Let's explore the reasons why the Philippines is poor and why it can't become wealthy.

today we're discussing why the Philippines has not been able to escape poverty the first Asian country to operate a national airline in 1941 the country that dispatched over 7,000 troops as support during the Korean War and the nation that played a leading role in the founding of the Southeast Asian Union oan as you might guess it's the Philippines until the 1970s the Philippines was considered a fairly prosperous and politically Advanced country it was known to be the second wealthiest nation in Asia After Japan until it faced downfall due to poor leadership it's even said that at one point South Korea looked up to the Philippines but was that really the case indeed during those times the Philippines attracted various International organizations and had a higher income than South Korea according to World bank statistics in 1960 the per capita income in South Korea was only $150 a while in the Philippines it was $263 more than $100 higher however this alone does not suffice to consider the Philippines a wealthy country it simply means that the Philippines was better off than Korea not that it was a rich Nation after the Korean war in 1960 South Korea was among the poorest countries in the world on par with the poorest Nations like Ghana and Sudan at that time the Philippines having gained independence from the United States in 1946 experienced growth in the manufacturing sector in the 1950s based on economic aid from the US unlike Korea which only had Human Resources the pH Philippines was rich in Mineral Resources like gold copper nickel Chrome and aluminum thanks to its mild climate and fertile land all year round it was also abundant in agricultural production including rice corn bananas sugar sugar cane and cassava yet the fact that the income disparity between Korea and the Philippines was not significant suggests that it is difficult to consider the Philippines as a prosperous country if we examine the per capita income of major Asian countries in 1960 Japan had 475 Singapore 428 and Malaysia 244 the claim that the Philippines was the second wealthiest country in Asia After Japan is false it was simply better off than the extremely poor Korea the Philippines has remained impoverished both then and now on April 10th 2019 the Philippines statistics Authority announced that a family of five needs about 10481 pesos roughly $187 per month to sustain living costs breaking it down the basic monthly food cost for a family of five was set at 7337 pesos with the remaining 344 pesos allocated for housing Health Care Transportation communication and other expenses this amount is closer to Bare survival than to a living wage one might argue that the cost of living is low because the prices are low but low prices also indicate a lack of national competitiveness the real issue however is that as of 2021 the poverty rate in the Philippines stands at 18.1% even the government's minimum cost of living which is already insufficient for actual living conditions in the Philippines is beyond the reach of about 20 million people who live on less than $181 a month lacking even the minimum for survival according to UNICEF 32% of children under five in the Philippines suffer from serious stunting due to malnutrition and 60% of the population never receives Medical Care throughout their lives since the term of former president Aquino the Philippines has seen economic growth rates of around 7% annually which has improved the situation somewhat however this growth has largely been driven by increased investment in infrastructure and doesn't necessarily reflect real economic growth as experienced by the general populace in fact the actual economic growth felt by ordinary citizens is nearly zero with no noticeable improvements in their lives moreover the Philippines suffers from extreme economic monopolization by specific families with the top 5% Elite controlling most of the nation's wealth this has led to one of the most severe cases of wealth disparity in the world even as the economy grows the benefits are predominantly reaped by the top 5% while ordinary citizens face increasingly severe financial difficulties this is due to the rise in prices of consumer goods and public services compared to wages the severity of the wealth Gap in the Philippines is well Illustrated in a report written in 2019 by Philippine congressman Joey Sala out of 23.7 million households 2.9 Million are in poverty 8.4 million are lwi income and 7.6 million are lower middle class making a total of 18.89% households that are either impoverished or struggling there are 3.1 million middleclass households 1.2 million upper middleclass households 358,000 upper class households and 143,000 Wealthy households which means only about 2% of all households fall into the upper income brackets the most critical issue here is the disparity the gap between the lower middle and upper classes in the Philippines is significantly more severe than in other countries with this 2% monopolizing the wealth even as the country experiences growth a substantial portion of the population continues to languish in poverty because of structural issues many Filipinos who receive higher education often seek employment abroad resulting in a serious brain drain the people who are smart and well educated those who should be starting businesses working and leading the future in the Philippines are leaving the country not only is there a brain drain but there's also a significant outflow of Labor even the poor often leave the Philippines to work as foreign laborers in any wealthy region around the world it's easy to find Filipino women for instance every weekend you can see thousands of women gathering in front of Hong Kong's Central Station most of these women are Filipinos who have come to Hong Kong to earn money by starting work as domestic helpers not just in Hong Kong but around the world the presence of Filipino women working as domestic helpers is so common that the Philippines is often referred to as the country of housemaids so why can't the Philippines Escape poverty especially considering it was more prosperous than Korea in the 1960s and had support from the USA the primary reason is its outdated political system in our modern world politics is closely related to the economic development of a country if politics and the economy were unrelated then country countries with abundant resources would automatically be ranked highest in terms of national competitiveness this means that no matter how good the infrastructure is or how plentiful the resources if the politics are in poor shape economic growth is difficult it's no exaggeration to say that all of the Philippines problems stem from its Politics the biggest economic issue wealth disparity or polarization is also a result of political corruption to understand how Philippine politics became so fractured we need to go back to the era when the Philippines was a colony of Spain in the late 18th century Spain introduced plantations in the Philippines focusing on tropical crops like sugar cane and coconuts to cover Colonial management costs with local resources this plantation system initially created a wealth concentration among the Philippine land owning class land owners would arbitrarily seize cultivated land and in collusion with bureaucrats impose taxes like land tax on Farmers which were meant for the bureaucrats as a result independent Farmers went bankrupt and their lands ended up in the hands of large land owners Spain was aware of the problem but chose to ignore it and even encouraged it from the colonial rulers perspective having power concentrated in one place made management easier and reduced the likelihood of resistance the Filipino people resented not the Spaniards but the bureaucrats who succumbed to money and the landlords who exploited them mercilessly the Philippines was aware of the problem that's why after gaining independence considerable efforts were made to abolish the landlord system and establish a system for independent Farmers the person who contributed most significantly to land reform is known as the Eisenhower of the Pacific a great Filipino leader Ramon mag born the son of a blacksmith Mages became famous for leading Guerilla forces against the Japanese during their invasion of the Philippines in World War II after serving as Secretary of National Defense he was elected as the seventh President of the Philippines in 195 3 also serving as the third President of the Republic of the Philippines during his presidential campaign mag seay famously declared the people must eat before I do and I would send my own father to jail if he broke the law earning widespread support from the citizens magay didn't just talk about eradicating corruption he actually put in a lot of effort to do so which made him very popular especially noteworthy was his successful suppression of the hook balap communist Insurgency restoring peace from civil unrest which earned him International Fame under magay starting with the Land Reform Act of 1955 his government pursued Land Reform progressively and continuously while implementing policies for the poor and underprivileged although substantial change was hindered by the landlord class which formed interest groups to oppose reform legislation magay himself maintained a reputation for personal Integrity he even renounced presidential privileges adopting the role of a mere Soldier and during his term he did not allow any benefits for his inner circle or family earning great respect with magay there was a belief that the Philippines remarkable development was just a matter of time the political system was functioning well and the economy was growing the Golden Age of the Philippines didn't last long on March 17th 1957 Ramon Maes died in a plane crash while returning from the southern island of Sabu leaving the Philippines suddenly without its leader at that time the people of the Philippines could not have anticipated what the future held losing mags they say was tragic but there was hope that another competent leader would emerge however it wasn't long before a dictator appeared toppling the foundation mag had built after president mag's death the Philippines entered a dark period under the dictatorship of President Marcos Marcos a successful lawyer was elected as the 10th president in 1965 with the nomination from the national eista party and remained in power for 21 years although his administration and initially implemented industrial and agricultural policies and attempted Land Reform it soon became Meed in corruption throughout his tenure Marcos was a typical dictator preoccupied with maintaining power and protecting the wealth of his family cronies and the elite the amount of money that Marcos and his family embezzled and transferred overseas during his tenure is estimated to be around $10 billion which was equivalent to the country's foreign debt at the time corruption and bribery became the norm to the extent that nothing could be done without bribes under marcos's rule landlords began to corporatize Beyond agriculture this era saw the beginning of what is called bureaucratic capitalism which involves politicians acquiring stakes in businesses and the intertwining of politics and business as a result a tiny number of landlord families dating back to the Spanish colonial era came to own all of the country's Industries ironically the power of these landlord families grew stronger with the introduction of voting rights in the Philippines the landlord class controlling the land exchanged votes for the minimum subsistence of the impoverished citizens this practice is known as patronage politics where politicians and voters exchange votes for their Mutual benefit essentially buying votes with money with most of the votes controlled by a few powerful families not only the president but also ordinary politicians were rendered powerless to speak against them wealth became more concentrated and poverty was passed down through generations there might have been a glimmer of hope if marcos's term had ended there but a year before his second term was to conclude in 1972 he declared martial law instead of stepping down thereby seizing complete control of the Philippines from the landlord's perspective having a compliant Marcos in power was not a bad thing Marcos banned political activities jailed political Rivals and journalists and used state power to suppress those who opposed his regime or challenged the powerful families this period marked by rampant human rights abuses is remembered as one of the darkest times in Philippine history meanwhile the national debt increased and the people found themselves living in a society even poorer than before then in 1983 the assassination of Senator Benigno Aquino Jr by marcos's regime led to a loss of public trust and sparked a wave of anti Marco sentiment this was compounded by the declining economy which had previously been growing the anti Marco's fervor spread rapidly leading to the people power movement a widespread protest against Marcos That Grew quickly finally on February 25th 1986 Marcos was ousted from the presidency and Corazon Aquino the Widow of the assassinated Senator Benigno Aquino Jr was elected president it seemed like the spring of the Philippines might return but once again nothing changed although the Filipino people successfully ousted a dictatorship and established a new president through the power of the people the elections in May 1987 resulted in the majority of legislative seats being filled by members of the landlord class leading to no significant change the majority of citizens traded their votes for short-term benefits rather than a vision for the future Decades of pervasive corruption and malpractice following the Marcos regime have arguably altered the national character of the Filipino people Filipinos live in a society where a corrupt social order is normalized there's a low sense of resistance and a belief that politics is reserved for certain families in fact if you look at Filipino politicians the names might change but the surnames often do not this is evident in the case of the current president the successor to duterte who rode on a wave of popularity with promises to wage a war against Crime tackle inequality and eradicate corruption is none other than Ferdinand bong bong Marcos Jr the son of the dictator Marcos after 36 years the family of the dictator has returned to power while it may seem illogical from the perspective of the Filipino people it can also be stood after president Marcos the Philippines transitioned to a democratic government but it failed to sever political business ties address past wrongs or achieve significant Economic Development given the circumstances an increasing number of citizens began to believe that the past was better leading to the Resurgence of the Marcos family from this discussion it becomes evident that the root cause is the failure of land reform you might wonder why is land reform so important comparing with other countries helps illustrate this point at the time Korea Taiwan and the Philippines were all poor unequal and plagued by corruption however at the time of its independence the Philippines had relatively higher per capita income and education levels compared to the other two the Philippines was ahead among the three yet it was Korea and Taiwan that successfully carried out Land Reform these countries dismantled the land aristocracy through successful Land Reform enabling citizens to engage in economic activities without being exploited productivity increased and the Surplus was reinvested in manufacturing or other Industries helping these nations break out of underdevelopment and Achieve economic growth indeed many economists cite Land Reform as a key reason for the post-world War II growth of East Asian countries however the Philippines failure in Land Reform led to the initial inequalities becoming institutionalized allowing a few powerful families to monopolize land industry and finance while land reform is a significant factor it's not the sole reason for the Philippines poverty the country is highly vulnerable to climate change and natural disasters due to its geographical characteristics Additionally the archipelagic nature of its territory comprising over 7,000 Islands complicates the development of a strong State and governance system the economy's heavy Reliance on services and foreign investment along with a small manufacturing sector is also problematic the Philippine economy is often described as having a small pie with a limited economic scale a lack of high value Industries weak manufacturing for exports and a Workforce that seeks opportunities abroad leaving few options for growth the primary way for developing countries to grow their pie is through exports bringing in foreign currency this has been successfully achieved by countries like South Korea Japan Taiwan and China which also explains South Korea's High export dependency most of the Philippines large Enterprise are focused on the domestic Market a direct consequence of the failed Land Reform considering the current global economic difficulties finding new Pathways for growth will be challenging for the Philippines especially since the most significant issues lie within the country's structural framework without significant internal changes it seems difficult for the Philippines to escape poverty

Channel: Life Hacks

Views: 1,722

Keywords: #PhilippinesPoverty, #SocioEconomicIssues, #PovertySolutions, #PhilippinesEconomy, #PovertyCycle, #EconomicDevelopment, #AsiaPoverty, #PovertyAndPolicy, #GlobalPoverty, #SocialInequality, #EconomicChallenges, #PovertyResearch, #DevelopingCountries, #PovertyAwareness, #FinancialEducation

Id: rxBRoZlocUU

Length: 17min 23sec (1043 seconds)

Published: Tue Mar 26 2024