Focus: Progress unequally distributed - report

Whatever little progress has been achieved by the Philippines, particularly in per capita income growth, has been unequally distributed. Gains were lowest for the poorest, and increased with rises in economic level, a UN-funded report on the Philippines has revealed.

According to the 2002 Philippine Human Development Report (PHDR), continuing inequality in education has been largely to blame for the growing economic disparity between the country's rich and poor.

Education, as shown by the PHDR, is an important determinant in the quality of employment, income, and standard of living of the family.

The report showed that the chances of a person getting higher wages increases for each level of schooling. The increase in a person's earning ability or wage rate for each year of elementary schooling is 2.3 per cent over someone with no education, 14 per cent if he finishes elementary school, and 28 per cent for a high school graduate.

A college graduate will earn about 53 per cent more than somebody without school education. In terms of total family income, this would be 81 per cent over a family whose breadwinner has had no education.

Edita Tan, a professor at the University of the Philippines and a member of the PHDR research team, surmised that this is because the head of the family who is a degree-holder is most likely married to a spouse who is also better educated.

Education also figures greatly in income as shown in the 1999 figures which showed that executives who have post-graduate degrees earn between P62,713 ($1,254) and P122,000 ($2,440) a month, compared with workers in the production or manufacturing line who earn from as low as P7,747 ($155) to a maximum of P16,500 ($330) a month.

Tan said this disparity shows that access to education is still unequal and ultimately affects their earning power, as the poor – who cannot go on to college because they have not finished elementary schooling – are forced to seek unskilled, lower-paying jobs.

The PHDR also said that the country's slow growth mirrors the slow pace of industrialisation and structural change, which heightens the increase in the so-called informal sector, which is composed of many small family enterprises that employ their own family members and child workers.

This is evident in the small employment and sectoral share of manufacturing – deemed the backbone of the domestic economy – in the total gross domestic product, as shown in the 1981 to 1999 figures.

Compared with the service sector, manufacturing accounted for a 25 per cent GDP share and 10 per cent employment share in 1981. This went down in 1999 figures to 24.5 per cent and 9.6 per cent respectively.

Service, on the other hand, accounted for a 38.3 per cent GDP share and 34.3 per cent employment share in 1981, and 45.5 per cent and 45.3 per cent shares, respectively, in 1999 figures.

The PHDR concluded that the country's economic gains have not adequately provided employment to its people. Economic growth, said Tan has "not been fast enough to create new jobs for a fast growing labour force".

Unemployment has persisted at an average of more than eight per cent in the post-Marcos dictatorship years, and gross growth has averaged 3.5 per cent from 1986 until the present.