Was growth in 2011 inclusive?

Benjamin E. Diokno

The Philippine economy grew by 3.7% in 2011, down from 7.6% GDP growth in 2010. That kind of growth is nothing to be proud of. But to add insult to a job-challenged and starving people, administration officials called the modest economic expansion as inclusive. But surely such positive spin is not supported by hard facts and opinion survey results.

It is hard to imagine how such a modest economic growth can be inclusive when we know that growth in the Philippines is not evenly distributed. When the economy grew by 3.7%, it does not mean that the state of economic well-being of every Filipino improved by the same rate, across-the-board.

The harsh reality is that for some big industrialists and rich stockbrokers, their incomes may have increased 100%; for some, their economic well-being may have improved modestly; for a great majority, their economic well-being may have stagnated; and for many, their economic well-being may have been eroded.

The agricultural sector did not perform well last year. But that’s one sector where a great number of poor people depends. It grew by only 2.6%. But coming from two consecutive years of contraction, that is, -0.7% in 2009 and -0.2% in 2010, that’s like stagnation. And with fast-rising population, no wonder a lot of Filipinos are finding hard to make ends meet, or even satisfy their basic food needs.

A disturbing indicator that all’s not well in the economy is the recent Social Weather Stations’ survey results on the incidence of hunger. Overall hunger has increased between September to December 2011.

A long-term perspective is instructive. The SWS Hunger surveys were started in 1998. The average overall hunger rate is 14.1%, with Moderate Hunger at 10.7% and Severe Hunger at 3.4%.

Overall Hunger is the sum of Moderate Hunger (referring to those who experienced involuntary hunger "Only Once" or "A Few Times" in the last three months) and Severe Hunger (referring to those who experienced it "Often" or "Always" in the last three months).

What’s the performance of the Aquino III administration on hunger incidence? In the December 2011 SWS survey results Overall Hunger was 22.5%, Moderate Hunger was 17.7%, while Severe Hunger was 4.7%. It’s best performance was in the June 2011 SWS survey: 15.1%, 13.1%, and 2.0%, respectively.

But these numbers don’t compare well with the average score since the numbers were collected in 1998. To repeat, the averages for Overall, Moderate and Severe Hunger rates are: 14.1%, 10.7%, and 3.%.

Hunger rates were lowest in September 2003 when they were 5.3%, 4.0%, and 1.2%.

How do overall hunger rates in December 2011 compare with the numbers at the start of the Aquino administration, by region? In June 2010, the survey before President Aquino assumed the presidency, overall hunger rates were 22.0% for the National Capital Region, 18.3% in the Rest of Luzon, 21.0% in the Visayas, and 26.0% in Mindanao. In the December survey results, the hunger rates were 22.0%, 23.0%, 25.0%, and 19.7%, respectively. Hence there was an overall deterioration in hunger incidence in the Rest of Luzon and the Visayas, while it has remained unchanged in the NCR and an improvement in Mindanao.

What’s the relationship of hunger incidence to poverty? The fall in Self-Rated Poverty from 52% in September 2011 to 45% in December 2011 was outweighed by the rise in Hunger among Self-Rated Poor families from 27.9% to 33.6%. In other words, the Poor were fewer, but a much larger proportion of them were hungry, SWS reported. By the way, no public official in a humane society should accept the self-rated poverty incidence of 45% as tolerable.

There was a rise in Hunger among Food-Poor families from 31.1% in September to 38.1% in December, outweighing the decline in Self-Rated Food Poverty from 41% to 36%.

These numbers support the view that the slowdown in the economy has affected the lives of many Filipinos in a significant way. Put simply, many people were left behind -- they are poorer and more prone to hunger than before.

The uneasiness and unhappiness of Filipinos on the way the present administration in handling the economy is reflected in surveys done by Pulse Asia.

The disapproval ratings of the Aquino administration has doubled on issues that affect the poor majority the most. In October last year, 18% of respondents disapproved of the way the Aquino administration was performing on the issue of poverty reduction. In November this year, the disapproval rating on poverty reduction has soared to 36%, double the level a year ago.

In the November 2011 Pulse Asia survey results, more people disapprove (36%) than approve (32%) in the way the current administration is implementing its poverty reduction programs.

But poverty reduction is related to other national issues like job creation, improving the pay of workers, moderating inflation, and, in the long-run, controlling fast population growth.

The disapproval rating on the government’s programs to create jobs rose from 11% in October last year to 21% in November this year, or a difference of 10 percentage points. The number of citizens who disapproved the administration’s performance on job creation has nearly doubled.

On other gut issues the deterioration was equally serious: controlling inflation (from 21% to 37%,up by 16 percentage points), increasing the pay of workers (from 14% to 25%, up by 11 percentage points).

With slowing growth, many Filipinos are being left behind. The Aquino administration has to regroup and refocus it attention in the issues that affect the great majority of Filipinos, especially the poor.

Nobody can dispute the need to control corruption. But controlling corruption and providing essential public services efficiently and in a timely fashion are not mutually exclusive. One can do both at the same time.