Different Development Issues in the Philippines

1. Poverty

Poverty and inequality in the Philippines remains a challenge. In the past 4 decades, the proportion of households
living below the official poverty line has declined slowly and unevenly.

Economic growth has gone through boom and bust cycles, and recent episodes of moderate economic expansion
have had limited impact on the poor. Great inequality across income brackets, regions, and sectors, as well as
unmanaged population growth, are considered some of the key factors constraining poverty reduction efforts.

Causes of Poverty

The main causes of poverty in the country include the following:

 low to moderate economic growth for the past 40 years;

 low growth elasticity of poverty reduction;
 weakness in employment generation and the quality of jobs generated;
 failure to fully develop the agriculture sector;
 high inflation during crisis periods;
 high levels of population growth;
 high and persistent levels of inequality (incomes and assets), which dampen the positive impacts of economic
expansion; and
 recurrent shocks and exposure to risks such as economic crisis, conflicts, natural disasters,and "environmental
poverty."

Key Findings

The report's key findings include the following:

 Economic growth did not translate into poverty reduction in recent years;
 Poverty levels vary greatly by regions;
 Poverty remains a mainly rural phenomenon though urban poverty is on the rise;
 Poverty levels are strongly linked to educational attainment;
 The poor have large families, with six or more members;
 Many Filipino households remain vulnerable to shocks and risks;
 Governance and institutional constraints remain in the poverty response;
 There is weak local government capacity for implementing poverty reduction programs;
 Deficient targeting in various poverty programs;
 There are serious resource gaps for poverty reduction and the attainment of the MDGs by 2015;
 Multidimensional responses to poverty reduction are needed; and
 Further research on chronic poverty is needed.

The report comprehensively analyzes the causes of poverty and recommends ways to accelerate poverty reduction and
achieve more inclusive growth. In the immediate and short term there is a need to enhance government's poverty
reduction strategy and involve key sectors for a collective and coordinated response to the problem. In the medium and
long term the government should continue to pursue key economic reforms for sustained and inclusive growth.

2. Illiteracy

Although the Philippines has a basic literacy rate of more than 88.5%, pockets of illiteracy remain. According to
the Department of Education, there are more than 1 million pre-literates in the country and more than 6 million people
are deemed to be functionally illiterate. Many of these are found among the indigenous cultural communities where SIL
works in association with the Philippines Department of Education.
Some of these communities have no written tradition for their languages. In those instances, linguistic research can be
the starting point for development of an appropriate orthography for the language. The goal is to produce an alphabet
that is easy to read and write, so that students can transfer their literacy skills in the vernacular into other Philippine
languages that they learn. SIL endeavors to serve these communities through a learner-centered, “bottom-up” approach
which keeps the power of decision – ownership of the process and the product – in the hands of the community. We
desire that, from the beginning, learner success and enjoyment will build a foundation for continuing education,
benefitting the individual, the community and the nation.
  MALEI (Matigsalug Literacy Education Incorporated) oversees the on-going development of literacy and
education among the Matigsalug Manobo of Davao del Norte and Bukidnon. SIL members helped facilitate the
formation of this people's organization. MALEI aims to include community education as part of their on-going
programs for out-of-school youth and adults. Typically, this would include sessions on topics such as budgeting,
leadership training and agricultural matters.
 Under the umbrella of OMALRACDI (Obo Manobo Active Language Resource and Community Development Inc.),
various activities take place in partnership with SIL. These include the promotion of literacy through equipping
Manobos to become literacy teachers and supervisors. To date, more than eight Literacy Teacher Institutes have
been held in Manobo communities, taught by Manobos. OMALRACDI also facilitates health care education
programs through primary health care classes taught by a Manobo midwife.
 The Tagakaulo Kalagan in Sarangani Province and Davao del Sur work in association with the Department of
Education Bureaus of Elementary Education and Alternative Learning Systems. Beginning in the barangay of
Lutay, an area which formerly had neither formal schools for children nor non-formal classes for adults, a
program for children has begun where basic reading and writing lesson materials are constructed first in the
mother tongue of the students, and then bridging into Filipino and English. SIL members are very active in this
area and the program is spreading to a number of other Tagakaulo speaking areas.

3. Unemployment

Unemployment and underemployment are the Philippines’ most important problems and the key indicators of the
weaknesses of the economy. Today, around 4 million workers (about 12% of the labor force) are unemployed and
another 5 million (around 17% of those employed) are underemployed. This Reserve Army of workers is a reflection of
what happens in the economy, particularly because of its incapacity to provide jobs (especially in the formal sector) to
its growing labor force. The social costs of this mass unemployment range from income losses to severe social and
psychological problems resulting from not having a job and feeling insecure about the future. Overall, it causes a
massive social inefficiency.

Despite rapid economic growth in the Philippines in recent years, unemployment remains a persistent problem for the
sprawling Southeast Asian nation of more than 100 million people.

Under President Benigno Aquino, in office since 2010, unemployment has fallen. The latest figures show the rate at 6.4
per cent in the second quarter of this year, down from 7 per cent a year earlier. But progress has been uneven and the
Philippines still has one of the highest rates of unemployment in the Asean region.

One reason is that job creation has struggled to keep pace with an ever-expanding population. In three of the past five
years, the number of people entering the job market has been greater than the number of jobs created.

The conundrum highlights the difficulty of spreading the benefits of economic growth and suggests they have yet to
trickle down to more deprived areas.

Participation in the labour force remains relatively low. Only about 65 per cent of the population aged 15 and above is
looking for work, one of the lowest levels in the region. This compares with 78 per cent in Vietnam, 72 per cent in
Thailand and 68 per cent in Indonesia.

This is partly explained by the high value set on further education in the Philippines: young Filipinos typically spend some
time in college before entering the labour market, contributing to the lower participation rate. Others in the region go to
work earlier.

Another factor may be the low quality of jobs available. Last year, just 58 per cent of workers — in both formal and
informal employment — were in what were described as paid jobs. Of the rest, 28 per cent were self-employed, with no
guaranteed income, and 11 per cent worked on family-owned farms or other businesses where they typically receive
food and lodging but no actual cash, according to official statistics.

Benjamin Diokno, an economist at the University of the Philippines and former budget minister, says this relatively large
number of unpaid workers — about 4 million people — “bloats” the ranks of the employed and makes unemployment
appear less serious than it is.

Common Impacts of Unemployment

Loss of Income

Unemployment usually leads to a loss of income. This is pretty obvious since if one does not work, he would natually not
be able to get any income. On the individual level, this is not so serious, but on a larger scale, this can be very
problematic. People would be less willing and able to purchase goods and services and they would tend to purchase
what they originally consider inferior goods and hence may experience the negative effects of loss in income such as
debt, and collectively bigger problems such as increased povety rates and lower standards of living due to lower
purchasing power
Negative Multiplier Effects

Unemployment occurs when certain factories or companies close down, and this is especially serious when there is a
financial crisis where recession and unemployment is rampant. When a company closes down, many jobs are lost. Since
what one spends is what another earns and one is unemployed, he has lower purchasing power and would also prefer to
save more as one is likely to be uncertain of the future. When a large number of people are unemployed, collectively,
their expenditure would be much lower. This would inevitably also lead to a decrease in demand. On the supplier side, if
there’s lower demand and lower income, they too will lower production, and a decrease in demand and decrease in
expenditure on materials by the suppliers would affect the next level of suppliers in the same way. This may result
negative effects such as a drop in GDP.

Loss of National Output

Unemployment causes the scarce resource labour to be underemployed since part of the workforce is not being used.
Hence production is not at its maximum and thus underemployment of resources would lead to a loss in potential
national output. If the situation does not improve in the long run, aggregate supply would drop and hence results in a
continuous loss of potential national output and hinders the potential of the country’s growth.

Fiscal Costs
One way government gets revenue is through tax revenue. This simply involves taxing the income of people, based on
their income. When there is unemployment, the government would collect less tax revenue as a result since the
incomes of people are lower. This loss would increase as unemployment increases. Unemployment can result in debt
and poverty, and the government has to take care of these people, hence welfare spending would also increase at the
same time. In cases where unemployment is very high, there would be a budget deficit, due to a combination of the
two, loss of tax revenue and increased welfare spending. This would result in the government having a limited budget to
spend on the many areas as well as decreased spending on public and merit goods. It might also burden the employed
since the government might increase tax rates to boost tax revenue.

Social Costs

An increase in unemployment leads to social deprivation. Social issues such as increased crime rates and lower life
expectancy are all related to unemployment. For instance, people who have lower income and are in debt might resort
to crime to earn themselves a living, and high employment would lead to more of such people, leading to increased
crime rates. Furthermore, some places with constantly high unemployment rates might observe high inequality in
income, and this is even more prominent in countries with high growth but high unemployment.

4. Environment

Today, environmental problems in the Philippines include pollution, illegal mining and logging, deforestation, threats to
environmental activists, dynamite fishing, landslides, coastal erosion, biodiversity loss, extinction, global
warming and climate change. Due to the paucity of extant documents, a complete history of land use in the archipelago
remains unwritten. However, relevant data shows destructive land use increased significantly in the eighteenth century
when Spanish colonialism enhanced its extraction of the archipelago's resources for the early modern global market. The
Philippines is projected to be one of the most vulnerable countries to the impacts of climate change. Meanwhile, the
country is projected to be one of the most vulnerable countries to the impacts of climate change, which would
exacerbate these weather extremes. As The Philippines lies on the Pacific Ring of Fire, it is prone to natural disasters, like
earthquakes, typhoons, and volcanic eruptions. In 2021, the Philippines ranked the fourth most affected country from
"weather-related loss events", partly due to the close proximity of major infrastructure and residential areas to the coast
and unreliable government support. One of the most devastating typhoons to hit the archipelago was Typhoon Haiyan,
known locally as Yolanda, in 2013 that killed 6,300 people and left 28,689 injured. Philippine politicians have
demonstrated awareness of environmental crises with the passing of policies like The Clean Air Act of 1999, the
Philippine Clean Water Act of 2004, the Climate Change Act of 2009, and participation in the Paris Agreement. However,
research has found that outside of cities, the general public doesn't feel equally informed. Environmental activists and
land defenders, consisting mostly of Indigenous communities who have been attempting to bring attention to the
environmental issues in the country have been met with violence or murder. As a result, the Philippines has been ranked
one of the most dangerous places in the world for environmental activists.

5. Infrastructure
 The Philippines enjoys tremendous endowments of natural, and human resources that provide great potential for
economic development and poverty reduction. However, overall development outcomes over the last decades have
fallen short of potential. The gap can be largely attributed to weak performance of public institutions in providing
services to citizens, which leads to a vicious cycle of weak public services, lack of trust in the government, and
unwillingness on the part of citizens to provide adequate resources to the government. The key development challenge,
therefore, is to reverse the cycle to one of virtuous development where increased government revenue translates into
improved service delivery and greater public trust in the government. Infrastructure plays an important role in this
development process. Insufficient infrastructure has been a major constraint to economic growth and poverty reduction
in the Philippines. Though the country has relatively high access levels to water, sanitation, and electricity, service levels
have failed to keep up with rapid population growth and urbanization. Infrastructure development in the country is
hampered by a poor business environment; weaknesses in planning, coordination, and financing; and a decrease in
private sector involvement in infrastructure provision. The report presents a road map which will help spur the
expansion, and improvement of infrastructure services, and move the country into a virtuous circle of growth and
development. It suggests that, in order to ease infrastructure constraints, the Philippines need to achieve a gradual
increase in infrastructure investments to at least 5 percent of GDP, and an increase in the efficiency of spending.
Furthermore, it is strongly suggested that the way forward for sustained development in infrastructure requires
instigating a rigorous fiscal reform program; pursuing continued reforms in key sectors-particularly power, roads, and
water-to improve cost recovery, competition, and institutional credibility, and to sharply reduce corruption; improving
central oversight of the planning and coordination of investments; and, making a few focused investments through
public-private partnerships to address key bottlenecks, and achieve quick gains in service delivery.