Trickling down

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By Neil Honeyman

An Independent View

Wednesday, April 23, 2014

THE end of PNoy’s term is in sight. Only two years to go. Will history record his efforts as well-meaning but of limited impact? Or will he be regarded as a President who made a long-term difference with benefits to all?

A revised Philippine Development Plan (PDP) was unveiled last week. Inclusivity from our economic growth is the aim. This means that the objective is to ensure that all, especially the poor, benefit from the nation’s economic progress.

The conditional cash transfer (CCT) program is approaching full implementation. In 2014, P62.6 billion is allocated to provide P1, 400 per month to needy families on condition that they send their children to school. This means that 3.7 million families or around 20 million people (20 percent of the population) are participants.


The PDP aims to make the maximum impact where it is most needed.
Provinces with the greatest number of poor households, which includes Negros Occidental, are designated as “Category 1” where poverty reduction efforts will be focused on improving infrastructure to attract more job-generating investments in food manufacturing, information technology, business process management, logistics, and tourism.

Scalpels as opposed to scatter guns are required to maximize impact for the limited resources available.

Example. A minor investment in providing Customs, Immigration and Quarantine (CIQ) facilities at Bacolod-Silay airport would attract thousands of international tourists who currently do not come to the Philippines. Hundreds, perhaps thousands of new jobs will accrue in the hospitality industry within Negros. Full implementation of the PDP requires all government departments to be supportive, including the Bureau of Immigration. The minimal investment in CIQ produces significant returns.

The government owns 20 hectares of land at the old and moribund Bacolod airport. Lucio Tan owns a further 17 hectares. Selling this land for development would engender substantial job creation. Now is the time to do this.

An increase of infrastructure investment to 5 percent of gross domestic product (GDP) by 2016 compared with the 2013 level of less than 3 percent is a key PDP feature. This translates to around P600 billion for the 2016 budget which could balloon to around P3 trillion. [The 2014 budget is P2.26 trillion] Government debt as a ratio of GDP is currently around 50 percent, but this is likely to rise.

What else can be done to help poverty eradication? Population increase requires job generation and the private sector is not able to keep up. Youth unemployment, including college-trained unemployed workers, remains obstinately high. Additional tax incentives for employers who generate new jobs would encourage profits to be reinvested rather than spent on shareholder dividends.

The trickledown effect, where everyone benefits from the nation’s economic growth, is demonstrably not automatic. Conscious decisions, with inclusivity as the objective, have to be made. Among these are the establishment of procedures which do not create corruption opportunities.

Predictably, those who have been charged with graft and corruption are able to delay, seemingly indefinitely, the processes by which they are brought to justice. Their prevarications and obfuscations need more effective counter measures than those we are currently seeing from the Ombudsman’s office. The accused are entitled to due process but they are not entitled to control the process.

Corruption eradication is a necessary adjunct to poverty eradication.

Published in the Sun.Star Bacolod newspaper on April 23, 2014.


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