GROUP 1

REASON OF POVERTY IN THE

PHILIPPINES
& BUDGET PLAN PROPOSAL

SUBMITTED BY:

SUBMITTED TO:
Introduction of Poverty
Poverty is a social condition that is characterized by the lack of
resources necessary for basic survival or necessary to meet a certain minimum
level of living standards expected for the place where one lives. The income
level that determines poverty is different from place to place, so social scientists
believe that it is best defined by conditions of existence, like lack of access to
food, clothing, and shelter.
Poverty is a consequence of the uneven distribution of material
resources and wealth on a global scale and within nations. Sociologists see it as
a social condition of societies with unequal and inequitable distribution of
income and wealth, and the exploitative effects of global capitalism.

How to know/determine that there is poverty in one country?

• Lack of shelter
• Lack of food
• Lack of education
• Lack of basic transportation
• Lack of ability to pay off debts
• Lack of good health and medical infrastructure

What poverty looks like in the Philippines?

Issues connected with of Poverty

 Corruption
 Unemployment
 Overpopulation
 Lack of education and opportunities
 Natural disasters
 Lack of infrastractures

Corruption major issue of Poverty in the Philippines.

Popular belief proposes that corruption and poverty are closely related

in developing countries including Philippines. Corruption in the public sector is

often viewed as exacerbating conditions of poverty in countries already

struggling with the strains of economic growth and democratic transition.

Alternatively, countries experiencing chronic poverty are seen as natural

breeding grounds for systemic corruption due to social and income inequalities

and perverse economic incentives.

The word corruption is derived from the Latin word “corruptus,” which

means “corrupted” and, in legal terms, the abuse of a trusted position in one of

the branches of power (executive, legislative and judicial) or in political or

other organizations with the intention of obtaining material benefit which is not

legally justified for itself or for others.

 Corruption was referred to as a great sin already in the Bible: “Do not

accept a bribe, for a bribe blinds those who see and twist the words of the

innocent.” However, the history of corruption is in fact related to the beginning

of the creation of law and the state and was already in the antiquity considered

an evil, which negatively affects the public administration and the functioning

of the political system.

The phenomenon of corruption is strongly influenced by the political

and economic environment. The more is the economic activity in the country

regulated and limited, the higher the authority and the power of officials in

decision making and the greater the possibility of corruption, since individuals

are willing to pay or offer payment in order to avoid restrictions. A great

potential for corruption is especially there where the officials are under the

regulation given the opportunity to decide on the basis of discretion.

Corruption, cronyism and nepotism are serious problems in the

Philippines. They pervade public life, keeping tax revenues low and hurting

efforts to alleviate poverty. Charges of corruption, graft, and cronyism are

common among government officials at all levels. These problems are so

entrenched that Filipinos have come to accept cronyism and the diversion of a

small percentage of funds as natural.

 The Philippines ranked 94th out of 177 countries in Transparency

International's 2013 corruption index, rising from 129th two years earlier, after
Mr. Aquino pursued corruption charges against former President Gloria

Macapagal-Arroyo and former Chief Justice Renato Corona, both of whom

maintain their innocence. [Source: Trefor Moss, Wall Street Journal, May 29,

2014]

  In the 1990s the Philippines was regarded as one of the world’s most

corrupt nations. Most corrupt nations: 1) Nigeria; 2) Pakistan; 3) Kenya; 4)

China; 5) Cameroon; 6) Egypt; 7) Columbia; 8) Uganda; 9) the Philippines; 10)

Indonesia. [Source: Transparency International].

In our country Philippines, there is a very high risk of corruption in

many aspects. Those includes the corruption in Judicial system, Police, Public

services, Land Administration, Tax Administration, and Public Procurement.

In the judicial system of the Philippines, Bribes and irregular payments

in return for favorable judicial decisions are common (GCR 2015-2016). The

judiciary is formally independent, but the rich and powerful have frequently

influenced proceedings in civil and criminal cases (BTI 2016). Procedural

fairness and transparency are severely undermined by nepotism, favoritism, and

impunity (HRR 2016). Companies do not have sufficient faith in the

independence of the judiciary and they rate the efficiency of the legal

framework in settling disputes and challenging regulations as poor (GCR 2017-

2018). Investment disputes can take several years to resolve due to a lack of

resources, understaffing, and corruption in the court system (ICS 2017). Low

salaries for judicial officials are said to perpetuate the problem of bribery (BTI

2016). The judiciary is underfunded by the state and often depends on local

sponsors for resources and salaries, resulting in non-transparent and biased

court decisions (FitW 2017). Foreign investors have noted that the inefficiency

and uncertainty in the judicial system are disincentives for investment; investors

regularly decline to file disputes due to the perception of corruption among

personnel and the complex and slow litigation processes (ICS 2017). Enforcing

a contract takes much longer than the regional average, but the costs involved

are significantly lower  (DB 2017).

In one recent case, a businessman filed an administrative complaint in

the country’s Supreme Court against Makati City judge for allegedly asking for

a PHP 15 million bribe in exchange for a favorable ruling in an insurance claim

(Inquirer, Aug. 2016). At the time of review, no further updates on the case

were available.

There is also high-risk of corruption when dealing with the police. The

national police force is widely regarded as one of the most corrupt institutions

in the country (ABS CBN, Jan. 2017). Reports of the police and military

engaging in corruption, extortion, and being involved in local rackets are

widespread (FitW 2017). Companies report that they cannot rely on the police

services (GCR 2017-2018). More than half of firms pay for private security (ES

2015). Businesses rate the National Police’s commitment to fighting corruption

as ‘poor’ (SWS 2016). President Duterte has accused several police generals of

being involved in the trafficking of illegal drugs (ABS CBN, Jan. 2017).

When dealing with the public services, companies also contend with a

high corruption risk. Approximately half of business executives reported being

asked for a bribe by someone in the government in 2016 (SWS 2016). Nearly

three out of five business reported expecting to give gifts in order ‘to get things

done’, but only one in ten reported expecting to give gifts to get an operating

license (ES 2015). Irregular payments and bribes in the public services sector

sometimes occur (GCR 2015-2016). Philippine officials involved in processing

documents related to civil and property registration and building permits are

more likely to solicit bribes compared to officials dealing with other types of

services (Ombudsman’s Office Survey 2013). Inefficient government

bureaucracy is ranked as the most problematic factor for doing business in the

Philippines (GCR 2017-2018). Civil servants often do not have the resources or

abilities to fulfill their tasks free from corruption and red tape (BTI 2016).

Furthermore, civil servants are generally not recruited in a competitive manner;

appointments are based on a practice of patronage (BTI 2016).

Corruption risks in the land administration are also high. Two out of

five companies report expecting to give gifts when obtaining a construction

permit (ES 2015). Property rights are formally recognized and protected in the

Philippines, but in practice, the law is not always upheld (ICS

2017). Businesses have insufficient confidence in the protection of property

rights (GCR 2017-2018). Corruption and arbitrariness in the application of the

law are common (BTI 2016; ICS 2017). Multiple agencies are responsible for

land administration, which has led to overlapping procedures for land valuation

and title registration; this has made the process costly (ICS 2017).

High risk of corruption when dealing with the tax administration is

also a problem. Around one in seven companies indicate they expect to give

gifts in meetings with tax officials (ES 2015). Tax regulations are among the

most problematic factors for conducting business in the Philippines (GCR

2017-2018). Companies indicate that they perceive that only a fifth of

businesses in their line of business pay their taxes honestly (SWS

2016). Officials at the Bureau of Internal Revenue (BIR) are believed to be

prone to corruption and known for embezzlement and extortion (Manila

Bulletin, Feb. 2014). A typical example of this can be found in a recent case in

the city of Bacolod; an officer with the BIR was caught extorting PHP 125,000

from a local company (Philippine News, Mar. 2017). Businesses rate the

BIR’s commitment to fighting corruption as poor (SWS 2016). On a more

positive note, there are signs that the BIR is pursuing more cases of tax evasion

(BTI 2016).

In the public procurement sector, which is also subject to rampant high

corruption, irregularities, and inconsistent implementation of legislation.

Likewise, more than a fifth of businesses report they expect to give gifts in

order to win a government contract (ES 2015). Two in five companies indicate

that most companies in their sector give bribes in order to win contracts (SWS

2016). Diversion of public funds, as well as favoritism in the decisions of

public officials, is very common (GCR 2017-2018). The public sector is

obliged to procure goods and services from companies with at least 60%

Philippine ownership (ICS 2017). Local-level public procurement lacks

transparency, fostering a culture of corruption through the misuse of the pork

barrel system; which are funds for discretionary use by representatives for

projects in their respective districts (BTI 2016). Philippine law allocates

responsibility for monitoring, investigating and sanctioning irregularities in

public procurement to a number of different state institutions, leaving potential

misconduct, inefficiency and impunity unchecked (Sunlight Foundation, Oct.

2013).
Solutions to stop corruption in the Philippines.

Corruption is a persistent cancer that’s killing our country and

destroying the lives of many Filipinos. It’s like a contagious disease that infects

and transforms the young generation of leaders from righteous ones into

wrongdoers. If this disease persists any longer, our present and future will be in

big trouble. Here are some possible solutions to stop corruption:

 PROMOTE TRANSPARENCY AND ACCESS TO INFORMATION

 ANNUAL ASSESSMENT OF ALL PUBLIC OFFICIALS BY THE

BIR

 END IMPUNITY

 PUNISH THE VOTE SELLERS AND VOTE BROKERS

 EMPOWER CITIZENS
Statistics of the Philippines

Philippines Population Growth

In 2018 to present, the Philippines had a population of 106,651,922

people, which represents an increase of 1,731,922 people compared to the last

years. With its 1.72 percent average population is projected to reach 142 million

by 2045. With about 21.6 percent of the Philippines population living below

the national poverty line based on a 2015 survey, life for the poorest of the

poor, especially for those living in big cities, could only get worse.

Philippines Population Projections

The notable rate of population increase in the Philippines is projected to

slow in the future, but should still be substantial. The current growth rate of
1.52% is projected to halve by 2050. The population is forecast to hit 110

million by 2020, and 125 million by 2030.

Philippine Budget Plan Proposal 2020

DEPARTMENT AMOUNT PERCENTAGE RANK

Department Of 16 T 16% 1
Education (Deped,
Ched, Tesda, Sucs)

Department Of Public 13.2 T 13.2% 2

Works And Highways
(DPWH)

Department Of Social 12. T 12.% 3

Welfare And
Development (DSWD)

Department Of Labor 11.5 T 11.5% 4

And Employment
(DOLE)

Department Of Health 10 T 10% 5

(DOH)

Department Of 9.3 T 9.3% 6

Interior And Local
Gov. (DILG)
Department Of 8.8 T 8.8% 7
Agriculture (DA)

Department Of 8.2 T 8.2% 8

National Defense
(DND)

Department Of 6.4 T 6.4% 9

Transportation (DOT)

Judiciary 4.6 T 4.6% 10

 Total 100 T 100%  

SOURCES:

https://www.transparency.org/topic/detail/poverty_and_development

https://www.worldbank.org/en/topic/governance/brief/anti-corruption

https://www.researchgate.net/publication/312498970_The_Impact_of_Poverty_on_
Corruption

https://www.quora.com/How-does-corruption-cause-poverty

https://www.corruptionwatch.org.za/learn-about-corruption/what-is-corruption/we-

are-all-affected/

https://www.ganintegrity.com/portal/country-profiles/the-philippines/

https://borgenproject.org/effects-of-poverty-in-the-philippines/

https://www.intechopen.com/books/trade-and-global-market/corruption-causes-
and-consequences

http://worldpopulationreview.com/countries/philippines-population/

https://www.adb.org/countries/philippines/poverty

https://psa.gov.ph/poverty-press-releases