In an August SWS poll (before “Pablo” and Manny’s KO) 28% of Filipinos said their circumstances had worsened in the last 12 months versus 21% who indicated it had improved; for a negative 8 points. Why are Filipinos dissatisfied with their quality of life even as the economy is growing at 7.1%, the stock market and real estate are at record highs and the Philippines is the darling of the international investment community? Why is there a disconnect between how Filipinos feel and what the numbers tell us?
The principal reason is the growing income disparity in the country. The poor are getting poorer and the rich richer. The money is being made by owners of capital and land and the educated with the ordinary man being left behind. Thus our unemployment (7%) and under-employment (19.3%) is the highest in the ASEAN even as we are growing faster than our neighbors.
Our growth is principally from construction and services (call centers) with few new jobs in labor-intensive manufacturing and agriculture. Development is in the urban areas and not in the rural sector which makes up 80% of the poor. Corporate profits have outpaced gains in wages i.e. the share of workers in the economic pie is diminishing. Much of these profits come from improved business conditions but some of it is perceived by the public to be the result of monopolies and cartels, witness the reported overcharging by Meralco and mobile telcos for basic services.
Then there is the growing low-level corruption. Businessmen say bribes and smuggling are rampant, flying below the radar of national media and Central Government.
In the meantime population growth is diluting the already meager share of the poor in economic prosperity.
Filipinos are feeling marginalized even as the statistics say otherwise. How can the Government get national progress to feel more inclusive?
One thing to understand, there is poverty and there is poverty consciousness. The former is a physical state of being, the latter a mental condition. One is an absolute measure, the other a relative one. You can be rich yet feel poor –and vice-versa- depending on (a) how your neighbors are faring and (b) how you believe you should be doing. Poverty consciousness is about expectations.
There is arguably today a failure of expectations in the average Filipino. The promise of “Daan Matuwid”, the heralded economic numbers, and the displays of wealth among the new rich has led our countrymen to feel their lives should be better than it is. That, apparently, has not happened.
A study was recently conducted on wealth expectations across different peoples. Respondents from various countries were asked what annual income would satisfy them? The conclusions are surprising: To feel content, people in poorer, developing nations need a higher level of income than those in developed economies. Citizens of Dubai were the neediest ($276,000 in income) with Asians and Latin Americans next; while Europeans were the least. Among the latter, Germans ($ 87,000) had the lowest threshold of economic happiness despite having the highest per capita income; while Italians -who are financially precarious- had the highest ($175,000).
This suggests there are factors other than income that make for social satisfaction like reliable public services, a livable environment and speedy justice. Relative prosperity, communal values, and social infrastructure are as important as absolute wealth. This might explain why, despite their growing incomes, Chinese are said to be less happy today than they were under the stricter but more egalitarian regime of the past. Europeans – Germans in particular- have an even distribution of income, a strong social support structure, and a working judicial system; which explains their need for less. The opposite is the case in developing countries: People here are expected to fend for themselves with little help from Government so money becomes the principal measure of comfort.
The lesson for the Philippines is therefore this: Public satisfaction is about social values like equality, fairness, honesty and public service as it is about economic well-being. Even as the Government must broaden the economic base and reduce income disparity, there is an equal urgency to promote the softer issues in development–justice, environment, community- that in the absence of immediate material prosperity make for a humane society.
The good news is these are within the control of Government and do not require big budgets. Our leaders can improve the judicial system, strengthen the bureaucracy, and erase corruption; without Private-Public Partnerships or foreign money. In fact the opposite is the case: Investments will follow qualitative reform.
Perhaps the Bhuttanese have it right: Their measure of development is Gross National Happiness, not Gross National Product. We could learn something from this.