PPP against poverty

As of March 14, 2013, Globalissues.org posted the latest tragic statistics on worldwide poverty.

• Over 3 billion people live on less than $2.50 a day.
• The GDP (Gross Domestic Product) of the 41 Heavily Indebted Poor Countries is less than the wealth of the world’s 7 richest people combined.
• Nearly a billion people entered the 21st century unable to read a book or sign their names.
• Less than one percent of what is spent every year on weapons can put every child in school.
• 1 billion children live in poverty: 640 million live without adequate shelter, 400 million have no access to safe water, and 270 million have no access to health services.
• As of 2003, 10.6 million children died before they reached the age of 5 (about 29,000 per day).

Philippine data are just as grim. The latest survey of the National Statistics Coordination Board (NCSB) in 2012 (done every 3 years) showed that as of the first half of the year, 27.9% of Filipinos were living below the poverty line, unable to meet the most basic needs of food, shelter and clothing.

It is disturbing that while the World Bank has noted that the number of people living in extreme poverty has declined in every developing region in the world from 2005 to 2008, the Philippines’ deprivation level has remained the same. 

Poverty alleviation efforts seem ineffective despite the impressive economic growth of close to 7% for the past years. Inclusive growth remains elusive.

According to the NSCB, the Autonomous Region in Muslim Mindanao (ARMM) ranked as the worst national region with poverty levels ranging from 42% to 47%. The lowest incidences of poverty were the National Capital Region (NCR), averaging around 3.9%. 

Poverty rates are well above 40% in 16 provinces. Lanao del Sur is the poorest province with poverty levels registered at 68.9%. The province with the lowest rate was the 2^nd district of the NCR with 3.1%. Manila, 1^st district of the NCR, had a 3.8% poverty rate.

The Aquino government is trying to break the generational cycle of poverty by granting Conditional Cash Transfer (CCT) to the poorest of the poor. But this has not been able to close the income gap significantly. Gains are also neutralized by disasters and population growth. Clearly the government could use some help.

Big business must pitch in

Harvard Business Review defined poverty as “poorly distributed wealth.” Nowhere is this more obvious than in the Philippines, which has been historically described as an oligarchy: where political and economic power rests in the hands of a few. 

The poorest quintile earns 6% of the country’s total income while the top 20% bring in 50%.

The 2012 CCT total budget accounted for only a quarter of the amount needed to eradicate poverty in the Philippines. The NSCB estimates that P159.6 billion ($3.72 billion) was needed for 2012, but the budget for the whole year was only P39.4 billion ($92 million).

In the 2014 Forbes list of the world’s wealthiest people, 11 Filipino billionaires were included. Their businesses covered a wide range of industries from retail, real estate, gaming and entertainment, banking, construction, food, hotels and restaurants. Their combined net worth amounted to $40.1 billion. Hypothetically, their wealth could fund the entire CCT program for the next 10 years and still have a few millions leftover!

The United Nations Development Program (UNDP) uses the Human Development Index (HDI), three-dimensions of capabilities to contextualize poverty. 

• Access to a long life. Measured by life expectancy at birth.
• Access to knowledge. Measured by mean years of schooling and expected years of schooling.
• Decent standard of living. Measured by per capita income.

This framework dovetails with the 3 primary strategies for poverty reduction: education, healthcare and livelihood.

According NSCB a family of 5 must earn P5,458 (US$126.93) a month to put food on the table every day. To include non-food needs like clothing, they must have a P7,821 ($181.89).

The UN Global Compact asks companies to embrace, support and practice 10 core principles:

Human Rights: 

• 1. Businesses should support and respect the protection of internationally proclaimed human rights
• 2. Make sure that they are not complicit in human rights abuses

Labor

• 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining
• 4. The elimination of all forms of forced and compulsory labor
• 5. The effective abolition of child labor
• 6. The elimination of discrimination in respect of employment and occupation

Environment

• 7. Businesses should support a precautionary approach to environmental challenges
• 8. Undertake initiatives to promote greater environmental responsibility
• 9. Encourage the development and diffusion of environmentally friendly technologies

Anti-Corruption

• 10. Businesses should work against corruption in all its forms, including extortion and bribery

It is in the interest of big business to invest in social marketing initiatives that alleviate poverty. It should be an integral strategy of business development, not just a token tax hedge masquerading as CSR.

Spreading the wealth creates new markets, lessens crime and fosters peace – all the elements needed to breed a thriving environment. Indeed, often a good deed is also a good deal. 

Besides, you can’t take it with you anyway…but the BIR can. – Rappler.com