Asia-Pacific, Philippines, Human Rights

Inequality in the Philippines: Roots, Implications and Opportunities

Past Presidents have claimed that in their regime or the other, certain legislations permitted the country to rise above inequality and the poverty line, thus the Philippines should no longer be called a third world, but a developing country.

This does not go alone with the claim that the country is also one of the fastest rising economies in Asia; however, if people are going to be asked, with the Philippine Peso amounting to almost 48 to one dollar, and with the prices of most commodities beginning to rise above what ordinary people can afford, these are mainly just political claims.

Inequality History

Before the domination of other races over the Philippines, people resorted to farming or to bartering goods. Old civilizations knew how to transact without money and the state of living seemed to be fair for all, until the Spaniards came and introduced classification according to social status. This is the reason why the concept of masters and peasants came about. So did the unequal division of wealth, especially ownership of lands dictates how a family would be financially. Then came the others and the country was devastated. Fields were exploited and destroyed, resulting in loss of income generating means for most Filipinos who relied heavily on agriculture. And these people made up more than half of the population. Technically recuperating from war, the Philippines becomes composed of what is now known as the 80℅ middle and lower class and the 20% upper class population.

After the destruction of lands, people who are not part of the elite found opportunities for living through buy and sell. During the Japanese regime, “Mickey Mouse money” was introduced to encourage the industry. This resulted in inflation and more and more people started losing personal lands thus resulted to hoarding and social unrest.

Post World War Philippines

There is indeed a noted growth when it comes to Philippine GDP. Since 2008 there has been an average growth of about 6% annually but the main reason economic advantages are not being felt by most Filipinos is that this national income growth is the result of investments from the elite sector comprising only of 20% of the population. Technically that is ordinary citizen earning an average of 8,000 ($167 USD) a month and the elites at least 100,000 ($2,092 USD). The gap between the rich and the poor is correlated using the Gini Index and the Palma ratio.

To stop income inequality, post-war Presidents from Garcia to Arroyo, introduced laws that a) placed a limit or a maximum on prices of commodities, b) limited wealth a family can own and c) ordered giving to the public owned land above 7 hectares but none of these attempts solved this problem.

When the people lost authority over their properties during war era, most of them underwent employment where income is based on skills an individual posses. Now this includes education. Being critical will show that poverty and unequal wealth distribution is the result of an unending cycle of lack of knowledge that leads to abuse and less opportunities.

The Reasons for Inequality

Other causes include corruption in the government which brings social unrest, limitation and theft of national budgets for public service and concern, unequal distribution of assets, and very little financial growth for non capital owners. In addition, the current constitution of the Philippines does not encourage 100% foreign ownership over an asset in the country limiting investors interested in working here, thus, less job opportunities for people.

However, most experts will also say that there actually is enough jobs for all but there is not enough number of qualified individuals. Again, that will be due to lack of education induced by limited income. And if ever there are jobs, salary rates among regions differ, even if prices of commodities is the same everywhere. In some places, minimum wage is about Php 250 (about $5 USD) per day.

This is the same reason why other factors that contribute to poverty is elevated. These are lack of stable jobs, malnutrition, education, and other unlawful activities. But what about the middle class, the people who have Bachelor Degrees and are employed? They can afford the simple luxuries and are able to maintain certain lifestyles but they suffer high income taxes. That is 32% of their monthly income which is 2% higher compared to what is taxed on corporations. In fact, income tax in the Philippines is the highest among all ASEAN countries. Aside from that, all commodities in the Philippines today are paid with an additional 12% on EVAT.

Probable Solutions to Inequality

A research on wealth disparity also pointed reasons and effects of this on the Philippine set up and has suggested improvements on the Philippine system that could possibly alleviate poverty, as stated in the Philippine MDG in 2015. These are the following:

– Revisiting of poverty framework and tackling over population;
– Reforming stakeholder and agency coordination for more efficient work;
– Focusing on poverty problems and
– Strengthening monitoring and evaluation in areas where projects on economic development are being implemented especially consistency in anti corruption activities.

Considering all of these, the wealth disparity and inequality in the Philippines are rooted in historical events and can probably take too long to be resolved, if possible, since the economy is controlled by 20% of the elites. Multi-million companies and corporations tend to be owned by a few families which also dictate how much of an employee can earn.

If everyone is serious about getting everything financially fair, some financial experts say the 1987 Constitution must be finally revisited since most legalities therein are no longer applicable to modern set up. However, this could also be the result of a fixed mindset. The Filipinos must also update their concept of financial security and be educated about savings, insurance, and investments, since Filipinos have misconceptions that investments are expensive and not for ordinary citizens. Aside from that, Filipino who wish to step out the poverty line must learn to venture on business and other opportunities instead of living on a limited monthly salary.

About Patricia Abrihan

Patricia has always been inspired by the witty yet innocent voice of Harper Lee’s To Kill a Mockingbird that she believes that writing is able to revolutionize ideas of society. She is a former college instructor from the Philippines and is currently a freelance writer and blogger managing her portfolio. She is open to collaboration and also loves reading and watching movies.

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