MikeLigalig.com

AFP – Sun, Mar 3, 2013


Optimism is soaring that the Philippines is finally becoming an Asian tiger economy, but critics caution a tiny elite that has long dominated is amassing most of the new wealth while the poor miss out.

President Benigno Aquino has overseen some of the highest growth rates in the region since he took office in 2010, while the stock market has hovered in record territory, credit ratings have improved and debt ratios have dropped.

"The Philippines is no longer the sick man of East Asia, but the rising tiger," World Bank country director Motoo Konishi told a forum attended by many of Aquino's economic planning chiefs recently.

However economists say that, despite genuine efforts from Aquino's team to create inclusive growth, little progress has been made in changing a structure that for decades has allowed one of Asia's worst rich-poor divides to develop.

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In contrast, about 25 million people, or one quarter of the population, lived on $1 a day or less in 2009, which was little changed from a decade earlier, according to the government's most recent data.

Some of the elite families have dominated since the Spanish colonial era that ended in the late 1800s.

Prominent Spanish names, such as Ayala and Aboitiz, continue to control large chunks of the economy and members of the families are consistent high placers on Forbes' annual top-40 wealth list.

Their business interests range from utilities to property development to banking, telecommunications and the booming business process outsourcing industry.

Many of the ethnic Chinese tycoons, such as Sy and Tan, got their start soon after the country gained post-World War II independence from the United States.

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The government is spending more than $1 billion this year on one of its signature programmes to bridge the rich-poor divide.

The conditional cash transfers programme will see 15 million of the nation's poorest people receive money directly in exchange for going to school and getting proper health care.

However Louie Montemar, a political science professor at Manila's De La Salle University, said little had been done at the top end to impact on the dominance of the elite.

"There's some sense to the argument that we've never had a real democracy because only a few have controlled economic power," Montemar told AFP.

"The country dances to the tune of the tiny elite."

Nevertheless, the government and economists say there are many other reforms that can be taken to bring about inclusive growth.

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