Global Policy Forum

By Jenina Joy Chavez, Mary Ann Manahan and Joseph Purugganan

The Philippines government has responded to the recent Social Weather Stations report of rising hunger with promises of food coupons. While admitting that the plan is just a temporary relief, the response belies a lack of understanding of the real problem and is indicative of how unprepared the government is to tackle these issues. To address the worsening problem of hunger and poverty, the government should buckle down to the serious business of revising its food, agricultural and trade policies.

What the Survey Doesn't Say

The Social Weather Stations (SWS) survey reported an alarming 15.1% of households reporting hunger, or not having anything to eat at least once in the three months prior to the survey, with Mindanao reporting the highest incidence of 23%, followed by Metro Manila at 15.7%. (1) Agricultural production expanded by 6.61% in the first semester of 2004, with crops and fisheries leading the growth. (2) So why are people hungry? The answer lies not in the availability of food, but rather in the people's capacity to access food. Inflation is one culprit. Starting at a low rate of 3.4% in January, it reached 5.1% in June and peaked at 6.9% in September. Next is unemployment and underemployment, which stood at 13.7% and 18.5% in April, respectively. While this has improved a bit in July (also owing to improved agricultural production), the fact remains that more than four million job seekers cannot find jobs, and 5.6 million of those who have jobs are not working full time or desire more work.

The employed also have to contend with low wages. Wages range from 140 to 250 pesos (US$2.50-4.46) in industry, and 131 to 213 pesos (US$2.34-3.80) in agriculture, depending on the region. (3) This means that a family of five must have two members working full time and earning a minimum wage to meet at least their monthly food needs, which the government estimates at 3,349 pesos (US$59.80). (4) But how many poor families actually have two members employed formally? In short, people have become much poorer and less able to access food because of meagre income. If the self-rated poverty reported in the SWS stabilized at 53% (which is low compared to previous results that hit as high as 60%), the SWS was quick to note that this was because of belt tightening or the lowering of people's economic standards. All the more reason that the problem should be attended to immediately – people are bracing themselves for an even lower quality of life.

Liberalization: Curse Rather Than Cure

Liberalization has become the backbone not just of Philippine food and agriculture policies but of development policy as a whole. Since 1981, the Philippines has been pursuing a comprehensive and radical program of trade liberalization. Through the Tariff Reform Programs I – IV, the Philippines has unilaterally reduced nominal tariff rates from 23.5 percent in 1993 to 7.71 percent in 2001. Under the common effective preferential tariff scheme, tariff rates were reduced to zero on about 60% of all Philippine products in the inclusion list for the ASEAN Free Trade Area. Similarly, the government committed to bind all our agriculture products to the agreement on agriculture under the World Trade Organization (WTO) and to further reduce agricultural tariffs in continuing trade negotiations. (5)

What has this policy achieved so far? While they will always present results in a positive way, even research by mainstream economists cannot deny the negative impacts of liberalization. One such research (6) pronounces that "the reduction in tariff rates between 1994 and 2000 is generally poverty-reducing" but such decline varies across regions, where regions with the lowest initial poverty enjoy the bigger poverty reduction compared to those already much poorer to begin with. Further "(a)griculture contracts, while agriculture factor prices decline. Overall income inequality worsens as a result."

Straight out of the horse's mouth – trade liberalization has been hurting agriculture and the already poor population. Statistics bears this out. Agricultural employment declined from 11.29 million jobs in 1994 to 11.22 in 2003 (7) despite our government's insistence that joining the WTO would create half a million jobs annually. Real wages continue to fall, the highest fall (including even non-agricultural wages) being experienced in Muslim Mindanao. (8)

Precarious Food Access

While the hunger may be borne out of income declines, unless government seriously reorients its food policy there could be a real supply crunch in the future leading to increased prices. The liberal attitude towards food policy produced a new definition of food security that emphasises availability and affordability rather than prioritizing agricultural production. Importation has become a strategy equal to production and no longer just a policy tool to address production shortfalls. As a result, the Philippines has not graduated from being a net food importer. The national food import bill has been increasing over the last ten years, from $714 million in 1993 to $2.38 billion in 2003. (9) Yet even the supposed advantage of a liberalized trade regime on consumer prices remains elusive for Filipinos. Food inflation continues to outstrip overall inflation.

Thirty-nine percent of the country's labour force depends on agriculture (only 2/3 of whom are employed), and they have to compete for the shrinking share (to GDP) of the sector from 22% in 1993 to less than 15% in 2003. Moreover, they have to contend with the continued encroachment of industry and speculative ventures into productive land, the continued lack of incentive and support to agricultural production, and steep competition from imports.

The low priority given to food production is worrying, given that even with trade, global food production has been unable to catch up with demand. According to the Food and Agriculture Organisation, food harvest is expected to fall short of meeting consumption for the fifth consecutive year in 2004. (10) This reality should be considered seriously by government, to at least temper the rabid optimism that trade liberalization alone will solve our food security concerns. Nor will intensified agriculture and use of GMOs do the trick without first addressing food safety, biodiversity and production viability.

Mindanao: Hunger in the Food Basket

The SWS survey highlights the special case of Mindanao. The Mindanao situation has been punctuated by ironies throughout history, not least of which is hunger in a region blessed with vast food and agricultural resources. Certainly you would expect more from a region that runs an annual trade surplus (in bananas and crude coconut oil) of around $600 million in recent years. (11) Nor is hunger new to Mindanao. A few years ago, it was devastated by severe drought that government refused to acknowledge immediately, until the hugely successful Tabang Mindanaw campaign pressed the issue in its face.

Mindanao is the poorest island. Four of the five poorest regions and six of the poorest provinces in the Philippines are in Mindanao, including all four provinces in the Autonomous Region in Muslim Mindanao where more than half of households live in poverty. (12)

The problem can be rooted to the long-term marginalization of Mindanao in national development policy. The bias against agriculture has been felt most harshly in Mindanao because it is farthest from Manila. Access to land is worst in the region. The lack of peace and order, and insurgency problems contribute to the vicious circle of poverty and violence in the region. Unfortunately the government's uncritical support to the war on terror aggravates rather than abates the Mindanao quagmire. Gloomy as it may seem, Mindanao illustrates the worst of the Philippine government's blind adherence to liberalization and non-independent security policies. And try as the government might to deflect the focus from Mindanao, it will keep coming back to it. After all, a country is only as good as its worst region.

Abouth the Authors: The authors are from Focus on the Global South – Philippines and members of the Stop the New Round!, a coalition campaigning against a new round of trade liberalization under the WTO.

(1) The Social Weather Survey for the Third Quarter of 2004 found a near-record-high 15.1% of household heads reporting that their families had experienced hunger, without having anything to eat, at least once in the last 3 months. The SWS survey, done on August 5-22, 2004, also found 53% rating themselves as Mahirap or Poor, even though household heads are tightening their belts, or reducing the minimum home expense level they define as poverty. The 3rd Quarter 2004 Social Weather Survey was conducted over August 5 to 22, 2004, using face-to-face interviews of a national sample of 1,200 statistically representative households (300 each in Metro Manila, the Balance of Luzon, the Visayas and Mindanao), from 240 geographical spots selected from all regions. Error margins of ±3% for national percentages and ±6% for regional percentages should be applied. http://www.sws.org.ph

(2) Bureau of Agricultural Statistics, Performance of Philippine Agriculture, January-June 2004.

(3) National Wage and Productivity Commission, http://www.nwpc.dole.gov.ph/

(4) Poverty Statistics, National Statistical Coordination Board, http://www.nscb.gov.ph/poverty

(5) Ibid.

(6) Cesar Cororaton and J. Cockburn, Trade Reform and Poverty in the Philippines: A Computable General Equilibrium Microsimulation Analysis, 2002

(7) Bureau of Agricultural Statistics data.

(8) National Wage and Productivity Commission, http://www.nwpc.dole.gov.ph/

(9) World Bank Database, Philippines at a Glance, 9 September 2004, www.siteresources.worldbank.org

(10) Geoffrey Lean, "The More We Grow, The Less Able We Are to Feed Ourselves", Independent, August 29, 2004.

(11) Sylvia Concepcion, et al., "Breaking the links between economics and conflict in Mindanao", International Alert, December 2003.

(12) Ibid. See also the National Statistics Coordination Board website (http://www.nscb.gov.ph) and Human Development Network, Philippine Human Development Report 2002.

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C íŸ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.