RATE OF GROWTH OF GNP
%
DISTRIBUTION OF INCOME PER PERCENTAGE SHARE
2010
2000
1990
1980
1970
1960
Why is the Philippines poor?
50
unemployment rate
14.2 % of country’s income are shared by 80% of the population
32.27 million Filipinos are living below the Asian poverty line
underemployment rate
40
17 million live on less than $1 a day 57% of the population consider themselves poor
30 %
UNEMPLOYMENT & UNDEREMPLOYMENT RATES
PROBLEM
UNEMPLOYMENT & UNDEREMPLOYMENT
8 7 6 5 4 3 2 1 0 -1
6 out of 10 believe they were worse off than the year before
20
7 out of 10 felt their quality of life has deteriorated
10
1 in 5 families does not have access to safe water supply
0
1975
2005
11.6% of GDP US $18.6 billion
Seabased workers were mandated to remit 80% of their earnings Professional workers to remit 70% Domestic and other service worker to remit 50%
REMITTANCES
SOLUTION
Marcos attempted to use the country’s surplus labor and high demand for labor in oil-producing countries to demonstrate the feasibility of “interdependent development.”
LABOR MIGRATION
35.8% of country’s income are shared by 20% of the population
US $103 million
10% of population
GOALS
NUMBER OF MIGRANTS DEPLOYED (in thousands)
1000
NUMBER OF MIGRANT WORKERS
To reduce levels of employment
800
To improve the stock of human capital To promote Philippine development and alleviate balance of payment problems through mandatory remittances.
600 400
CONS
taxes from remittances foreign exchange investment in human investment in physical capital helps fill unemployment helps fill underemployment multiplier effect diasporic philanthrophy brain gain
corruption from remittance taxes lax government in agriculture development Dutch disease brain drain shrinking middle class youth drain homogenous culture relative deprivation income inequality dependency behavior absent parent split marriages exploitation or abuse
This was perceived as politically safe and advantageous strategy Presented in such a way that the government was seen as providing jobs to the masses of unemployed and underemployed workers.
200 0
PROS
1975
2005
There are an estimated 250 political families nationwide, with at least 1 in every province.
POLITICAL DYNASTIES
NATIONAL OLIGARCHIES
There are about 100 or so Filipino families that control most of the country’s business.
Family Ownership Most major Filipino families had control of a bank, and meant that the state’s abillity to reward or punish actions was limited. Source: 1979
LANDED FAMILIES
GRAFT & CORRUPTION
members of political families in Congress
5000 4000 3000 2000
2010
2000
Clan wars, election-related massacre (57 killed) All presidential candidates for 2010 elections belong to a political family
Arroyo
Estrada Estrada impeached and charged for corruption
1000
52.3% of country’s income are shared by 1% of the population
INEFFECTIVE GOVERNMENT
Local election, political violence (nearly 100 killed)
Marcos’ crony Eduardo Cojuangco Jr. reclaims SAN MIGUEL†
Ramos Aquino’s maintains and expands the existing policy of labor export
US Naval Base closes
Asian Crisis
1990
1980 People Power marked the end of Marcos’ regime
Philippine Overseas Employment Association was established Marcos’ opposition Benigno Aquino assasinated
PCGG established to recover ill-gotten wealth from Marcos’ regime
Marcos declares MARTIAL LAW†
Passes MAGNA CARTA OF LABOR†
Blas Ople initiated a program for the overseas employment of Filipino workers
Oil price shock
Policy on overseas employment remained the same Migrant welfare issues arose: OFW† Flor Contemplacion executed; OFW† Sarah Balabagan raped; Maricris Sioson murdered Government denies they promote overseas employement
6000
Aquino
Marcos
DEBT
Marcos heavily promotes EOI†
WB† and IMF† encourages Philippine government to implement EOI†
ADMINISTRATION
FOREIGN BORROWING (US $ million)
1970
1960
non-members of political families in Congress
HISTORICAL NOTES
ROOT PROBLEM
Crony Capitalism Marcos’ vision of a “Bagong Lipunan” (New Society) was pursued during the martial law years. It was a movement urging the poor and the privileged to work as one for the common goals of society, and to achieve the liberation of the Filipino people through self-realization. Marcos confiscated businesses owned by oligarch families, but distributed them to small-time crony businessmen who took over these businesses and used them as fronts to launder proceeds from institutional graft and corruption in the different national governmental agencies.
“We own practically everything in the Philippines...” —IMELDA MARCOS (1998)
Fabian Ver
30th Richest Filipino (2009) Net worth: $70 million
Marcos
Imelda Marcos, Benjamin Romualdez (Imelda’s cousin)
Rolex 12, Marcos cronies
Eduardo Cojuangco Jr Juan Ponce Enrile
BECAME OWNERS OF THE NATION’S LARGEST CORPORATIONS
MONOPOLIZED THE FOLLOWING INDUSTRIES:
Roberto Benedicto
Antonio Floirendo
Lucio Tan
Herminio Disini Ricardo Silverio
$2.3 billion
Debt for BNPP † 7th Richest Filipino (2009)
2nd Richest Filipino (2009)
Net worth: $610 million
Net worth: $1.5 billion
Total foreign and domestic debt P4.655 trillion Debt servicing eats up one-third of the national budget.
0
change in external debt interest payments
The government lost about US$48 billion to corruption over a 20-year period
† Terms
BNPP - Bataan Nuclear Power Plant, largest white elephant from Marcos’ regime EOI – Export-oriented Industrialization IMF – International Monetary Fund MARTIAL LAW allows Marcos’ technocrats to control/reorient national economy MAGNA CARTA OF LABOR was designed to favor foreign investors, selected members of landed oligarchy, and Marcos himself OFW - Overseas Filipino Worker PCGG – Philippine Presidential Commission on Good Government ROLEX 12 – 12 cloest and most powerful advisers of Marcos SAN MIGUEL – Southeast Asia's largest food and beverage firm WB – World Bank