Bernardo M. Villegas
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How To Attain Inclusive Growth (Part 2)

          According to the World Bank study on Philippine poverty, the second driver of poverty reduction during the 2006 to 2015 period was government transfers, which contributed to about 25 percent of the reduction.  The national conditional cash transfer program, Pantawid Pampamilya (which we learned from the Brazilians during the time of former President Gloria Macapagal Arroyo), expanded rapidly during this period, and became the primary government social assistance program for the poor.  It extends emergency cash grants to 77 percent of poor households and contributes both to reducing poverty and to building human capital.  Estimates indicate that the program reduced the national poverty rate by up to 1.5 percentage points, lifting 1.5 million people out of poverty.  The Conditional Cash Transfer Program helped influence behavior change:  it improved school enrolment of older children, encouraged early childhood education, and increased the health-seeking behaviors of beneficiaries.  As a condition for receiving the cash grants, parents pledged to keep their children in school for a longer period.  This addressed the high attrition rate in the elementary schools, especially in the rural regions where the children are pulled out of school to help in farm work or because of sheer poverty.

         I remember debates during the Arroyo Administration when some critics considered the Program as a dole out that demotivated the poor people from exerting more effort to get out of poverty.  There were those who thought that the money could have been more productively channeled towards job creation or assisting the poor to start micro-enterprises.  I used to point out to the critics that very poor families are not able to meet their food threshold expenditures and are, therefore, not able to feed their children with the appropriate nutrients for their brains to develop.  We cannot wait for these families to find jobs or start small enterprises.  They need the money today to feed their children.  If not, these hapless kids will be forever handicapped in comparison to the children of the well to do because if they are not nourished properly today, their brains will be forever damaged in their adulthood.   The conditional cash transfer program kills two birds with one stone in improving human capital:  it prevents the stunting of brains of the children and the poor, while improving school attendance among them.

         The third driver of poverty reduction was remittances from domestic and foreign sources which contributed about 12 and 6 percent, respectively.    There are 15 million households (two thirds of the population) who received domestic or foreign remittances.  This stems from strong family ties that characterize the extended family system prevalent in the Philippines.  There is a sense of financial responsibility of a typical Filipino worker to support, not only the members of his nuclear family, but all relatives to the fourth and fifth degree of consanguinity.  Household helpers, drivers, gardeners and other service workers in the households of the urban areas usually are members of rural households who regularly send money to their relatives in the provinces.  Much larger remittances (already exceeding the equivalent of $30 billion in 2018) are sent by the Overseas Filipino Workers (OFWs) to their relatives back home.  Both transfer types have a significant contribution to the reduction of poverty (by up to 4 percentage points).  Domestic remittances make a greater contribution to the reduction of poverty because remittances from abroad, though much higher in value, are more common among the non-poor, i.e., the middle-income households.

           Very few people from those living below the poverty line can actually afford  to or even qualify for work abroad, which would require a minimum of a few years of high school education, not to mention financial resources to pay the recruiters.  The very poor have not even  graduated from grade school.  This suggests once more that the greatest service we can render to the very poor is to give their children access to quality basic education.  It is heartening to note that the 2018 government budget for education is P553 billion, which represented a 60 percent increase over the past three years.  There is no question that the Duterte Administration is not fixated only on Build Build Build program but is giving equal attention to investing in human capital.  It was providential that President Duterte was convinced to change his mind about “abolishing” the K to 12 which he had intended to do at the beginning of his Presidency.  This is one of  the many turn arounds in his views that show that he is really thinking  of the common good.  He has actually improved on the K to 12 by issuing two presidential directives which mandated drug education and the Alternative Learning System (ALS), which together with the IPED (Indigenous Peoples Education Program) can make education more inclusive.

         It is also very providential that the person at the helm of the Department of Education is Dr. Leonor Briones who has all the qualities and qualifications to make sure that the huge budget of the Department of Education is actually spent for the good of the poor Filipinos.  Her expertise combines public administration and finance.  She was one of the stalwarts in the School of Public Administration of the University of the Philippines, together with the late Dr. Raul de Guzman, the Philippine guru of public administration.  She was National Treasurer from August 1998 to February 2000.  She was Presidential Adviser  for Social Development with the rank of Department Secretary where she manifested her all-consuming desire to help the poor (the reason why she is sometimes unfairly labelled as a “leftist.”)  She is also very familiar with higher education, having been Chair of the Board of Trustees of the Silliman University, one of the best universities in the Visayas.   And most important of all, her integrity and honesty are unquestionable.  We should thank President Duterte for appointing her as the incumbent Secretary of Education.

         Now that the Government is leading by example in improving the quality of basic education—a most important measure in reducing poverty incidence—the private sector, both business and civil society, should intensify their efforts to invest in teacher training of public school teachers. Needless to say, the quality of education at any level is dependent on the quality of the teachers. There should be more initiatives like the Synergeia Foundation, headed by a leading economist-educator, Ms. Milvida Guevarra, and a favorite project of the late Washington Sycip, one of the founders of SGV.  Synergeia Foundation is very active in giving specialized training to public school teachers, especially in the remote regions in Mindanao and other impoverished territories, so that they can improve the quality of their teaching,  I also would like to give special tribute to the many CSR programs of such conglomerates as the SM Group, the Metro Bank Group, the  Bank of the Philippine Islands and other affiliates in the Ayala group, the Lucio Tan group, Megaword, Insular Life, the First Pacific group, and many others for furthering the interest of quality teaching in our public schools through all types of grants, awards and scholarships to teachers, especially in the public school system who we can consider as some of our heroes.  Also notable are initiatives of the private business sector to collaborate closely with leading technical schools like Dualtech in Canlubang and the Center for Industrial Technology and Enterprise (CITE) in Cebu in establishing high standards in the technical training of out-of-school youth and children of low-income families.  Among others, these two TESDA-certified technical schools have already produced thousands of technical workers in the electro-mechanical and Information technology occupations.  (To be continued).