May 18, 2023
MANILA – This paper’s editorial (“Poor yet to feel fruits of GDP”) last Monday gave us a clear picture of something wrong that’s happening in our country’s economic trajectory. When viewed from the top, our economy is on a “high growth path.” But when assessed on the ground, the “high growth” describes instead our very alarming level of poverty.
The National Economic and Development Authority trumpeted that our economy grew by 6.4 percent in the first three months of this year, beating many countries in the Asian region. This reportedly extends the uninterrupted period of growth of our economy that began in the second quarter of 2021.
The growth is even more impressive, multiple times over, for our country’s business giants. The Ayala, SM, San Miguel, Megaworld, and Metrobank business conglomerates have earned net incomes that grew from 30 to 38 percent for the same quarter of this year.
In very glaring contrast to these rosy pictures, a Social Weather Stations survey revealed that some 51 percent of Filipino families rated themselves poor during the same first quarter of 2023. That’s more than half of all Filipino families who admit to being impoverished. And that’s a total of 14 million families, an increase from the 12.9 families who already felt poor in December 2022.
If the Marcos administration continues with the same old policies that have failed to stop the spread of destitution, our country’s already serious social dysfunction will worsen even more. The attributes of our economy, politics, culture, and social order will be defined by the afflictions of poverty.
Many of our people experience poverty in two ways. Rural producers sell their harvest at very low prices that confine them to subsistence living. Urban end-consumers buy their food supplies at prices that vastly diminish their purchasing power.
Because I spend equal time living both in the province and city nowadays, I notice the huge difference in rural and urban prices of food commodities. Tomatoes, for instance, are currently selling at P10 per kilo in our small town, while they’re sold from P50 to P100 per kilo in Metro Manila. Of course, transportation, storage, handling, and spoilage are inevitable factors that increase city prices, but there’s still a sizeable profit margin for traders or middlemen.
Our local government unit (LGU) in Alcala, Cagayan, has embarked on a program of buying palay from small farmers at prices higher than those offered by traders. Our LGU then mills the palay at its newly set up milling station. It then sells rice to our town’s end-consumers at prices lower than market prices. Our LGU performs both functions—not in the form of subsidy because it actually recovers its costs — as a pro bono trader/middlemen, which it has assumed as an expanded public service for its constituents.
Our LGU has also been directly buying white corn from its farmers which it then processes and sells as its one town one product offering. Our LGU has further organized its peanut and white corn farmers and has linked them up with food manufacturers who now directly buy the farmer’s harvest, erasing the role of middlemen. Farmers’ cooperatives are being assisted and our LGU is likewise linking them up directly with food processors.
Poverty is spreading among real people, while prosperity is expanding among fictional persons (i.e., corporations). This is the surreal and perverse reality that besets our country.
In the face of this crisis, our economic managers must not depend on the old and discredited practice of relying on prosperous businesses to cause a trickle-down of benefits to the masses. Our government cannot leave the role of increasing wages (through increased demand for jobs) and decreasing prices, to business conglomerates whose reason for being is the exact opposite—to minimize wages and to increase prices. Our government must include in its arsenal of solutions, minimizing the role of traders, and actively facilitating direct connections between farmers and consumers, as well as farmers and food manufacturers.
Now is a time for our national and local governments to utilize their enormous powers and vast resources to expand the breadth and scope of “public service” in order to confront head on our pandemic of poverty.