depend on how the Marcos Jr. administration will steer the economy back to the robust growth path because higher economic growth means more taxes from vibrant industries, and allow the government to spend on public education and other social services. Higher economic growth also means more jobs to address the unemployment problem, but those work opportunities will often go to the educated, thus leaving the poor behind.

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