Implementors of social protection emphasize its relevance in mitigating risks, protecting the vulnerable, and promoting resilience of the citizenry through uncertain and crisis situations. The government’s commitment to social protection can also be gauged on what percentage of its population is covered by these programs.
Social protection is defined as the set of policies and programs that help individuals and households, especially the poor and vulnerable, cope with crises and shocks, search for work, improve productivity, invest in the health and education of their children, and protect the elderly. Examples of current social protection programs in the Philippines are the Pantawid Pamilyang Pilipino Program (4Ps), a conditional cash assistance to poor families, and the universal health care insurance for all Filipinos. So, why do we need these programs?
Social protection programs were originally established for formal sector workers. In recent years, though, it has expanded to marginalized sectors, especially those in the informal economy. With the onset of food, financial, and fuel crises in 2008, there has been increased discussion on forging better coherence between humanitarian assistance and social protection measures to reduce the need for recurring humanitarian assistance and facilitate more effective responses in times of crisis.
The Economist in 2017 branded the Philippines as the country having the most persistent poverty in Southeast Asia. Most current data from the Philippine Statistics Authority revealed that poverty incidence increased to 23.7 percent in the first semester of 2021 from the 21.1 percent in the first semester of 2018. In absolute terms, 26.14 million Filipinos lived below the poverty threshold of P12,082 per month for a family of five in the first half of 2021. This is mainly due to the onslaught of the pandemic, which resulted in loss of jobs and income for many Filipinos. The important question, though, is why, despite the relatively good growth episodes before the pandemic, poverty reduction has been gradual and not as fast as that of our Asean neighbors.
Citizens’ unity and cooperation are essential for economic growth and development. Meaningful social relations and trust among people build on social capital, or from what Fukuyama defines as “an instantiated set of informal values or norms shared among members of a group that permits them to cooperate with one another.” Social capital is specifically related to trusts, norms, and social networks and is as valuable as physical, human, financial, and natural capital.
Here is an agenda for the next administration to sustain recovery and hasten economic development:
IT is our belief at the Ateneo Center for Economic Research and Development (ACERD) that ending or easing lockdowns and quarantines alone will not restore confidence or growth. It is only when Covid-19 is under control will economic growth resume. Uncertainty due to this pandemic and related health risks has made many individuals, households, and businesses alter their behavior from their normal ways even without formal restrictions from government. Eradicating such uncertainty is key in building confidence for growth to resume. Countries that were able to bring back the confidence of firms and consumers have seen economic activities return or begin to return to their pre-pandemic levels. For every delay in getting the virus contained, economic recovery to pre-crisis levels could also be delayed.
The Philippine economy continues to accelerate, amid political risks and uncertainty. The World Bank and the Asian Development Bank project a 6.5-percent to 6.9-percent GDP growth rates in the next two years. One important characteristic of the growth the past seven years is its trend toward inclusivity—reduction in poverty incidence, lower unemployment, managed inflation, and because of the economic expansion, bigger budget for basic services for the poor and lower income classes.
The recent visit and pronouncements of the President on a pivot to China raised concerns on its likely benefits or losses to the Philippine economy. Answering this question requires an assessment of the current state of Philippines-China economic relations, particularly in the areas of tourism, international trade, foreign direct investment (FDI) and official development assistance (ODA).
The Association of Southeast Asian Nations (Asean) has embarked on a deeper regional economic integration through the Asean Economic Community (AEC), which aims to launch a free flow of goods and services and the free movement of skilled professionals and capital throughout the region by the end of this year. The AEC is typically defined as (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy (from the AEC Blueprint 2008).
IN his last State of the Nation Address, President Aquino triumphantly recapitulated the achievements of his administration. Without question, even among his staunch critics, average economic growth has seen a historic high of 6.3 percent in the last five years, as compared to the moderate growth of 4.8 percent during President Gloria Macapagal-Arroyo’s term. However, it is a consensus even among economists that the current economic advance has largely benefited a small portion of the population, with poverty incidence remaining high and, thus, exacerbating social inequities. In short, aside from sustaining the higher level of growth, the target of making such expansion more inclusive will now be an important agenda of the next administration. The following are the major concerns for inclusive growth and development:
FORMAL diplomatic relations between the Republic of Korea and the Philippines commenced on March 3, 1949.
IN June I wrote about “Aquinomics”, which promotes good governance as good economics. But what has it brought to the Philippine economy? While critics continue to ignore its palpable gains, good governance has definitely contributed to a higher level of economic growth in the past four years, several credit-rating upgrades, and vast improvements in Transparency International and the World Bank’s cost-of-doing-business rankings. These higher ratings have enhanced the country’s reputation in a major way and boosted its credibility in managing the economy. In fact, a number of research institutions and think tanks expect the Philippines to be one of the leading “high growth” countries in the next few years. The trend path of gross domestic product (GDP) is already at a high 6 percent to 7 percent, despite the recent dip of 5.3 percent in the third quarter of this year.
IN its recent release of hunger statistics for the second quarter of 2014, Social Weather Stations found that an estimated 3.6 million families, or 16.3 percent, experienced involuntary hunger at least once in the past three months, while 3 million families (13.5 percent of the total) experienced moderate hunger and 609,000 families (2.8 percent) experienced severe hunger.
ACCORDING to the Bangko Sentral ng Pilipinas, remittances from overseas Filipino workers (OFWs) reached an all-time high of $25.35 billion in 2013. As of July, these were already tallied at about $15 billion, and could reach $27 billion at year-end. Many economists agree that these large transfers, which already surpassed official development assistance and foreign direct investment inflows, have actually fueled the Philippines’s economic growth for the last two decades. Analyzing historical data for gross national income (GNI), we see a shift in the share of net primary income (NPI) to GNI from a negative territory to a positive one, starting in the 1990s. The chart below shows that NPI is the only component of GNI that has actually accelerated its share in the last 20 years, while most have decreased their share to GNI in the last 50 years.
