‘RP trails neighbors in war vs poverty’

The Philippines lags behind other countries in poverty reduction due to lack of sustained growth over the past 30 years, Australia’s Department of Foreign Affairs and Trade said in a report.

According to Australia’s 2007 bilateral overview with the Philippines, there was no sharp decline in poverty in the Philippines like what occurred in faster-growing economies in East and Southeast Asia.

Despite generally favorable human development indicators, the country has not matched its economic potential.   

On key economic indicators such as per capita GDP, the report said the Philippines has been gradually overtaken by most of its neighbors – first, Korea and Taiwan, then Thailand, and more recently Indonesia and China.

Another major challenge is the instability in the south, which has impacted on long-term and broad-based development.

A tenuous peace process in Mindanao, the re-emergence of the New People’s Army (NPA) as a serious threat to stability in various parts of the country, including Mindanao, and other internal security issues, also threaten to exacerbate this fragility.

In January 2001, the Philippine government laid out directions for its social, economic and peace agenda through the revised Medium-Term Philippine Development Plan, 2004-2010.

The plan recognizes that little progress will be made in reducing poverty without sustained and broad-based socioeconomic growth to ensure a stable and predictable environment for private sector investment.

The report also said that the number of people living on less than $1 a day increased from 27 million in 1997 to 31 million out of a total population of 76 million in 2000.

The Philippines has one of the highest levels of income inequality in Asia, with the poorest 20 percent of the population getting only five percent of total income or consumption.

“Poverty in the Philippines is predominantly rural and, although variable by region, is pervasive in southern Philippines, particularly Mindanao. Poor productivity growth in agriculture, under-investment in rural infrastructure, unequal land and income distribution, high population growth and the low quality of social services lie at the root of rural poverty,” the report said.

Natural disasters, the risks associated with variable markets, and the persistence of armed conflict in Mindanao also threaten to deepen existing disparities by disrupting growth and exacerbating poverty.

Australia is one of the top six bilateral grant aid donors, along with the United States, Japan, Germany, Canada and the European Community.

The Philippines is currently Australia’s fifth largest development partner after Papua New Guinea, Solomon Islands, Indonesia and Vietnam.

In 2004, Australia revised its approach to development in the Philippines and started implementing a new, four-year country program strategy with three key objectives – improve economic governance in key Philippines ministries to create the environment for broad-based growth, strengthen security and stability through counter-terrorism capacity building and support for the Mindanao peace process, and raise the living standards of the rural poor in the south of the country.

There is provision on the current program that allows expansion of funding for basic education in the south for government and Islamic schools.

Australia commenced implementation of the Philippines Economic Governance Reform Facility in 2005 and a second phase of the Land Administration and Management Program in January 2006.

Other recent activities include strengthening the capacity of immigration, transport and law enforcement agencies to combat terrorism, and providing additional support to multi-donor and community based activities in support of the Mindanao peace process.

Aside from the current bilateral program, the Philippines will receive around $12.2 million in other flows in 2006 and 2007, including regional projects, volunteer programs, NGO assistance and the Australian Centre for International Agricultural Research ( ACIAR ).

In line with the directions of the White Paper on the Australian government’s overseas aid program, the country program strategy for the Philippines will be revised to include a greater regional focus, increased emphasis on strengthening peace-building efforts and sustaining gains for peace and development in the south and increased participation by other Australian government departments.

Australia will also work closely with the multilateral development banks and other major donors. – Pia Lee-Brago