"No wonder we have such a shaky economic foundation and a Jurassic agricultural system."
"No wonder we have such a shaky economic foundation and a Jurassic agricultural system."
Has the pandemic accelerated the fraying of Philippine society as we know it, where the rich get richer and the poor poorer?
This question is being asked by a number of people who were shocked to learn that almost half of the country's adult labor force are jobless — a record-high in eight years. The special July 3-6 Social Weather Stations found adult joblessness at 45.5 percent of the 60 million-plus adult labor force. This was a 28-point increase from the 17.5 percent recorded in December 2019.
The survey noted that half of the respondents lost their jobs or livelihood during the COVID-19 crisis with the estimated numbers of jobless adults hitting 27.3 million in July 2020, compared to 7.9 million in December 2019. These are defined as adults, 18 years old and over, who are jobless consisted of those who (a) voluntarily left their old jobs, (b) are seeking jobs for the first time, or (c) lost their jobs due to economic circumstances beyond their control.
I am not sure whether the survey included the thousands of OFWs who have come back home due to the pandemic, the majority of whom will probably remain jobless for some time. If not, that will make the scenario even grimmer for most Filipino families who depend on employed members for upkeep and sustenance. It can signal the demise of the kind of social contract upon which modern Philippine society has been founded after the long period of Spanish colonization. That contract has since metamorphosed into what many have come to describe as benign capitalism under the American regime, set back for a while during the Japanese occupation but which came back with a bang right after the declaration of independence from American rule in 1946.
For decades since the end of the Second World War, generations of Filipinos have come to live, albeit grudgingly, with the notion that the national class divide remains the norm. Somehow,
the notion was the rich will always be with us and that kind of situation will probably be tolerated for as long as the national wealth – the aggregate fruits of our common labor – will
in time, by active and judicious government action, be more equitably distributed through greater people participation in governance, an emancipatory judicial and labor system and enhanced social services.
That kind of social contract persisted for some time until the sixties, when a growing and more educated populace hungered for more and better participation in national life. That clamor for
a better life was fueled in part by agrarian and labor unrest, as the old hacienda and share-cropping system was no longer tenable at almost the same time that industrial peace was unravelling as capitalists increasingly denied labor its due while using union busting tactics to get workers on their knees. Those internal contradictions enhanced no end by external influences during the Cold War era which swept newly independent nations like the Philippines served to deepen the cracks in that social contract culminating in the declaration of martial law.
Somehow, martial law held the fraying in check for sometime as the old hacendero capitalist class was sidelined by a combined newly minted class dedicated to bringing about the best of the social order: A disciplined citizenry given more opportunities for growth and advancement under an agrarian reform and agricultural productivity program, an industrialization plan combined with export development, a more accessible banking system and a promise of participatory democratic governance. Well, that effort at revitalizing a more equitable and doable social contract run through the shoals of failed programs and the emergence of a new kind of capitalists, banking heavily on government-influenced wealth creation through access to the government banks, regulators and the global market with quotas for various good not just the regular sugar and coconut quotas of the old order. Although that arrangement somehow lifted a lot of sectors out of poverty, it was a patchwork under continuous bombardment as the old order clashed with the new one – a battle which ended with the return of most of the old order in 1986.
People had once again pinned their hopes for a more stable and sustainable social contract with the re-assumption of the old order capitalists with their adopted kins from the martial law years. That is now proving to be illusory as the bad practices of the old order got even more pernicious as it combined with the lingering notions of political connections and, get this, the corporate capitalist culture of the global capitalist class. It is now turning out to be a “suicide pact” as the laboring class was walloped into near-slavery status forcing millions into overseas jobs not as a matter of choice but survival while the capitalists took over the delivery of most basic services leaving government into a complicit, passive interlocutor instead of an active agent of an equity driven development program for growth.
For the period 2010-2016, for example, the country was touted as one of the Asian “rising tigers” with an impressive annual GDP rate of a little over six percent on the average. The problem is, as one study noted, most of that growth was captured at the top.
One estimate is that almost 80 percent of the incremental GDP growth during that period amounting to billions of dollars (not pesos) just went to forty families most of whom involved in the delivery of the most expensive basic services, i.e., water, electricity, communications and transport to name a few, in ASEAN if not in the Asia-Pacific. These same families ventured into land speculation and development, banking and other services leaving the very basic foundations of equitable and sustainable life such as agriculture and food security, health, education and training to the meagre resources of government and the tender mercies of the corporate capitalists.
In 2014, Forbes magazine reported that the richest families earned about 13 percent more, which translates to about $72.4 billion. If one computes the collective wealth of the Filipinos richest that year of $8.45 trillion, which is over half of the country’s GDP for the entire year at $16.6 trillion. Indeed, the gap between the rich and the poor in the Philippines is undeniable. It is a line drawn in screaming red, separating the prosperous and the penurious.
No less than World Bank Country Director Motoo Konishi advised that during the 2010–2011 fiscal year, the increase in the wealth of the richest families in the Philippines, amounting to 47.39 percent, comprised 76.5 percent of the GDP increase for that year. This simply showed that the benefits of economic growth did not trickle down to the poorer segments of the population, as seen with the malnutrition, and poverty that continue to plague the country despite the fact that the economy seems to be growing.
Another World bank study showed that the poorest 20 percent of the population only had a share of 4.45 percent of the national income. This shows that the distribution of wealth is uneven in the Philippines for the data shows that the poorest 20 percent earned P14,022 while the richest 20 percent, P176,863. Those earnings came mainly from what economists have come to describe as “rent seeking” and government influenced incentives and benefits.
No wonder we have such a shaky economic foundation relying heavily on services (BPOs, assembly jobs, tourism and OFWs) and a Jurassic agricultural production system for a good part of our growth. Not even our battle cry of Build, Build, Build can compensate for the hollowing of our industrial base as imports of even our most basic needs such as clothing and shoes continue to flood our markets. With the pandemic ravaging the entire planet, it is no wonder we have to suffer such a heavy loss of jobs and an even grimmer way of life for most Filipinos.