Compartmentalized prosperity

The Philippines is supposed to be the second fastest-growing economy in Asia, after China.

China has solved its poverty. The Philippines has not. China is supposed to be corrupt. The Philippines, under BS Aquino III, is supposed to be honest.

A corrupt country that delivers. An honest country that does not deliver. There must be something wrong in between to explain that contradiction.

There are at least 25 million poor Filipinos today.   On a population of 100 million, that represents a 25-percent poverty incidence, a ratio that is only a slight improvement from the 27-30 percent poverty incidence of 25-30 years ago.

In 1990, countries of the world agreed to halve their poverty in 25 years, by 2015—this year.   The world succeeded.   Asia succeeded. The Philippines did not.   In 1990, Philippine poverty incidence was 34 percent.  That ratio should have been 17 percent by now.     It did not happen.   Poverty incidence is at above 25 percent, and that’s being generous with statistics, instead of 17 percent. 

That failure happened under Benigno Simeon (BS) Aquino III’s watch.  BS was elected president in 2010—thanks to his promise that he would not steal, thanks to the death of his mother, the beloved Cory Aquino on Aug. 1, 2009, and thanks to the deployment of hundreds of thousands of precinct count optical scan machines—glamorized photocopier and fax machines—that were supposed to speed up counting, with or without safeguards. 

To this day, nobody really knows how many people voted for BS because they really liked him, how many voted for him because of Cory, and how many more votes the PCOS machines counted in his favor because the machines read favorably anything identified with yellow.

Please note:  Until 2010, Joseph Estrada was more popular than Aquino.  In the 1998 presidential elections, when he was elected president, the actor defeated several name-brand candidates—Jose de Venecia, Raul Roco, Lito Osmeña, Alfredo Lim, Rene de Villa, Miriam Santiago, and Juan Ponce Enrile. Erap had 40 percent of the vote—more than the combined votes of the next two, (15.87 percent plus 12.44 percent) JdV and Roco, respectively. 

In the 1992 vice presidential elections, Estrada also defeated famous and revered names— Chief Justice Marcelo Fernan, Lito Osmeña, Ramon Magsaysay Jr., and Nene Pimentel.

Yet, in the 2010 presidential elections, BS Aquino III easily trounced Estrada—15 million vs. 9.48 million votes—despite Ninoy’s son having little to show in nine years as congressman and three years as senator in terms of achievements.

  In that election, Estrada lost in his home province, Laguna (where he never lost before), lost in his hometown, Pagsanjan (where he never lost before), lost in his city, San Juan (where he never lost before since 1969), and lost in his precinct (where he never lost before).

Did PCOS machines have anything to do with this mystery?

Anyway, back to poverty. We have 25-percent poverty incidence instead of just 17 percent by now.

What does the eight-percentage point difference mean?   Easily eight million Filipinos still earning $1.25 a day, the universal measure of extreme poverty. 

If those eight million were to form a country, it would be the 99th largest in the world, larger than at least 100 other countries or economies, including Hong Kong and Singapore.

Thus, prosperity in the Philippines is compartmentalized.     The country has one of the worst income inequality ratios in the world.  Very few are very, very rich.  So many are very, very poor.

“Financial inclusion” is a phrase invented for the majority of Filipinos.  They do not have access to a bank, or refuse to have access to a bank.   In fact, of the 1,490 towns in the Philippines, about 600 do not have a bank—a branch or a unit of a bank.   Easily thus, one-third of the archipelago is not serviced by a bank.

Half of the 20 richest Filipinos listed by  Forbes  are bankers.   That makes banking a tremendous wealth generator.   The richest, Henry Sy Sr. owns BDO, the biggest bank, and China Bank, sixth largest.     Sy controls about 22 percent of the P10.65-trillion Philippine commercial banking system.

Lucio Tan, second or third richest Filipino, owns Philippine National Bank, which with P592 billion assets, is No. 5, with 4.54 percent share of total resources.

George Ty controls Metrobank, No. 2 with P1.6 trillion or 15 percent of the banking system’s resources.

The Ayala family, represented by Jaime Augusto Zobel de Ayala, controls or manages No. 3, Bank of PI, with P1.4 trillion in assets, 13.11 percent of the system.

Four people, Sy, Tan, Ty and Ayala, own or control more than half or 52.6 percent, of the Philippine banking system.

In the Philippines, according to BSP data, 25 percent of Filipino adults have never saved.   Another 32 percent used to save.   That’s 57 percent of Filipinos who have no savings at all at the moment.

About 71.5 million Filipinos are considered adults, those who are 15 years old and above.   So 57 percent of that is 40.75 million.   More than 40 million Filipinos have no savings. Of that 40 million, 26 million have no savings simply because they don’t have money to save.   Not having money to save, they don’t have a bank account.

Sadly, the vast majority of Filipinos do not care about dealing with a bank.   Only four of every 100 people who borrow money, borrow from a bank.   In fact, 62 of every 100 borrowers   borrow from someone familiar—a relative or a friend.

Clearly, our banks, hugely profitable and owned by the richest Filipinos, and our central bank ought to do more for the less of our brethren—the majority of Filipinos, 25 million of whom live in abject poverty.

What does this mean? Only the poor can help each other. A supposedly honest president is useless to them. Remember that in 2016.


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