More reforms needed to achieve poverty reduction goal–Neda

Business Mirror
by David Cagahastian - November 14, 2014

With less than two years before President Aquino steps down, the government’s priorities should focus on how to reduce poverty through employment, sustain reforms in the government, and lay the foundation for a more significant reduction of poverty, Socioeconomic Planning Secretary Arsenio M. Balisacan said on Friday.

At the annual meeting of the Philippine Economic Society, Balisacan cited the Aquino administration’s efforts against poverty, but acknowledged more needs to be done to achieve the goal of poverty reduction, the most known benchmark of which are the Millennium Development Goals (MDGs) of the United Nations which seeks to halve the incidence of poverty by 2015.

“Using national poverty lines, poverty headcount in 1991 stood at 34.4 percent. The MDG target is to bring this down to 17.2 percent in about 25 years. If only poverty decreased by at least 1 percentage point per year, then we would have more than achieved the MDG target. If poverty incidence is reduced by at least 2.1 percentage points every three years, then we would meet the MDG target. In 2006 we missed our target reduction in poverty by 3 percentage points; poverty incidence should have been at 24 percent instead of 26.6. If we reset the starting point to 2006, results show that we still missed the target poverty reduction by 2.3 percentage points in 2009; then resetting it to 2009, we still missed the target by 1.2 percentage points in 2012,” Balisacan said in his speech.

However, he said that in the first semester of 2013, poverty headcount stood 3 percentage points lower than the previous year, which meant that the country could have covered twice as much ground in reducing poverty for that one year period due to the high economic growth. Local output measured as the gross domestic product (GDP) averaged 7.2-percent growth in 2013.

Balisacan said the strategies against poverty are focused on three areas: job creation, government intervention, and building resilience among communities that are prone to disasters.

On job creation, Balisacan reported that the government has increased investments by improving on the country’s infrastructure which has long been a hindrance to the entry of foreign investments because of the additional costs that poor infrastructure can impose upon businesses.

The government seeks to increase infrastructure spending to at least 5 percent of GDP by 2016, amounting to around P836 billion.

“Under the Aquino administration, spending for infrastructure has been increased from 2.1 percent of GDP in 2012 to 2.5 percent in 2013, with the aim of raising it further to around 5 percent of GDP by 2016. The Neda [National Economic and Development Authority] Board has already approved P1.06 trillion worth of projects, including 23 PPP [public-private partnership] projects worth $11.73 billion. Eight of these PPP projects have already been awarded,” Balisacan said.

On government intervention, Balisacan said that the conditional cash-transfer program of the government has expanded its scope starting this year, covering now 4.09 million families. The cash dole-out program has a budget of P62.61 billion for 2014.

On building communities that are resilient to disasters, Balisacan reported that the government has invested in technology and equipment to more accurately predict where typhoons will strike, and have set up disaster-preparedness protocols to lessen the casualties during disasters. He added that the government will put priority during the next few months on income diversification and social protection to communities that are vulnerable to disasters. source

David Cagahastian