Economy, SONA 2011

SONA 2011: Making sense of Aquino’s facts and figures (part 1)

Activists burn the Penoy effigy, a symbol of the oppressiveness, incompetence, and subservience to the US of the Aquino administration during the SONA protest organized by BAYAN (Photo by Josh Castro)

Malacañang promised that this year’s State of the Nation Address (SONA) will present “undisputed facts and figures” instead of motherhood statements. President Benigno S. Aquino III did use a lot of numbers in his SONA speech (Read the full text) to underscore the supposed economic gains of the past year. But there were still motherhood statements and the usual “walang wangwang” rhetoric. The figures, meanwhile, are still disputable, carelessly used by his speech writers in an attempt to paint a bright picture of the present state and direction of the economy.

On hunger and poverty

Aquino cited as one of the gains of his government the decline in self-rated hunger from 15.1 percent in June from 20.5 percent in March. This is equivalent to one million families who no longer experience hunger, said Aquino. The figures are from the second quarter 2011 hunger survey of the Social Weather Stations (SWS).

But quarterly hunger surveys are sometimes volatile (e.g. self-rated hunger fell from 21.1 percent to 15.9 percent in Aquino’s first 100 days) so it is important to look at the long-term trend. In the first year of the Aquino administration, quarterly self-rated hunger averaged 17.4 percent. During the nine years of the Arroyo government, it averaged a lower 14.58 percent and just 9.96 percent under deposed President Joseph Estrada. These numbers indicate that the country is still on the path of worsening hunger.

Malacañang, through Presidential Communication Operations Office Secretary Sonny Coloma, has earlier attributed the decline in self-rated hunger to Aquino’s conditional cash transfer (CCT) initiative or the Pantawid Pamilyang Pilipino Program (4Ps), a poverty alleviation measure first started in the country by Gloria Arroyo. In his SONA, Aquino boasted that the 4Ps has already registered 2 million families as beneficiaries, of which 1.6 million are already receiving the cash grant. This means, according to the President, that more than 100,000 families are being saved from the clutches of poverty (naiaahon sa kahirapan) every month.

If this is true, then the Aquino administration can reduce by 2.3 million – the target number of CCT beneficiaries by the end of 2011 – the number of poor families by yearend through the simple provision of cash grants. The total number of poor as of 2009 is just 3.67 million families as officially defined and measured by the National Statistical Coordination Board (NSCB). Thus, by 2012, there will only be 1.37 million poor families (assuming official poverty levels remain the same) – a number that Aquino intends to wipeout with his plan, as he said in his SONA, by including an additional 1.3 million beneficiaries in the CCT program.

But that is going by Aquino’s poverty mathematics which is based on a flawed official definition of who is poor. According to the NSCB, anyone who has P46 a day is not poor – a ridiculously low standard resulting in absurdly low poverty levels. Based on the June 2011 survey of the SWS, 9.8 million households consider themselves poor or almost three times the number of poor families as measured by the NSCB. This means that more than 6.1 million poor families are not covered by the CCT program.

However, its small coverage relative to the total number of poor is just a minor issue compared to the more fundamental issue of sustainability and long-term impact of the program. How can the CCT achieve its stated objective of investing in the poor when it’s funded by debilitating foreign debt and not even complemented by substantial investments in public education, health, and housing? What will happen to the beneficiaries of CCT once the program is over and still no jobs are available?

On jobs

But as far as Aquino is concerned, jobs are being created. In his SONA, he mentioned that the unemployment rate in April went down to 7.2 percent in April 2011 from 8 percent during the same period last year, crediting the efforts of his administration. Some 1.4 million jobs have been supposedly created in his first year. The numbers are from the Labor Force Survey (LFS) of the National Statistics Office (NSO).

The 1.4 million jobs supposedly created between April 2011 and April 2010 could not be attributed to government intervention. In the first place, the only job generation program that the Aquino administration has so far initiated is the Community Based Employment Program (CBEP). This program has only created 170,000 jobs out of a target of 1.1 million. About 63 percent of these jobs are in infrastructure/construction, of low quality, and highly temporary. The 170,000 could even be deceitful because a worker can avail of more than one CBEP job.

Looking at the NSO data, more than 456,000 jobs of the 1.4 million additional jobs are classified as those who worked for private households (domestic help, etc.), self-employed without any paid employee (vendor or sari-sari store owner, etc.), employer in own-family operated farm or business, and worked without pay in own-family operated farm or business. In other words, a significant part of the additional employment in the past year was due to the people’s sariling diskarte and not because of any meaningful job generation program of government. (See Table)

Figures in '000

Furthermore, NSO jobs figures have long been unreliable for distorting the concept of unemployment and statistically deflating the extent of job scarcity in the country. For instance, the NSO does not count as unemployed those who are seeking work but for one reason or another (e.g. school or family obligations, illness, etc.) will be unavailable for work despite an opportunity within two weeks after the survey. Meanwhile, household members who help operate the small family farm, sari-sari store, or eatery are considered employed, including those who helped for even just one hour in the past week before the NSO survey.

Because of such distortions, the number of jobless according to the April 2011 LFS of the NSO is just 2.9 million workers. In contrast, adult unemployment rate as measured by the SWS in its own survey was pegged at 27.2 percent or 11.3 million workers in March 2011. Like in the case of hunger, it is important to study the long-term trend to determine if headways are being made in job creation.

Based on SWS data, the average adult unemployment rate under Aquino is 23.2 percent, a continuation of the deteriorating domestic jobs situation. Under Arroyo, it was 19.77 percent; Estrada, 9.66 percent; and Fidel Ramos, 9.66 percent. NSO employment data since April 2005, meanwhile, could no longer be compared to previous years because of a redefinition made by the National Statistical Coordination Board (NSCB). The shift in definition “reduced” official unemployment by 1.9 million in the April 2005 survey. (To be concluded)


One thought on “SONA 2011: Making sense of Aquino’s facts and figures (part 1)

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