Worsened

While Pope Francis was here, President Aquino delivered a speech where, among other things, he claimed 2.4 million people were lifted out of poverty by his administration.

Those of us who follow the economic numbers closely were taken aback by this claim. It was not only boastful. It is very likely unfounded. No other related numbers support that astounding claim.

To be blunt: our president appeared to be lying barefaced in front of the Pope.

Aquino, of course, has been habitually loose with his numbers and intrepid with his claims in major speeches. Every SONA he delivered needed serious fact-checking. In his last SONA, he claimed his administration built over 12,000 kilometers of roads. That is a stupendous claim that most of us who sit in traffic everyday believe was picked out of thin air.

We have to be extra careful with poverty numbers. These are very important numbers. Legitimacy rests on them. The final task of every government is to alleviate poverty. In the end, its success or failure will be determined not by how many police commandos the administration sends to certain death but by how many Filipinos are lifted out of misery.

We have international commitments, such as the Millennium Development Goals, where proper accounting of poverty alleviation cannot be compromised. We are under close scrutiny because the Philippine government has been given to altering the parameters in order to improve the numbers.

I was so bothered by Aquino’s strange numbers last January that I had to ask DSWD Secretary Dinky Soliman about them when we had her on the other end of the phone line for our radio program Karambola. We were interviewing Dinky about the street people brought to Chateau Royale during the Pope’s visit. Asking her about the President’s most recent poverty numbers was therefore not too unrelated.

Dinky hewed and hawed a bit before finally conceding Aquino’s numbers were likely “extrapolated.” Extrapolated from what, Dinky was not very clear – although it should be part of her job to be keenly aware of the dimensions of poverty in our society.

Last Friday, the Philippine Statistics Authority (PSA) released the Annual Poverty Indicators Survey (APIS). The study reports that the number of Filipinos falling under the controversially defined poverty line rose to 25.8 percent in the first half of 2014 from 24.6 percent the year before.

Therefore, even by the contested methodology used by government agencies, poverty incidence worsened. In the self-rated poverty questionnaire used by commercial polling firms, about half of Filipinos rate themselves poor.

Economic Planning Secretary Arsenio Balisacan, who built his reputation as an economist for doing poverty studies, was quick to blunt the impact of the higher poverty incidence figure by pointing out that incomes for the poorest Filipinos improved. Per capita income for the first semester 2014 was higher by 6.4 percent from the year preceding. For the bottom 30 percent of income earners, per capita income improved by about 7.3 percent.

Balisacan is trying to tell us that the poor is becoming less poor although more of them are now below the poverty line. That might not make sense to everybody; but it does make sense to professional economists. They are like lawyers.

But hold on, Balisacan says more. Although the poor did improve their per capita incomes, all the improvement was wiped out by high inflation particularly in food prices. Because the poor spend a bigger proportion of their small incomes on food, higher food prices injure them the most.

There is something or someone to pin the blame on in this case too.

Two things explain higher food inflation says Balisacan: Typhoon Yolanda and poor market management of rice. Yolanda, we know, devastated our midsection — although the calamity was quickly followed by a massive flow of international food assistance.  The spike in the price of rice is due entirely to incompetence on the part of our agriculture officials — as well as the high possibility of corruption related to rice importation.

There is a third, more sustained factor, explaining the high food price regime that causes so much poverty: the failure of our agriculture policy and the failure of this administration specifically to sustain the improvement of the national logistics system.

Our agriculture policy failed to raise efficiency of land use and integration of farm systems to bring down the cost of producing food items. This administration, even if we have two secretaries of agriculture, does not have a comprehensive strategy to raise productivity. Agriculture continues to be the drag on our economic expansion. Rural poverty remains the most resistant cause of misery.

We have horrible loss of agricultural produce due to spillage and spoilage. The high rates of loss adds to the final food price. The only way to address this is to improve the national logistics system. This administration has no strategy to do so.

Bringing down the food price regime should be the core strategy of the next administration. This administration never understood the importance of doing this as the spear point of a general strategy to bring down poverty rates.

The whole point of the infrastructure program should be to lower the costs of internal trade. In the process, we bring down the costs of bringing food from the farm to the consumer.

For as long as food remains expensive, the poverty rate cannot be brought down.

Which brings us back to Aquino’s claim that 2.4 Filipinos were lifted out of poverty during his watch. That simply did not happen. The opposite is true: about that number plunged below the poverty line.

In which case, Aquino clearly lied before the Pope and before his people.