Number Of Poor Filipinos Likely To Rise By 4 Million In 2009

Using even the government's unrealistically low poverty line, the number of poor Filipinos will likely increase by 4 million this year from 2006, according to research group IBON Foundation.
This figure is based on a conservative estimate, said IBON research head Sonny Africa, since it merely assumes a continuation of trends in the 2003-2006 period. Gross domestic product (GDP) growth averaged 5.6% in 2004-2006, but the number of poor Filipinos according to the government's official poverty line still increased by 3.8 million to 27.6 million in 2006. GDP growth will likely average even less than 5% in the 2007-2009 period, which means that poverty will possibly increase by at least 4 million poor Filipinos.

Africa added that growth has dropped steeply from 7.2% GDP growth in 2007, to 4.6% in 2008 and will likely be less than 3% this year. The real number of jobless Filipinos increased to 4.1 million in 2008 and will likely rise to some 5 million this year. The number of unemployed and underemployed Filipinos could then rise to at least 11 to 12 million in 2009.

Given the scale of the problem, the government's measures for supposedly dealing with the crisis are sorely lacking, he said. The alleged "pump-priming" 2009 national government budget is actually equivalent to just some 16% of the GDP, and is among the smallest in the last two-and-a-half decades. The size of the budget has been more or less continuously falling from a peak of 24% in 1990. The supposed "alternative livelihood" and "jobs placement" programs seem oblivious to the severity of global and domestic economic problems and the absence of jobs for millions of displaced workers. In any case, they are even very narrowly targeted at just newly-displaced workers and ignore the over 4 million workers who were unemployed even before the recent worsening of the crisis.

There is certainly a need for the government to undertake mitigating measures, said Africa. Because of the huge number of poor Filipinos, the mitigation measures have to reach the greatest number in the quickest manner possible. Among these are restoring real per capita social services spending to at least 1997 levels through an additional P246 billion for social services and removing the value-added tax (VAT) on food and oil products.

Over and above these measures, there needs to be a radical change in economic policies to strengthen the domestic economy and create jobs and livelihoods for millions of Filipinos, said Africa.

On Nograles Cha-Cha Reso: Foreign Land Ownership Has Weak Link To Investment

While the committee on constitutional amendments prepares to vote on Speaker Prospero Nograles’s Resolution 737, research group IBON Foundation says that changing the charter to allow foreign business to own land does not necessarily increase foreign investment.
The Nograles bill seeks to amend the economic provisions of the Constitution to allow foreign corporations and associations to own land. Charter change proponents argue that allowing foreign business to own land in the Philippines will increase foreign investment flows which will lead to development.

“The experience of our Asian neighbors proves that the relationship between foreign land ownership and overall levels of investment is weak,” said IBON research head Sonny Africa. “This reinforces the suspicion that HR 737 is a ruse to justify charter change for self-serving political ends.”

With the current constitutional restriction on foreign land ownership, the Philippines had foreign direct investment (FDI) inward stock of US$19.0 billion in 2007 which was equivalent to 13.1% of gross domestic product (GDP). It is made to appear that this is a major factor in the country’s underdevelopment.

Yet Vietnam does not allow foreign land ownership but had inward FDI stocks of US$40.2 billion or up to double or triple the value of foreign investment in the Philippines. Indonesia, meanwhile merely gives land cultivation or building rights but had inward FDI stocks of US$59 billion.

Thailand, with its US$85.8 billion in investment, also prohibits foreign ownership of land as a general principle. Foreign companies can own land only upon approval of its Board of Investment, by ministerial permission or by virtue of treaty provisions.

Singapore, with its massive US$249.7 billion in FDI inward stock, is often cited as underscoring the benefits of foreign land ownership. This “ownership” though is more in the form of long-term leaseholds and not freeholds or title-deeds. Malaysia which has US$76.8 billion in investment also allows foreigners to acquire industrial land only on a leasehold basis.

There are many factors affecting FDI such as domestic market size and prospects, production costs and efficiency, infrastructure, economic stability and extent of corruption, said Africa. Foreign land ownership in itself is neither necessary nor sufficient– while raising the danger of land speculation and greater foreign control of the domestic economy.

It must also be accepted that foreign investment does not necessarily lead to development and the government has to create the conditions for the country to benefit, said Africa. More importantly, Cha-cha proposals such as the Nograles bill undermine national interest, surrender the country’s economic sovereignty, and legalize foreign corporate plunder of natural resources.