SONA 2012: Reporting housekeeping and half-truths

When the speech said that “a 43.61 percent increase in [the] budget next year” of state universities and colleges (SUCs) is proposed it wanted to give the impression of government support for higher education. The qualification that this is going to be in accordance with an “SUC Reform Roadmap” is problematic though because, as it is, the strategic plan of the Commission on Higher Education (CHED) seeks to align higher education institutions including SUCs “to the thrusts of the Philippine Development Plan (PDP), 2011-2016”.

Yet the PDP upholds the very same decades-old globalization policies that have stunted domestic industry and agriculture, resulted in a jobs crisis driving millions of Filipinos abroad for work, repressed wages and incomes, and diminished social services. The plan’s priority sectors have been previously identified by the biggest foreign transnational corporations (TNCs) in the country and include business process outsourcing (BPOs), mining, electronics exports, agribusiness, infrastructure, tourism and a few others. The administration’s thrust is evidently to use SUCs to provide the workforce that foreign investors and their local partners need, rather for the needs of domestic development.

And when the speech said that backlogs in classrooms, chairs and textbooks will be eradicated it wanted to give the idea that it is finally resolving education shortages. However there was a conspicuous silence on the backlog of some 132,000 teachers which would have indicated a sustained commitment to basic education even more strongly than purchases of buildings and desks that are important but still essentially one-off expenses.

Half-truths: Economic development

The 2012 SONA was accurate when it asked “Is it not an apt time for us to dream of a day where any Filipino who wishes to work can find a job?” because, amid an unprecedented jobs crisis, tens of millions of Filipinos do already dream of such a day. This includes the 11.7 million unemployed and underemployed Filipinos in April 2012 – which is 780,000 more than the 10.9 million in April 2010 — and the over 10 million Filipinos forced overseas to find work. The unemployed and underemployed comprised 27.7 percent (11.5 million) of the labor force in 2011. These estimates seek to correct for official NSO data that has underreported unemployment since 2005.

The speech reported creating millions of jobs and declining unemployment rates in the last two years but neglected to mention that the quality of jobs has drastically worsened. Some 2.4 million jobs were created between April 2010 and April 2012 or an average of just 1.2 million jobs per year (the comparison in the SONA between July 2010 and April 2012 to be able to report a higher 3.1 million jobs created is inaccurate because of the seasonal character of the labor market).

However the number of full-time workers actually fell by 865,000 which was only compensated for by a much larger 3.2 million increase in the number of part-time work which is conventionally low-paying, insecure and without benefits. As a result part-time work has risen to now account for over four out of ten (43%) jobs in the economy or 16.2 million out of 37.8 million employed.

In any case, there were clearly more jobs available abroad than were created at home. Just a little over 1.0 million jobs were created between April 2011 and April 2012 compared to the record 1.7 million Filipinos deployed overseas in 2011 or an average of 4,559 leaving the country every day.

The SONA jobs picture would also be more accurate if it had reported the 5.5 million child workers in the country between the ages of five and 17 in 2011 – equivalent to almost one out of every five (19%) children aged five-17 years old – of whom three million work in hazardous environments.

The speech reported that “wages are stable” which is precisely the problem. Real wages have been repressed and not kept up with the cost of living. Even with the recent staggered P30 wage hike in NCR, for instance, the mandated minimum wage of Php446 in May 2012 is just 44% of the P1,017 family living wage (FLW). This wage gap is even greater than a decade ago, in May 2002, when the minimum wage was 53% of the FLW. As it is the real value of wages that workers actually received was virtually unchanged between July 2010 (P308) and July 2011 (P307, taking inflation into account).

The administration’s attack on wages is two-fold. First, it categorically dismissed justifiable calls for an across-the-board P125 wage hike. Second, it introduced a so-called two-tiered wage system composed of a first tier “floor wage” – which is set low and could be frozen for up to five years – and a purely voluntary second tier “productivity based pay” (PBP). The scheme’s initial implementation in CALABARZON staggers a P255 floor wage and affirms the PBP as “voluntary in character.”

President Aquino only tersely declared in his speech that “it is only just that [the Comprehensive Agrarian Reform program] sees its conclusion during my term.” Part of the reason may have been to not draw further attention to controversies around the president’s family’s Hacienda Luisita. However another reason may be the Aquino administration having the worst land distribution performance by the Department of Agrarian Reform (DAR) of any post-Marcos government.

Only an average of 9,324 hectares were distributed monthly in 2011 compared to Arroyo’s 9,342 hectares (2001-10), Estrada’s 10,106 hectares (1999-2000), Corazon Aquino’s 16,878 hectares (1988-92) and Ramos’ 24,759 hectares (1993-98). The administration is also the most below-target in its accomplishment at 55.9 percent of targeted area for distribution compared to Corazon Aquino (56.4 percent), Estrada (73.5 percent), Ramos (82.6 percent) and Arroyo (82.9 percent). At the current rate the extended agrarian reform program CARPer is already five years behind schedule with its June 2014 target.

Towards real change

In closing the 2012 SONA, President Aquino asked rhetorically: “Isn’t the agenda for change moving forward?” Unfortunately after two years, there is clearly
no fundamental change and no systematic economic reforms taking place.

The directions the economy must head for to break the country’s pattern of exclusionary growth, deep poverty, severe inequality and underdevelopment are clear: thoroughgoing agrarian reform, national industrialization, asserting economic sovereignty and upholding the rights of the poor majority. Yet socioeconomic policies remain focused on giving foreign investors and their local partners opportunities to profit from cheap Filipino labor, agricultural resources and minerals even at the expense of sustainable domestic development.

Despite seeming differences with the previous administration, the Aquino government is similarly unsuccessful in proving that it is biased for the people and unable to challenge the rich and powerful foreign interests. As it is, the binding constraint to economic progress is political where the power of the government over the economy is wielded for the interest of the few over the welfare of the many. The challenge of economic development is then the deeply political task of building real democracy in the country.

*The author is the executive director of IBON Foundation, Inc., an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.