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Philippines Causes of Poverty
From one perspective, poverty is a function of total output
of an economy relative to its population--GNP per capita--and the
distribution of that income among families. In the World Bank's
World Development Report, 1990, the Philippines was ranked
at the lower end of the grouping of lower middle-income
economies. Given its relative position, the country should be
able to limit the extent of poverty with a reasonably equitable
sharing of the nation's income. In fact, the actual distribution
of income was highly skewed (see
table 12, Appendix). Although
considerable underreporting was thought to occur among
upper-income families, and incorrect reporting from lack of
information was common, particularly with respect to noncash
income, the data were adequate to provide a broad overview.
In 1988 the most affluent 20 percent of families in the
Philippines received more than 50 percent of total personal
income, with most going to the top 10 percent. Below the richest
10 percent of the population, the share accruing to each decile
diminished rather gradually. A 1988 World Bank poverty report
suggested that there had been a small shift toward a more equal
distribution of income since 1961. The beneficiaries appear to
have been middle-income earners, however, rather than the poor.
The World Bank report concluded, and many economists
associated with the Philippines concurred, that the country's
high population growth rate was a major cause of the widespread
poverty, particularly in the rural areas. Implementation of a
government-sponsored family-planning program, however, was
thwarted by stiff opposition from the hierarchy of the Roman
Catholic Church
(see Population Control
, ch. 2). Church
pronouncements in the late 1980s and early 1990s focused on
injustice, graft and corruption, and mismanagement of resources
as the fundamental causes of Philippine underdevelopment. These
issues were in turn linked to the concentration of control of
economic resources and the structure of the economy. Land
ownership was highly unequal, but land reform initiatives had
made little progress.
In urban areas also, the extent of poverty was related to the
concentrated control of wealth. Considerable portions of both
industry and finance were highly monopolized. Access to finance
was severely limited to those who already possessed resources.
The most profitable investment opportunities were often in areas
in which tariff or other forms of government protection ensured
high profits but did not necessarily result in rapidly expanding
employment opportunities. In her election campaign President
Aquino pledged to destroy the monopolies and structures of
privilege aggravated by the Marcos regime. She looked to the
private sector to revitalize the economy, create jobs for the
masses of Filipinos, and lead the society to a higher standard of
living. The state-protected monopolies were dismantled, but not
the monopoly structure of the Philippine economy that existed
long before Marcos assumed power. In their privileged positions,
the business elite did not live up to the President's
expectations. As a consequence, unemployment and, more
importantly for the issue of poverty, underemployment remained
widespread.
Data as of June 1991
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