PHILLIPINE INSTITUTE FOR DEVELOPMENT STUDIES Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas
Vol. XXI No. 4
July - August 2003
ISSN 0115-9097
Fighting poverty: The impact of Philippine initiatives Life is like a wheel, they say. One day, you’re at the top. The next day, you’re on the ground and looking at those at the top. Filipinos believe that the cycle is not permanent, thus, they anticipate the next turn of the wheel. However, what percentage of the population really gets to experience being on top one day and being down the next day? Since the 1997 East Asian financial crisis, the economy has recovered although growth has been moderate. Such information may not have much impact on the poor who feel the pressure of not having enough— if any—to spend on their needs. Moreover, the increase in income inequality has deepened the gap between the rich and the poor. In short, poverty continues to hound them. The problem of poverty has always beset each Philippine government
administration which has, in response, never failed to include poverty alleviation as one of the goals in the agenda. Despite this, there remains one nagging question: Have there been positive developments in the Philippines’ fight against poverty? This paper examines the performance of the Philippines in its fight against poverty and reviews the trends in its poverty situation using both the conventional measures of poverty and the more recent human development indicators. It also looks into the changes in the policy environment over the last 25 years.
On this basis, in 1985, 44.2 percent of the total number of families in the country were considered poor. Until the early months of 1997, there were modest improvements that brought down poverty incidence to 31.8 percent. However, it was apparent that poverty reduction efforts were not anchored on strong and steady grounds because the onset of the Asian financial crisis, coupled with the El Niño phenomenon in 19971998, reversed the positive trend and caused poverty incidence to increase to 33.7 percent in 2000 (Table 1). ✒3
What's Inside? 9
* This article is based on and condensed from PIDS Discussion Paper 2002-20 titled "The poverty fight: Have we made an impact?" written by Dr. Celia M. Reyes, PIDS senior research fellow. The paper was prepared for the PIDS Perspective Paper Symposium Series in celebration of the 25th founding anniversary of the Philippine Institute for Development Studies.
What do indicators tell us? With regard to the conventional income-based measure of poverty, the official estimate of poverty incidence is based on a comparison of income with a poverty threshold defined by the National Statistical and Coordination Board (NSCB). The poverty threshold is the income needed to meet basic food and nonfood needs.
Large families prone to poverty
13 Making waste recycling work for Metro Manila 16 Canlas bids PIDS goodbye
DEVELOPMENT RESEARCH NEWS
DEVELOPMENT RESEARCH NEWS Vol. XXI No. 4 July - August 2003 ISSN 0115 - 9097
DEVELOPMENT RESEARCH NEWS is a bimonthly publication of the PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES (PIDS). It highlights the findings and recommendations of PIDS research projects and important policy issues discussed during PIDS seminars. PIDS is a nonstock, nonprofit government research institution engaged in long-term, policy-oriented research. This publication is part of the Institute's program to disseminate information to promote the use of research findings. The views and opinions expressed here are those of the authors and do not necessarily reflect those of the Institute. Inquiries regarding any of the studies contained in this publication, or any of the PIDS papers, as well as suggestions or comments are welcome. Please address all correspondence and inquiries to: Research Information Staff Philippine Institute for Development Studies Room 304, NEDA sa Makati Bldg., 106 Amorsolo Street, Legaspi Village, 1229 Makati City, Philippines Telephone numbers 892-4059 and 893-5705 Telefax numbers (632) 893-9589 and 816-1091 E-mail address: publications@pidsnet.pids.gov.ph Reentered as second class mail at the Makati Central Post Office on April 27, 1987. Annual subscription rates are: P200.00 for local subscribers; and US$20.00 for foreign subscribers. All rates are inclusive of mailing and handling costs. Prices may change without prior notice.
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July - August 2003
Editor's Notes For millions of Filipino families, poverty is something they have to live with every single day. Some have become resigned to such fate but many continue to struggle to get themselves out of such rut. Who manage to escape and who remain in it? In this issue's feature story, Dr. Celia Reyes (PIDS senior research fellow) categorizes the poor into two types—the "chronic" or those who remain in such state for a long time and the "transient" or those who move in and out of the poor threshold. And although her analysis covers only the period immediately before and after the 1997 East Asian financial crisis, her message clearly signals that attacking the issue of poverty must be seen in this light where policies and programs to be put in place by government and other concerned parties may differ for each of these two types. Indeed, past and present Philippine administrations, aware of and concerned about the scourge of poverty, have put antipoverty programs in the center of their respective agenda. But how does the record of the past 15 to 20 years register insofar as the programs' impact is concerned? Are the programs targeted well? Are the strategies correct and suitable? Again, Dr. Reyes' article sheds some light on this and draws some key lessons from the country's long experience in dealing with poverty. The coming presidential election in May 2004 may still be a few months away. But for the presidentiables, this feature story may be the one that they should give full attention to. â??
Editorial Board: Dr. Mario B. Lamberte, President; Dr. Gilberto M. Llanto, VicePresident; Mr. Mario C. Feranil, Director for Project Services and Development; Ms. Jennifer P.T. Liguton, Director for Research Information; Ms. Andrea S. Agcaoili, Director for Operations and Finance; Atty. Roque A. Sorioso, Legal Consultant. Staff: Jennifer P.T. Liguton, Editor-in-Chief; Genna J. Estrabon, Issue Editor; Sheila V. Siar (on study leave), Jane C. Alcantara, Claudette G. Santos, Ma. Gizelle R. Gutierrez, Edwin S. Martin and Mitzi H. Co, Contributing Editors; Valentina V. Tolentino and Rossana P. Cleofas, Exchange; Delia S. Romero, Galicano A. Godes, Necita Z. Aquino and Alejandro P. Manalili, Circulation and Subscription; Genna J. Estrabon, Layout and Design.
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DEVELOPMENT RESEARCH NEWS
Table 1. Poverty incidence of families, 1985-2000 Year
Poverty incidence
Standard error
of families 1985
44.2
0.4
1988
40.2
0.4
section. The gap between urban and rural areas has also been increasing.
An alternative way of presenting poverty data is in 1991 39.9 0.3 terms of the 1994 35.5 0.3 proportion of the 1997 31.8 0.3 population who are 2000 33.7 0.3 poor. The poverty incidence based on Sources of basic data for 1985 -2000: Family Income and Expenditures individuals is larger Surveys 1985, 1988, 1991, 1994, 1997 and 2000, and NSCB. than the incidence using families as the unit because poor families tend to have larger family While the proportion of poor sizes. However, the trend of its families has declined between 1985 and 2000, the actual number of poor movement follows that of the incidence among families, with families, however, has gone up from the proportion of the population 4.36 million in 1985 to 5.14 million who are poor steadily declining in 2000 due to population increase. from 49.2 pecent in 1985 to 36.9 And although population growth percent in 1997. But again, due to rate may have declined in the last 20 years, the decline has been slow. The the effects of the East Asian financial crisis in 1997-98, the latest Census of Population in 2000 poverty incidence level went up to even reported a reversal when it 39.5 percent in 2000, effectively showed an acceleration of populawiping out the gains in poverty tion growth during the1995-2000 reduction over the last six years. period (Table 2). Despite the relative decline in poverty incidence, it is worrisome to note that poverty incidence remains very high in certain regions and provinces as can be seen in the next
Table 2. Annual population growth rate, Philippines Year
Population growth
1960-1970
3.08
1970-1975
2.78
1975-1980
2.71
1980-1990
2.35
1990-1995
2.32
1995-2000
2.36
Source: National Statistics Office
In terms of magnitude, the number of poor increased slightly from 26.7 million in 1985 to 26.8 million in 1997 but registered a sharp increase to 30.8 million in 2000. Meanwhile, income inequality has not improved over the last 15 years. The share of the poorest quintile has, in fact, decreased from 4.8 percent in 1985 to 4.7 percent in 2000 while the share of the richest quintile has increased from 52.1 percent to 54.8 percent over the same period. In terms of human development indicators to suggest the level of living standards of the population, there have gener-
July - August 2003
ally been improvements in different dimensions. Significant improvements, for instance, have been seen in the educational status of the population. Simple literacy rate has gone up from 90 percent in 1989 to 94 percent in 1994. Functional literacy rate also increased from 75 to 84 percent over the same period. In the area of health, improvements were also evident as life expectancy went up from 56.9 years in 1975 to 66.6 years in 2001 for males and from 59.9 years in 1975 to 71.9 years in 2001 for females. Infant and child
In 2002, the National Statistical Coordination Board adopted a new methodology for estimating the poverty lines. While the national trends are the same, the estimates based on the new methodology are lower than the ones based on the old methodology. The proportion of poor families was 28.1 percent in 1997 and 28.4 percent in 2000.
mortality rates have likewise declined significantly even as disparities still remain very high among regions. As to the population's nutritional status, improvements were also registered, albeit modestly, with malnutrition prevalence among 0-5 year-old children declining by only four percentage points over an 11-year period. Compared to some of its neighbors in the region, the Philippines has the highest poverty incidence based on the US$1/day criterion adopted by the World Bank for international comparison. It has, however, per-
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DEVELOPMENT RESEARCH NEWS
Compared to some of its neighbors in the region, the Philippines has the highest poverty incidence based on the US$1/day criterion adopted by the World Bank for international comparison. It has, however, performed well in the areas of nutrition, literacy, health and education ...
formed well in the areas of nutrition, literacy, health and education although it has lagged behind in terms of population growth rate. Thailand’s annual population growth rate for the period 1995-2000, for example, is one percent while the Philippines posted a 2.36 percent rate for the same period. On the whole, the different indicators show that the Philippines has been generally successful in improving the quality of life of its population in the period 1985-2000. There have been improvements in various aspects, some large and some modest. Regional disparities, as may be gleaned in the following section, though, remain and for some indicators, have even widened. The high population growth rate has also not been addressed and has, in fact, led to an increase in the magnitude of the poor. Who and where are the poor? As earlier mentioned, poverty incidence still continues to be high in certain regions and provinces. In 2000, poverty incidence was highest in the Autonomous Region of Muslim Mindanao (ARMM) where almost 66 out of every 100 families can be considered poor. In contrast, 9 out of every 100 families in the National Capital Region (NCR) can be considered poor (Table 3). While
July - August 2003
ARMM has the highest poverty incidence, its contribution to total poverty is only 5.5 percent owing to the small population in this region. The Bicol region has the largest contribution at 11.8 percent.
over a 15-year period from 1985 to 2000, rural poverty incidence declined by only four percentage points. With regard to occupational groupings, families engaged in agriculture have the highest poverty incidence at 55 percent; the level declined by only 1.5 percentage points over a 15-year period. Poverty incidence, on the other hand, is lowest among families headed by professional, technical and related workers at 5.9 percent (Table 4).
The differences are even more evident at the provincial level. Sulu in ARMM has the highest poverty incidence at 72.7 percent. Masbate province from the Bicol region is next at 70.1 percent. Romblon in Southern Tagalog ranks third at 69.3 percent. All of the cities in the National Capital Region (except Caloocan, Navotas, Marikina, and Taguig/Pateros), Batanes and Bulacan, meanwhile, have less than 10 percent poverty incidence. As mentioned earlier, too, the poverty gap between urban and rural areas has been increasing. While the poverty incidence in the urban areas has declined by 14 percentage points
In terms of subsistence incidence or the proportion of families who do not have adequate income to meet their basic food needs, the proportion has declined from 24.4 percent in 1985 to 16.7 percent in 2000. Again, the ARMM and Bicol Region registered the highest subsistence incidence at 35.5 and 34.1 percent,
Table 3. Poverty incidence of families by region, 1985-2000 Region
Poverty incidence 1985
1988
1991
1994
1997
2000
35.5
31.8
33.7
Philippines
44.2
40.2
39.9
NCR
23.0
21.6
13.2
8.0
6.4
8.7
1 – Ilocos
37.5
44.9
48.4
47.9
37.8
37.1
2 – Cagayan Valley
37.8
40.4
43.3
35.5
32.1
29.5
3 - Central Luzon
27.7
29.3
31.1
25.2
15.4
18.6
4 – Southern Tagalog
40.3
41.1
37.9
29.7
25.7
25.3
5 – Bicol
60.5
54.5
55.0
55.1
50.1
55.4
6 – Western Visayas
59.9
49.4
45.3
43.0
39.9
43.1
7 - Central Visayas
57.4
46.8
41.7
32.7
34.4
38.8
8 - Eastern Visayas
59.0
48.9
40.1
37.9
40.8
43.6
9 - Western Mindanao
54.3
38.7
49.7
44.7
40.1
46.6
10 - Northern Mindanao
53.1
46.1
53.0
49.2
47.0
45.7
11 - Southern Mindanao
43.9
43.1
46.2
40.3
38.2
40.0
12 - Central Mindanao
51.7
36.1
57.0
54.7
50.0
51.1
CAR
-
41.9
48.8
51.0
42.5
36.6
ARMM
-
-
50.7
60.0
57.3
66.0
Note: There is no official poverty threshold for CARAGA. Thus, the provinces of CARAGA are grouped with Region 10 (Agusan del Norte, Agusan del Sur and Surigao del Norte) or 11 (Surigao del Sur). Source of basic data: Family Income and Expenditures Surveys, 1985 – 2000, NSO
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DEVELOPMENT RESEARCH NEWS
July - August 2003
Table 4. Poverty incidence of families by occupation of the household head, 1985-2000 Region
of the poor but also of the nonpoor to macroeconomic crises and natural calamities. In 1997, 31.4 percent of the families were poor.
Poverty incidence 1985
1988
1991
1994
1997
2000
Total Poor Families
44.2
40.2
39.9
35.5
31.8
33.7
Not specified
50.3
29.0
46.7
48.6
-
-
Professional, Technical and Related Workers
9.6
14.7
11.8
10.6
6.7
5.9
Administrative, Executive
6.0
4.1
6.4
7.4
5.3
10.8
Clerical and Related Workers
18.4
14.8
12.0
8.2
8.0
9.4
Sales Workers
31.4
23.8
24.0
18.1
15.5
17.0
To assess how shocks such as the Asian financial crisis and abnormal weather phenomena affect the poverty situation in the Philippines, it is important to distinguish between chronic and transient poverty based on movements of the population in and out of poverty.
and Managerial Workers
Service Workers
40.1
32.9
32.8
19.2
18.7
18.2
Agricultural, Animal Husbandry and Forestry
57.0
53.9
55.8
55.9
50.0
55.5
42.1
37.4
32.9
26.8
23.9
33.8
Other Occupations not Classifiable
59.7
17.2
14.5
8.2
9.4
26.5
Armed Forces
16.0
5.9
7.4
17.2
3.8
10.7
-
34.6
-
41.8
44.3
29.2
28.0
26.1
25.0
20.6
17.6
19.4
A panel dataset of 17,897 households from the National Statistics Office’ 1997 Family Income and Expenditure Survey (FIES) and the Annual Poverty Indicators Surveys (APIS) in 1998 and 1999 were used to determine the proportion of chronic and transient poor in the period 19971999. For purposes of this paper, chronic poor is defined as those who were poor in 1997, 1998 and 1999 (PPP) while the transient poor are those who were nonpoor in 1997, then poor in 1998 and nonpoor again in 1999 (NPN). Out of this set of information, it would be instructive to find out who recover easily from a shock (NPN), those who take longer to recover (NPP), those who are able to take advantage of the
Workers, Fishermen and Hunters Production and Related Workers, Transport and Equipment Operators
Nongainful Occupation Unemployed
Source of basic data: Family Income and Expenditures Surveys, 1985-2000, NSO
respectively. These figures indicate that one out of every three families in these regions do not have enough income to meet their basic food needs. NCR has the lowest subsistence incidence at 1.5 percent followed by Central Luzon at 4 percent. Meanwhile, access to education oftentimes provides a way out of poverty. Numbers point out the truth. Three out of every five families whose heads did not attend school are poor while only two out of every 100 families headed by a college graduate are poor (Table 5). Over time, the incidence of poverty has declined for the latter while it has increased for the former. This indicates that it is becoming more difficult for those who had no schooling to earn enough to become nonpoor.
Chronic vs. transient poor Moving in and out of poverty The recent experience of the Philippines has shown that it is possible to wipe out gains in poverty reduction with a major crisis. This highlights the vulnerability not just
Table 5. Poverty incidence by highest educational attainment of the household head, 1985-2000 Highest educational attainment of household head
Poverty incidence 1985
1988
Poverty Incidence
44.2
40.2
39.9
No Grade
55.9
47.3
55.8
Elementary Undergraduate
57.2
54.1
Elementary Graduate
51.6
49.6
1st-3rd Year High School
46.5
High School Graduate
31.6
College Undergraduate At least College Graduate
1991
1994
1997
2000
35.5
31.8
33.7
55.2
52.5
60.5
53.2
50.7
48.6
45.2
48.7
43.6
39.8
26.0
40.5
43.1
35.3
33.2
11.9
29.3
29.6
23.6
21.0
18.2
17.0
17.9
16.2
11.7
10.9
10.3
6.5
4.4
4.0
4.0
2.4
2.5
Source of basic data: Family Income and Expenditures Surveys, 1985-2000, NSO
DEVELOPMENT RESEARCH NEWS
situation (PNN) and those who are able to protect themselves from the shock (NNN). See Figure 1 for the movements of families in and out of poverty within the period. Using unweighted data, 46.4 percent had remained unaffected by the shocks and remained nonpoor throughout the three years from 1997 to 1999. On the other hand, 21.7 percent had remained poor or chronic poor throughout the period.
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July - August 2003
Figure 1. Movements in and out of poverty 1997
1998
9580 (53.5%)
administrations in the country appear? 1999 8303 (46.4%) 1277 (7.1%)
12285 (68.6%) 2705 (15.1%)
1154 (6.4%) 1551 (8.7%)
1066 (6.0%) 5612 (31.4%)
488 (2.7%) 578 (3.2%)
The 1950s was focused on enhancing economic growth in the hope that the trickledown effects will reduce poverty. Since the 1970s and 1980s, though, there has been a conscious shift in the development effort toward achieving poverty reduction and income equality. The urgency in addressing macroeconomic stabilization and adjustment issues in the 1980s, however, derailed some of the poverty alleviation policies and programs during that period.
Across regions, the chronic 665 poor are concentrated in (3.7%) 4546 The Marcos administration Southern Tagalog, North(25.4%) Four-year development plan 1971ern Mindanao, Western 3881 1974 (21.7%) Visayas, the Autonomous Ferdinand Marcos prioriRegion of Muslim tized maximum economic Note: Mindanao (ARMM), and Poor Nonpoor growth and stability, equiBicol Region. In terms of The percentages refer to the share of the population subgroup to the total table distribution of income percentage to total number number of households in the panel dataset. Thus, the percentages for each and wealth and solving the year add up to to 100%. of sample households, the problem of unemployment. incidence of chronic However, the plan did not poverty is highest in the mention any major antipoverty The chronic poor, transient poor ARMM, Central Mindanao, Bicol, strategy although it included the and the never poor have telltale Northern Mindanao and the Cordilareas of population and family characteristics. In terms of educalera Autonomous Region (CAR). planning, employment promotion, tional attainment, the chronic poor land reform, access to water, educaThe distinction between chronic and put in an average of 7.27 years while tion, housing and health. There was the never poor has an average of transient poor has important policy also no mention of any specific 13.04 years. Improving access to implications because some of the target for poverty reduction. education for the poor is thus an interventions needed by the chronic important policy instrument in the poor are different from those fight against poverty. With regards to Four-year development plan 1974-1977 needed by the transient poor. As The plan is quite similar to the family size, the nonpoor have a such, it should be noted that differprevious one but intensified social smaller family size while the poor ent strategies are called for in have a larger family size. This finding welfare and community development dealing with the conditions of the programs in order to allow the notsuggests that the country’s populapoor. The interventions needed for so-fortunate people to become useful tion management policy plays a the chronic poor require instrumembers of the society. ments or measures that help increase critical role in the fight against poverty. their human and physical assets Philippine Development Plan 1978-1982 while in responding to the needs of The Philippine government administhe transient poor, what may be The main focus at this time was trations' fight against poverty called for are insurance and income toward the achievement of a better In view of the above, how does the stabilization schemes which protect quality of life. To achieve this, the record of fighting poverty by the households against manmade or administration concentrated on the various political leadership and natural shocks. promotion of social development
DEVELOPMENT RESEARCH NEWS
and social justice. Thus, the government’s planned activities focused on the creation of jobs, reduction of income disparities, and improvement of the living standards of the poor. Still, it did not mention any specific target for poverty reduction. Philippine Development Plan 1983-1987 The country’s major national goals under this plan were the attainment of sustained economic growth, equitable distribution of the fruits of development, and total human development. For each goal, the government has adopted specific policies and strategies.
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rural poor. Planned activities included physical infrastructure, enhancement of social services delivery, agrarian reform and decentralization. The government’s poverty reduction target for 1992 ranged between 46.1 to 49.3 percent. The Ramos Administration Medium –Term Philippine Development Plan (MTPDP) 1993-1998 Human development and improvement of the quality of life were the focus of Fidel Ramos’s economic development efforts. His stratgey included people empowerment, acceleration of global competitiveness and reinforcement of a mutual relationship between the two. With
July - August 2003
The Estrada Administration Medium-Term Philippine Development Plan (MTPDP) 1999-2004 Joseph Estrada adopted the Lingap Para sa Mahirap program as his administration's centerpiece program in combating poverty. Using the Total Family Approach, the administration formulated policies that promoted community and center-based gender sensitive social welfare interventions for the poor, vulnerable, and disadvantaged including children, youth, women and persons with disabilities, among others. The adminisration also aimed to reduce poverty incidence from 32 percent in 1999 to 25-28 percent in 2004.
The Aquino administration Philippine Development Plan The Arroyo Administration 1987-1992 Medium-Term Philippine DevelopTo support the goals of ment Plan (MTPDP) 2001-2004 Human development and improvement of the poverty alleviation and The present administration of quality of life were the focus of Fidel Ramos’s promote an equitable Gloria Macapagal-Arroyo economic development efforts. His stratgey distribution of benefits, the prioritizes macroeconomic administration of Corazon stability with equitable growth included people empowerment, acceleration of Aquino implemented an based on free enterprise, global competitiveness and reinforcement of a employment-oriented, ruralagriculture and fisheries mutual relationship between the two. based development strategy. modernization. It also focuses It sought to turn the country on the importance of social toward the attainment of equity, comprehensive human agricultural development and development and protection people empowerment as the key employment generating industries. of the vulnerable, good governance strategy, he implemented policies to The government thus launched the and rule of law in the fight against achieve a sustained development, Community Employment and poverty. namely, decentralization; deregulaDevelopment Program (CEDP) to To alleviate poverty, the government tion; reliance on private sector; generate one million jobs within an has adopted the following programs: encouragement of cooperatives; and 18-month period beginning July the removal of bureaucratic hin1986. Aquino's government focused ) Develop and implement drances and penalties to small on the rural areas and part of the the government’s banner proenterprises. planned activities was the construcgram for poverty reduction, the tion of smallscale, labor-intensive Kapit-Bisig Laban sa Kahirapan Ramos launched the Social Reform infrastructure projects. Poverty (KALAHI), a comprehensive and incidence was 59 percent in 1985 and Agenda in 1994 as his integrated convergence strategy this was targeted to be brought down administration's integrated national to improve delivery of services for action agenda on antipoverty. Most to 45.4 percent in 1992. the poorest municipalities and of the administration’s programs Philippine Development Plan Updates provinces in the country; were institutional in nature and 1990-1992 ) Assist local government would require years to feel the fruits The Plan’s main objective was the units in preparing local poverty of labor. The Ramos administration’s total development of the human action programs that will assess goal was to reduce poverty from 39.2 being and the main strategy to the poverty situation in their percent in 1991 to 30 percent in alleviating poverty was to uplift the respective localities and identify 1998.
DEVELOPMENT RESEARCH NEWS
services needed to alleviate poverty in their area; ) Improve efficiency and effectiveness of the use of public funds in targeting the poorest groups in society by reviewing affirmative actions for vulnerable groups; and ) Develop mechanisms to involve the private sector actively in the provision of services and other assistance to the poverty areas.
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belong to the poorest quintile while 44.9 percent belong to the richest quintile. The scenario is similar in 1999 with the richer quintiles able to benefit more from government programs on housing and education. Only two percent of the beneficiaries of tertiary scholarship programs belonged to the poorest quintile. A smaller percentage of the poorest quintile received assistance through
The final version of the Arroyo adminstration’s MTPDP does not mention any target for reducing poverty incidence.
July - August 2003
poverty reduction program. One specific example is the 20 priority provinces that the government initially identified for the implementation of the Social Reform Agenda (SRA) during the Ramos administration. It turned out that only 11 percent of the poor were in these areas. On the other hand, the Lingap Program of the Estrada administration targeted to assist poor families in 78 provinces and 83 cities that they have identified. The process of
SVS
Upon closer look, poverty alleviation programs tend to be closely associated with a specific administration. Thus they become coterminous with the administration that initiated these programs. This practice of discontinuing programs identified with the previous administration is rather disadvantageous to the poor and puts into waste whatever gains were achieved from the previous programs. The things to do "Improvements in human development and poverty Undeniably, poverty is a persiscountry to still post a positive human development tent problem and its enormity needs significant resources to address it. Coupled with a budget deficit, it is thus important to government scholarships as against use targeted programs. However, private scholarships. Similarly, only available data show that some of our 7.5 percent of the poorest quintile programs are not well-targeted. were able to avail of housing and financing programs while 48 percent In terms of education and housing, of the richest quintile were able to for example, data have shown that access the same programs. the rich are benefiting more than the poor. Only 7.8 percent of the The problem of targeting is indeed beneficiaries in scholarships at the one of the major challenges faced by tertiary level come from the poorest government agencies tasked with quintile while 36.9 percent belong to reducing poverty, in particular the the richest quintile. The regressive National Antipoverty Commission nature of the subsidies is also evident (NAPC). Often, it is the precision or in housing financing programs. Only imprecision of targeting that deter8.9 percent of the beneficiaries mines the success or failure of any
reduction have made it possible for the index."
identifying the 100 poorest families in each locality, however, was dropped even before it was completed. The current KALAHI program of the Arroyo administration is using a modified scheme by including the following criteria in identifying priority areas, namely: (a) high poverty incidence, (b) presence of asset reform, (c) problem or large gap in asset reform program and (d) presence of vulnerable poor sectors. Communities experiencing or ✒ 12 recovering from a crisis or
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DEVELOPMENT RESEARCH NEWS
July - August 2003
Large
Three kids. One more is coming next month. Your mind fills up with questions: where do I find money to buy clothes? What about food? And their education?. Looking back when you gave birth to your second child, your monthly income hardly keeps up with your bills. Desperation wells up in your chest. Then you cry.
families
prone to poverty
This is not an unusual story.
A
ample, have lowered their TFR to 2.1 ccording to research, the Continuing high fertility rate is the and 2.6, respectively. number of poor increased primary reason for the rapid populafrom 4.6 million in 1985 to tion growth in the country. Total Looking into the different contra5.14 million in 2000. Only a few fertility rate (TFR) may have deexperienced improvement in their clined from 6.0 in the 1970s to 3.6 in ceptive practices of the poor and nonpoor (Table 3), Orbeta pointed economic condition and these were the 1990s but the decrease is still out that because contraceptive mostly from the urban areas (Table considered slow compared to East practice is an indication of the extent 1). There is a wide disparity of and Southeast Asian standards. of control over fertility, the poor poverty incidence across the regions; Thailand and Indonesia, for exhave lesser control 66 percent in the Autonoover their fertility mous Region of Muslim Table 1. Poverty incidence of families, urban-rural, 1985-2000 compared to the Mindanao (ARMM) and nonpoor. This is 55 percent in Bicol Region Poverty incidence because access to compared to only 9 1985 1988 1991 1994 1997 2000 contraceptive percent in the National instruments and Capital Region (NCR). Philippines 44.2 40.2 39.9 35.5 31.8 33.7 practice is uneven And in most cases, poverty Urban 33.6 30.1 31.1 24 17.9 19.9 between the poor incidence is more proand the nonpoor, nounced in families with Rural 50.7 46.3 48.6 47 44.4 46.9 with the latter more children (Table 2). enjoying a Source of basic data: Family Income and Expenditure Surveys, 1985-2000; better access. ✒ 10 The question is: Do poor Table 7, Reyes (2002) people choose to have large families? Dr. Aniceto Orbeta, senior research fellow at the Philippine Insttute for Development Studies (PIDS), pointed out in his paper “Population and Poverty: A Review of the Links, Evidence, and Implications for the Philippines” that there may be conceptual and practical reasons that the poor may prefer large families. The commonly mentioned reasons include the following: a) a larger number of children increases family income; b) they provide old-age security to their parents; c) identified benefits from fewer and better– educated children are a remote possibility.
Table 2. Poverty incidence by family size, 1985-2000 Family size
Poverty incidence 1985
1988
1991
1994
1997
2000
National
44.2
40.2
39.9
35.5
31.8
33.7
1
19.0
12.8
12.7
14.9
9.8
9.8
2
20.0
18.4
21.8
19.0
14.3
15.7
3
26.6
23.2
22.9
20.7
17.8
18.6
4
36.4
31.6
30.1
25.3
23.7
23.8
5
42.9
38.9
38.3
31.8
30.4
31.1
6
48.8
45.9
46.3
40.8
38.2
40.5
7
55.3
54.0
52.3
47.1
45.3
48.7
8
59.8
57.2
59.2
55.3
50.0
54.9
9 or more
59.9
59.0
60.0
56.6
52.6
57.3
Source of basic data:
Family Income and Expenditure Surveys, 1985-2000; Reyes (2002)
DEVELOPMENT RESEARCH NEWS
Table 3. Differential family planning practice by socioeconomic class
10
has been one of the familiar explanations to Source Poor Nonpoor Total East Asia’s high Contraceptive prevalence economic growth FPS 2000a phenomenon in Modern 26.3 35.0 32.3 the past two Traditional 13.9 15.1 14.7 decades. However, Any method 40.1 50.1 47.0 in the Philippine setting, the APIS 1998b 40.5 46.2 44.1 continuing high APIS 1999b 33.7 37.0 35.8 fertility rate will mean long years of Access to family planning services high youth APIS 1998b 85.2 90.7 88.7 dependency. This APIS 1999b 89.1 93.1 91.7 is in contrast to countries in East Note: FPS - Family Planning Survey; APIS - Annual Poverty Indicators Asia which have Survey achieved low a socioeconomic status is based on a score derived from questions about youth dependency housing convenience/durable goods b ratio in the last socioeconomic status based on income deciles: poor - lowest 40%; nonpoor -highest 60% two decades and are perfect examples of the positive effect of more workers to the Link between population growth and economy. development Population change usually follows three stages. In the first stage, Philippines vis-à-vis Thailand population growth rises because Nowhere is this situation more mortality rate declines while fertility evident than the comparative paths rate remains high. Youth depenthat the Philippines and Thailand dency ratio is high. have achieved in the past four decades. For one, with regards to In the next stage, fertility rate falls growth performance of Asian and mortality rate settles at a low countries, the Philippines currently level, thereby resulting in the start of lags behind Thailand. a decline of the population growth. Youth dependency ratio also starts to However, in 1965, both countries go down. had about the same population size and Thailand even had a lower per In the final stage, both fertility and capita income. In 1965, both counmortality rates are low and remain tries had about 31 million populalow, leading to low population tion, with the Philippines having a growth. High old-age dependency per capita income of US$801 and ratio accompanies this stage and Thailand, US$566. youth dependency starts to decline. Four decades later, the Philippines’s Only in the latter two stages when population reaches 76.5 million the increasing proportion of ecowhile Thailand has 62.8 million. The nomically active population is country’s per capita income stands at achieved, can there be a window of US$1,167 while Thailand has almost opportunity for spurring economic twice the figure at US$2,085. Moregrowth. This is known in the literaover, Thailand’s population is ture as "demographic bonus." This growing at less than 1 percent while
July - August 2003
the Philippines is still growing at more than 2 percent. The difference in the two countries’ path to development has much to do with the the divergence in the fertility rates. Thailand has been able to bring down its TFR to around 2.1 percent while the Philippines is still struggling at around 3.6 percent. Population and poverty Studies continue to lament the slow growth of employment opportunities in the Philippines. This is further supported by high open unemployment and underemployment rates that did not spare even educated workers. The continuing outflow of contract workers to other countries is a plain testimony to the lack of domestic employment opportunities. This situation clearly shows the Malthusian negative impact of rapid population growth on poverty via the distribution effect. For those who have no choice but to stay in the country, poverty and its associates are a common everyday experience. And with a bigger family, mothers decrease their labor market hours although this has no impact on the fathers’ labor market hours. The effect is on the older daughter who replaces the lost market time of their mothers. There are both supporting and opposing studies although one study stresses that young children decrease the mother’s market time and increase the fathers’ market time. What is even worse is that as the family gets bigger, older children who are still in school drop out of their classes to join the workforce so as to help augment the family income. The probability of working children is closely related to the number of young children. There are also empirical evidences that high fertility leads to decreasing
11
DEVELOPMENT RESEARCH NEWS
investments in education and health. The effect of population change on household welfare includes the following: (a) children in large families perform less well in school; (b) children in large families have poorer health, lower survival probabilities, and are less developed physically; and (c) impact on parental welfare is not clear. This is substantiated in another study (Lloyd 1994) which found the adverse impacts of having a large family, namely: a) resource dilution wherein each child gets a smaller share of the family resources, including income, time and maternal nutrition; b) opportunity effect by way of diminished access to public resources such as health care and education; c) the equity effect which means unequal distribution of resources among siblings; and d) the intergenerational effect with the adherence to the traditional role
affecting the transmission of opportunities to the next generation. There is growing evidence that a large family size makes it difficult for poor families to get out of poverty and causes nonpoor families to become vulnerable to financial problems or, worse, slide down to poverty. This proof emphasizes the need to have better fertility management as an essential component in any poverty alleviation package. Conclusion The preceding discussion implies the following: One, while high fertility may not be the only reason for the high incidence of poverty in the country, recent research nonetheless points to the important roles of demographic changes in development, in general, and in poverty alleviation, in particular. This should strengthen
"[That current fertility choices have intergenerational impact] requires a proactive stance through subsidy and better targeting of public services to improve the human capital investments of the poor to help stop intergenerational transmission of poverty."
GJE
July - August 2003
the resolve to include programs that aim to improve fertility management in the poverty alleviation packages. Two, there are indications that the poor’s family size is beyond their control considering that they have limited access to family planning and allied services. Three, current fertility choices do not only have current effects but have intergenerational impact. This situation requires a proactive stance through subsidy and better targeting of public services to improve the human capital investments of the poor to help stop intergenerational transmission of poverty. Four, Philippine economic growth is the primary contributor to the decline in poverty incidence. As such, sustained economic growth should remain as the primary strategy of development in the immediate term, with the lowering of inequality given the supporting role. And finally, there are enough justifications for the government to promote a small family as the norm and help couples achieve their desired fertility. â??
References King, E. 1987. The effect of family size on family welfare: What do we know? In Population Growth and Economic Development, Issues and Evidence by Johnson and Lee (eds.). Madison: University of Wisconsin. Lloyd, C. 1994 Investing in the next generation: The implications of high fertility at the level of the family. In Population and Development: Old Debates, New Conclusions by Cassen et al. (eds.). New Brunswick and Oxford: Transaction Publishers. Reyes, C. 2002. The poverty fight: Have we made an impact? PIDS Discussion Paper Series 2002-20. Makati City: PIDS.
DEVELOPMENT RESEARCH NEWS
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July - August 2003
Poverty from page 8
armed conflict and areas not included in major financial assistance projects are also included in the priority areas. Because official poverty statistics are available only at the provincial level and not at the municipal and barangay levels, the NAPC has to rely on local government units to provide the necessary information. The importance of having a poverty monitoring system at the barangay level is thus necessary in ensuring that the targeted programs are carried out. Local level statistics are necessary for national agencies to identify the priority areas while leaving the implementation to the local government units (LGUs) to reach the identified beneficiaries. To address the issue of costs, the poverty monitoring system can be integrated as part of the planning system of the LGUs. Data collection and analysis can be done by the LGUs in support of the preparation of their Annual Investment Plans. Conclusion and recommendations The poor have always been regarded as one group. Estimates in this paper show that only half of those classified as poor are chronic poor while the other half are transient poor. Specific policies can thus be adopted and specific programs implemented to target the chronic poor. Although population has been continually swelling up, improvements in human development and poverty reduction have made it possible for the country to still post a positive human development index. On the other hand, the vulnerability of the poor to crisis requires the setting up of social safety nets to avoid any adverse long-term impact of the crisis.
Terms to remember Poverty incidence is based on a comparison of income with a poverty threshold. Poverty incidence is the proportion of families/individuals whose annual per capita income falls below the poverty threshold. Poverty threshold refers to the minimum income required to meet food plus nonfood basic requirements. Subsistence incidence refers to the proportion of families/individuals whose annual per capita income falls below the food threshold. Food threshold refers to the minimum income needed to meet food requirements.
Economic growth was more dominant than the redistribution component in accounting for the decline in poverty incidence in the period 19852000. This emphasizes two things: that economic growth has not been that high during the period and that the nature of economic growth matters. A growth that benefits the poor and therefore has a large redistribution component can lead to a bigger poverty decline.
With regards to institutional arrangements, there have been significant institutional reforms. However, it takes time to set up new offices and establish relationships with existing agencies. Coupled with new personnel, this new set-up will affect the pace of new agencies to carry out their mandate. In addition, convergence—based on the experience of the SRA—is quite difficult to operationalize.
Lastly, there are issues in three major areas that need to be addressed.
And regarding poverty measurement and monitoring, available data from national surveys are not adequate to meet the information needs of both national and local policymakers and the program implementors.
In terms of poverty reduction programs, there is a noted lack of continuity in programs especially those that are identified with an administration. Some of these programs are not well-targeted. In addition, there is no monitoring and evaluation component in these programs such that either some of these programs have been implemented for a long time or dropped immediately without assessing their impacts on the poor. It is also important to identify programs that will specifically address chronic or transient poverty.
A community-based monitoring system therefore has to be institutionalized. This will provide the LGUs, particularly the local poverty reduction action offices, the needed tool to formulate, implement, and monitor poverty reduction programs and projects. This will also provide national agencies like the NAPC with the information base for choosing eligible barangays or households for programs like KALAHI. â??
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DEVELOPMENT RESEARCH NEWS
Making waste recycling work for Metro Manila By Ma. Eugenia Bennagen, Georgina Nepomuceno and Ramil Covar
M
etro Manila is notorious for its solid waste disposal problems—from the city’s infamous garbage dumps to its choked and polluted rivers. This situation leads one to think just how indifferent Metro Manila seems to be toward the problem and how its government is addressing the dilemma. In this regard, a study conducted by a team of researchers from the Resources, Environment and Economics Center (REECS) examined the attitudes and behavior of households in two middle-income barangays (subdivisions) in Metro Manila toward waste management and assessed what solid waste management programs should be designed and implemented in the area. Surprisingly, it found that households are generally willing to separate and recycle waste and that many already do so, particularly for newspaper. Given this situation, it should be possible for local government units (LGUs) to
This article appeared as EEPSEA (Economy and Environment Program for Southeast Asia) Policy Brief No. 2002PB3. Ms. Bennagen, Ms. Nepomuceno and Mr. Covar are from the Resources, Environment and Economics Center (REECS).
implement effective projects. In fact, a recent national waste management law has already provided the necessary framework. A garbage pile of trouble The study was carried out in the face of an impending garbage crisis. Manila generates more than 5,000 tons of solid waste per day—almost 75 percent of which comes from households. Waste segregation (separating plastic, paper, food scraps and so on) is not widely practiced and recycling of materials, except
July - August 2003
by informal door-to-door entrepreneurs, is minimal. Landfill sites are so poorly maintained that they pose health and safety hazards; as a result, two key sites were recently closed. Incineration is prohibited by law and open dumping is now the most common disposal method—a situation that endangers public health. To tackle the waste problem and its related concerns, the national government passed the Ecological Solid Waste Management Act of 2001. The act directs LGUs to divert 25 percent of the amount of waste from disposal into resource ✒ 14 recovery
DEVELOPMENT RESEARCH NEWS
activities over the next five years. It also gives local governments the authority to collect waste disposal fees to pay the costs of preparing and implementing solid waste management plans. This study also aimed to collect information that would help LGUs conform to the legislation. In the backyard dustbin Two cities in Manila with wellestablished waste management programs, Paranaque and Mandaluyong City, were selected for the study. Within each city, two representative barangays were chosen, one that practiced waste segregation and one that did not. Over 140 households were surveyed. Information on household waste management activities along with information on various socioeconomic issues were collected through a questionnaire. Households were also asked to estimate the weight of waste they generate in a day and the proportion of the waste that they recover, burn or dispose. A middle-class concern Respondents were limited to middleincome communities because the practice of waste segregation is still generally limited to such households. This meant that the results may not be applicable to the whole of Metro Manila. However, the study can still provide insights into the waste management of other middleincome communities in the metropolis. Focusing on specifics The study found that each household generates an average of 3 to 4 kilos of waste in a day (see Figure 1 for the composition of household wastes). Of this, about half is disposed (legally or otherwise), between 3 to 12 percent is burned, and the rest is recovered. Less than half
14
July - August 2003
Figure 1. Composition of household wastes, Metro Manila others 15%
paper 16%
glass and wood 9% plastic 15%
food/kitchen wastes 45%
others
glass and wood
food/kitchen wastes
of kitchen waste is reused as composting material. Because this comprises more than a third of total household waste, the study recommended that composting should be a key focus in any new waste management scheme. Burning household waste pollutes the air and waste management programs should particularly discourage this practice as well as highlight its implications on health. An analysis of the data showed that factors such as age, household size, time, the presence of a yard, the total amount of waste produced and the payment of a garbage fee, and the existence of a local ordinance affect the households’ waste management behavior. As to the importance of recycling aluminum cans and plastics, the study revealed that less than 50 percent of such wastes is recovered by middle-income communities. Paper-based waste (except for old newspapers, most of which are already being recovered) is also
plastic
paper
another potential area for increased waste recovery. To segregate or not to segregate Factors that prompt households to practice waste segregation include the households’ choice to keep their houses clean and free of pests (70%) and their awareness that it is good for the environment (60%). Among households that do not practice waste segregation, more than half said they do not have time to do so while 36 percent believed that there was no point in doing so because garbage collectors mix the waste they collect from households anyway (Table 1). Many households pointed out that a disciplined and active community will ensure a successful waste management program. When everyone else in the community participates, households do not feel that their individual efforts are futile. Over 20 percent of households also cited the need for an information and education campaign. ✒ next page
15
DEVELOPMENT RESEARCH NEWS
July - August 2003
While I was Board Chair at PIDS, I viewed the mission of
Canlas from page 16
PIDS to be one that would keep contributing to the body of knowledge in many social and economic policy areas such as design of the implementation arrangement or how to coordi-
regulation that will hold the government agenda in the 21st
nate with other government agencies because there is no such
century. I think PIDS was able to move that mission during
thing as a super agency. So we have to learn social interaction.
my tenure so I have no reason to complain. This is perhaps
We become a member of several interagency committees
largely due to the Institute’s research networking activities
where we translate policy implications into implementation
where it was able to collaborate with other think-tanks in the
design and draw the information structure between and among
university and government.
the different agencies in the committee. Gilbert was able to pick up some skills along those lines. Gilbert was very helpful
Let us therefore continue with this thrust so that we will have an institution where not just the fellows of PIDS are the
to me while I was at NEDA.
ones doing research but also other scholars brought together On another matter, PIDS continues to face many chal-
by projects sponsored by the Institute. This follows the vision
lenges in its role as a policy-oriented research organization. It
of Gerry [Sicat] to bring together a community of scholars
must add to the body of knowledge in areas where govern-
even from outside the Philippines to be working on some
ment has a warranted role.
policy issues that are of importance to the Philippine society and the region—Southeast Asia or the Asia-Pacific— as a
On the issue of government regulation, for instance, we
whole.
know that in some industries where competition by several small firms is not possible, the government must regulate after
Finally, thank you for making my stay at PIDS, even only
privatization has been completed. Otherwise, consumer
for a short period, a very rewarding experience with the help
wellbeing might be impaired if regulation is not done properly.
of my colleagues in the Board. ❏
Recycling from previous page
A question of time and money More than 60 percent of wastesegregating households are willing to pay a garbage fee in exchange for a dependable garbage collection system while 83 percent of nonsegregating households would be willing to pay a fee. In the communities that pay garbage fees, there is evidence that the current flat rate fees do not provide households an incentive to segregate. Because they Table 1. Reasons for not practicing waste segregation (in %) No time/inconvenient
53
No segregated collection
36
Not interested/not important
20
No space at home
19
It is expensive
9
Do not know how to segregate
5
are paying fees, households may feel they are already “doing their bit” and should not be expected to exhaust their time as well. The survey confirmed observations from earlier studies that time is an important factor in waste segregation and that, in particular, unavailability of the mother in a household can pose a significant constraint.
recommended that local governments investigate the possibility of charging variable waste collection fees (linked to the amount of waste produced). In addition, the study pointed out that a waste management program should stress the positive benefits of waste segregation and that programs should be made as convenient to the user as possible.
The presence of a backyard and the implementation of a local waste segregation ordinance were also big positive factors in determining whether a household composts and segregates its waste. A major obstacle to the proper implementation of waste segregation was the unreliable and inappropriate garbage collection services provided by LGUS to many households.
From a financial point of view, local governments should look at the Ecological Solid Waste Management Act as an opportunity to finance their solid waste management projects and achieve their waste diversion targets.
Putting together a waste management plan Based on the results of the study, it is
On the whole, the study observed that that there was sufficient civic mindedness to make a solid waste management program work. However, authorities need to provide suitable collection services if they expect households to do their part.❏
16
DEVELOPMENT RESEARCH NEWS
THE CORPORATE
News Canlas bids PIDS goodbye
July - August 2003
The Corporate News section includes brief accounts of inhouse PIDS activities, staff training and workshop results. It is intended to inform both the readers and PIDS staff members of the various activities participated in by the latter. There are stories that document the staff's effort to improve their knowledge and skills through trainings. Other stories highlight the personal interaction among the staff in the process of carrying out their individual tasks. Most of the time, the stories focus on serious matter while on certain occasions, they simply talk about the PIDS staff having fun. Whatever the topic is about, the objective is to show that each activity is meant to help the staff become better persons and performers in their respective fields so that they can contribute more to the attainment of the Institute's overall mandate.
congratulate Mario [Lamberte] for his leadership and able stewardship of the PIDS. And thank you for consenting to detail Gilbert [Llanto] at the NEDA while I was there. Is there a tension between being in government and being in the academe? It’s not really a tension but there seems to be
Dr. Dante B. Canlas holds a Doctorate degree in Economics from the University of the Philippines (UP-1978), the same university where he obtained his BS Mathematics degree in 1967 and MA Economics degree in 1974. His stint in mainstream government started at the National Economic and Development Authority (NEDA) as Deputy Director-General during the Ramos Administration from 1992-1998 and as Socioeconomic Planning Secretary and NEDA Director-General from January 2001 to December 2002.
a gap between things we do in the university and things that we have to do when we are in government especially when we are involved in policymaking. The gap, however, is not that unbridgeable. In the university, when we do research similar to what fellows do at PIDS, we theorize, we put empirical content to our models, and we discuss the policy implications but normally, we stop there. But once we join the government, we have to worry also about the
✒ page 15
As Chair of the PIDS Board of Trustees, he challenged the Institute to “continue its fine
Dr. Dante Canlas (left) receives a plaque of appreciation from PIDS founding father, Dr. Gerardo Sicat.
work in putting policy-oriented research in the service of constantly improving living standards of all Filipinos.” He might have said his goodbyes to NEDA and PIDS as director-general and board chair, respectively, but his return to the academe is, in essence, his return to the folds of the research community. Below is a condensed version of his speech during the farewell dinner hosted by PIDS in July 2003.
B
eing the chair of the PIDS Board of Trustees was a piece of cake. The
management and staff are so competent they made policies at the board level easy to do. I
For his colleagues at PIDS and the NEDA family, Dr. Dante Canlas expressed his pleasure at working with brilliant men and women.