Thousands of Filipinos leave the country every day to seize better income opportunities and promise their children a better and secure future. Moreover, around five million of Filipino children are unable to go to school and are forced to work on the streets or in other various workplaces where they can find some food or other means to fill their appetites. Impacts on wealth and income and its distribution across different social divisions The country was having sound economic indicators before the 2008 economic crisis. Average income per capita was increasing while poverty incidence showed a onward trend.
Average income per capita rose by 2% in 2007 and 2008, whereas poverty incidence dropped from 33. 0% in 2006 to 31. 8% in 2007 and 28. 1% in 2008. Output growth plunged in 2009, causing real mean income to fall by 2. 1%, resulting in an upward pressure on poverty incidence (grew by 1. 6%). Most hit are households with associations to industry resulting in the average income to drop to levels below that of 2007. Similarly, wage and salary workers were hit significantly. Surprisingly, the poorest 20% did not suffer the same fate they suffered in crises past.
Clearly, the lobar economic crisis put a halt on the highly promising growth trend of the Philippine economy and forced 2 million Filipinos into poverty. IV. Responses to the Crisis The Philippine Economic Resiliency Plan of the national government To mitigate the effects of the crisis, the national government launched the Philippine Economic Resiliency Plan (ERP) which is a fiscal stimulus package of SUDS. 3 billion that consists of programs and projects based on continuing national government reforms and multi sector partnership efforts.
While there is as yet no available official assessment, it is perceived that the ERP has helped mitigate the impact of the crisis, particularly on employment, business, working conditions and labor management. The ERP provides for an expansion of the following social assistance programs: ; The ups or Panting Paying Filipino Programmer. The programmer provides grants to extremely poor households to improve their health, nutrition and education, especially for children aged from O to 14. Latest figures show that 70 per cent of the 1 million target households were reached as of November 2009. The Self- Employment Assistance Programmer or SEA-K. The Department of Social Welfare and Development (DEWS) administers this programmer. It provides the poor and disadvantaged sectors with access to credit and development opportunities. From January to August 2009, a total of 20,942 families (148 per cent of the target) benefited from the programmer. ; The Food for School Programmer. This programmer helps fight hunger and improve the school attendance of children. By November 2009, the Department of Education implemented 103. Per cent of its target, while the DEWS exceeded its target of 467,707 children as of June 2009. ; The Micromanage Lending Programmer of government financial institutions and government-owned or controlled corporations. A total of 556,844 new clients were served as of July 2009, which generated 312,648 new Jobs or 78 per cent of the target. Social security and Social security institutions in the Philippines have an important role in national economic recovery efforts, as described below: ; HEAD SUDS . Billion economic stimulus package. The HEAD is freeloading its lending programmer to support low- cost and other affordable government housing programmer. As of end-November 2009, total releases reached SUDS . Billion, exceeding the full-year allocation for housing and multipurpose loans. ; EPIC expansion of coverage and benefit increases. The government allotted an additional SUDSY. 2 million to expand the coverage of the EPIC to 4. 7 million families from the poorest 25 per cent of the population.
Local government units and the EPIC would share in the annual premium of SUDSY per indigent household. By March 2009, 3. 39 million of the targeted families were already covered. To ensure the financial protection of its members, the EPIC declared across-the-board increases in varying degrees in the benefit entitlements ender the programmer. Effective from 5 April 2009, inpatient care benefit ceilings have been raised such that the aggregate effect on annual benefit payments is expected to increase by 35 per cent.
This is the first time in seven years that programmer benefits have been increased, and is the most expansive increase since the start of social health insurance almost forty years ago. ; The ASS response. The ASS provided an additional SUDS 1 to each ASS pensioner as a one-time subsidy in September 2008. In March 2009, the ASS opened a SAUDI million emergency loan window for displaced workers. Qualified ASS members may borrow up to USDA from the fund and are given a 12-month grace period before the first amortization is due.
To provide temporary relief for financially distressed members, ASS has an ongoing amnesty programmer for “delinquent” short-term and housing loan borrowers. The government is exploring the possibility of offering unemployment insurance to retrenched workers, which would be funded by the government’s conditional cash transfer programmer. The proposal is for the ASS to provide affected workers with a monthly allowance of SUDS 11-222 for six months. Prospective inefficiencies should have paid at least 24 monthly contributions to be eligible for this benefit.
The ASS Investment Reserve Fund (RIFF) is being eyed as one of the principal sources to fund the government’s pump-priming efforts. The ASS is considering investing USDA. 8 million of its RIFF in government bonds to fund infrastructure projects. The ASS anchors its participation in the infrastructure component of the ERP on the conditions that there would be full government guarantee, that the ASS would be given priority over the revenues of the project, and that the amount invested loud not exceed 30 per cent of the ASS Investment Reserve Fund.
In addition, the ASS would look into securing a return higher than the 8 per cent indicative yield of a ten-year government bond. Efforts of poverty alleviation, reduction, eradication The Medium-Term Philippine Development Plan (MUTED) was implemented during the Ramose Administration and later on continued by the following administrations to help reduce poverty in the country and improve on the economic welfare of the Filipinos.
The Ramose Administration (1993-1998) targeted to reduce poverty from 39. 2% 1991 to about by 1998. The Stared Administration (1999-2004) then targeted to reduce poverty incidence from 32% in 1997 to 25-28% by 2004, while the Arroyo government targeted to reduce poverty to 17% by creating 10 million Jobs but Administration, the 2011-2016 MUTED is still being drafted.
Macroeconomic and Social Protection programs To respond to the recent financial crisis, the Philippine government, through the Department of Finance and National Economic and Development Authority (NEED), crafted a PH 330-billion fiscal package, formally known as the Economic Resiliency Plan (ERP). The ERP is geared towards the stimulation of the economy through tax cuts, increased government spending, and public-private sector projects that can also prepare the country for the eventual upturn of the global economy.
The implementation of ERP is spearheaded by NEED with the following specific aims: ; To ensure sustainable growth, attaining the higher end of the growth rates; ; To save and create as many Jobs as possible; To protect the most vulnerable sectors: the poorest of the poor, returning Offs, and workers in export industries; ; To ensure low and stable prices to supports nonuser spending; and ; To enhance competitiveness in preparation for the global rebound. Regional responses Poverty incidence remains to be one of the highest in the region with the continued low domestic private investment.
To overcome legal, political and institutional constraints, regional financial cooperation must be encouraged. The SEAN+3 financial cooperation can promote further the development of domestic financial markets to facilitate the intermediation of Asian savings within the region, as well as attract foreign investment. Such alternative sources of funding would reduce Sais’s alliance on foreign currency borrowing and along with, the risk exposure of the region to maturity and currency mismatches.
Moreover, the Network of East Asian Think Tanks has recently proposed the establishment of the Asia Investment Infrastructure Fund (Alfalfa) to prioritize the funding of infrastructure projects in the region to support suffering industries. The Alfalfa, as well as multilateral institutions especially the Asian Development Bank, also promotes greater domestic demand and intra-regional trade to offset the decline in exports to industrialized countries and narrow the development gap in the region.