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Poverty in the Philippines
Katrina Chua, NYU 17
La Pietra Dialogues
July 11, 2014

On February 13, La Pietra Dialogues organized a conversation with NYU Florence´s Debora Spini, Alessandro Pinzani, from the Federal University of Santa Catarina in Brazil, COSPE´s Maria Donata Rinaldi and PerMicro Bank´s Francesca Di Giuseppe to discuss the politics and economics of poverty. Having come from the Philippines, I wanted to know these experts’ opinions on the matter. When COSPE’s Maria Rinaldi mentioned the three keys to fighting poverty, I reflected on whether these strategies could actually alleviate poverty in my own country.

In the Philippines, 19.7% of the citizens live below the poverty line. Some areas have 50% of their residents in poverty while the more industrialized ones, like Metro Manila, only have 2.6% [1]. For this reason, Metro Manila is a mirage that attracts impoverished rural residents who bear unrealistic dreams of a promising future. Only after successively being rejected by companies do they realize that the labour market is saturated with urbanites who’ve received better education and are thus more qualified. The reality is that in addition to the 2.6% I mentioned, 6.5% of metropolitans are unemployed and 17.9% are underemployed [2]. Furthermore, unemployment statistics don’t account for people who have given up the search for jobs. Imagine the percentage of these people in Metro Manila who live with no means of livelihood. Faced with the reality, they try to go back to their provinces, but insufficient funds hinder them from doing so. This is where microcredit comes in. 

Rinaldi’s first key to fighting poverty is microcredit, the loaning of small amounts of money to the poor. Microcredit funds capital for some rural Filipinos’ livelihoods, relieving them of the need to migrate to Manila. However, one must not overestimate its ability to alleviate poverty. A study by the Asian Development Bank (ADB) revealed that microcredit has a regressive impact on incomes because “the cost of and availability of the loans appears to be insufficient to prod [potential borrowers] to select more productive activities to pay for the cost of borrowing and to earn some revenues.” And even if they overcome this obstacle, they still face problems of agricultural monopolies and looting by rebels. I believe microcredit may become even less effective in an urban context. Surrounded by tight competition, the poor face problems investing. Nonetheless, I think microcredit is a valid tool in perhaps not solving, but at least alleviating, poverty.

The second key is to improve gender and generational relationships. In certain countries such as Brazil, Rinaldi believes that women and older citizens are not given opportunities equivalent to those provided to young men. Hence, women and older citizens are untapped resources that could contribute to supporting families. Since government encourages both men and women to work overseas, it seems that focusing on the second key is not a priority.

Rinaldi’s final key to fighting poverty relies on strong governmental action, which is one of Philippines’ greatest obstacles. This obstacle is caused by the attitudes of the affluent, who make up a large part of the government. With ubiquitous slum areas positioned beside rich residential areas, one would expect the citizens to feel strongly about this issue. However, resentment predominates the feelings of the more affluent, for they believe that the poor themselves are responsible for the wide-spread poverty. In a TED talk I recently watched, social psychologist Paul Piff and his colleagues studied the correlation between money and being mean [3]. The subjects were to play Monopoly, with one player having more money – an unfair advantage – than the others. After a few rounds, the richer player displayed signs of dominance, smacking his token on the board, eating more pretzels, and even boasting of his victory. When the winners were interviewed, they elaborated on their own strategies, forgetting the fact they were given more money. Piff added that cheating increases as one climbs the socio-economic ladder while compassion and empathy diminishes. This phenomenon, I believe, could account for the affluent’s attitude toward the poor. Similarly, the poor reciprocate these negative feelings, preventing cooperation between the two groups. Although the government is responsible for addressing poverty, it is at the same time composed of affluent members of society who sometimes bear dismissive feelings and thus neglect the pressing issue.

Piff concluded optimistically by claiming that people, when reminded of society’s prevailing problems, regain their compassion, even if only momentarily. But as previously stated, our constant exposure to poverty has left some – even political figures - disdainful of the poor. In 2013, a scandal featured Filipino senators who spent their budgets on ghost projects so that the money could flow into their pockets. The use of charities as facades shows the extent to which certain government officials are willing to exploit poverty. The government even goes to the extreme of obscuring poor people from sight by building a wall around the slum areas.

Having realized that the key strategies Rinaldi outlined are difficult to implement in the Philippines, I considered the societal impact of persistent poverty. A potential answer is discussed in another TED talk, one about the thinning line between market economy and society [4]. Michael Sandel, a political philosophy professor at Harvard, says that we are evolving into a market society defined by “a way of life where market relations and market incentives and market values come to dominate all aspects of life.” For example, people with more money choose to fly in business class and separate themselves from the other passangers, or the use of a fastpass in theme parks is further evidence of a market society. This market society has a ‘corrosive effect on commonality against growing inequality,” creating a condition wherein we live separate lives. This market society is a very threat to democracy because democracy requires citizens to interact with one another, whether rich or poor, in order for them to find the common good. This threat has materialized in the Phillipines through the shift from a democratic to unofficially oligarchic government. The government is comprised by political dynasties such as Arroyo, Binay, Recto, and many more. Our current president, Noynoy Aquino, is member of two political dynasties. He is the son of Corazon Cojuangco (the first woman president in the Philippines) and Benigno Aquino (an opposition senator to the Marcos regime). Despite Ferdinand Marcos being an ousted dictator, his family still has a strong presence in Philippine politics, with his son being a senator and his wife, Imelda Marcos, being a current member of Congress. These political families, of course, are also heavily involved in the economy. The Cojuangco dynasty, for instance, owns the largest telecommunications company in the Philippines.

Having reflected on the condition in the Philippines, I wonder, if not the government or the affluent members of society, who can address poverty in the Philippines?

Sources:

[1] "NSCB - Poverty Statistics." NSCB - Poverty Statistics. December 9, 2013. http://www.nscb.gov.ph/poverty/.

[2] "Labour and Employment." Philippine Statistics Office: National Statistics Office. 2013. http://www.census.gov.ph/statistics/survey/labor-force.

[3] "Paul Piff: Does Money Make You Mean?" In Ted. December 2013. Accessed March 03, 2014. http://www.ted.com/talks/paul_piff_does_money_make_you_mean.html.

[4] Michael Sandel: Why We Shouldn´t Trust Markets with Our Civic Life." October 2013. http://www.ted.com/talks/michael_sandel_why_we_shouldn_t_trust_markets_with_our_civic_life.html.

 
 
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