Poverty and Discontent
I do not consider myself an alarmist. In fact, I almost always see the glass half-full than half-empty. But I also think that a good manager, whether in government or the private sector, needs to be aware of certain situations that may impact the organization.
The two Social Weather Stations surveys I mentioned in the first part of this two-part article is something we need to keep an eye on. The two surveys were conducted on Dec. 12-18, 2024 and showed that Self-Rated Poverty, which stood at 63 percent, was the highest percentage of Self-Rated Poor families in 21 years. Hunger stood at 25.9 percent, the highest since the record high 30.7 percent during the Covid-19 lockdowns in 2020.
Any historian or political scientist will tell you that poverty and hunger may lead to discontent. Discontent in socio-economic conditions sometimes lead to discontent in public institution. When dissatisfaction fuses with political and social unrest, it becomes a perfect storm for political instability, which in turn unravels any economic growth the country has achieved and derails our path to economic recovery from the pandemic. I do not need to cite historical examples here, but we know that we have had our share of political and social upheavals in our history as a nation.
When I was in public service, and even early on as a young entrepreneur, my belief has been that alleviating poverty is the key to making our country better. Conversely, abject poverty is a breeding ground for discontent, which has a larger impact on the people’s trust on democratic institutions. I have always said that democracy only works if our people feel that democracy is working for them. Democracy becomes untenable to people if they feel that government institutions are not working in their favor. On the business side, instability creates political risks for those who want to invest, making them decide to either put their money elsewhere or just wait until the instability subsides.
According to a 2024 Political Risk Survey Report by the global advisory company Willy Towers Watson (WTW), the Philippines had a political risk rating of 59, placing it fourth among the most politically at-risk countries in the East and Southeast Asian region, behind Myanmar (78 out of 100), Laos (64), and Cambodia (63). According to their website, the index was created by analyzing “patterns in the world’s most vulnerable countries, covering key political perils such as expropriation, currency inconvertibility, and political violence.
While The Allianz Group, one of the leading integrated financial services providers in the world, gave the Philippines a rating of B1 or “low risk for enterprise,” it did note in its County Risk Report that there remain headwinds that require “prudent monitoring,” such as the “geopolitical escalations with China and falling public support due to an economic slowdown.
This is precisely the attitude I am taking in the face of these potential risks. We need to be vigilant. We cannot allow ourselves to go back to the boom-bust cycles of the past. I am certain that President Ferdinand Marcos, Jr. and his economic managers are aware of the situation and are doing everything in their power to make sure that we are still on target to become an “upper middle-income country (MIC)”.
National Economic and Development Authority (NEDA) Chief Arsenio M. Balisacan remained optimistic that we can reach the upper middle-income status by late 2025 or early 2026. Finance Secretary Ralph Recto shared this upbeat projection by citing the country’s strong performance during the past year. Sec. Recto noted that the expansion of the Philippine economy by 5.8 percent for the first three quarters of 2024 made us “among the fastest-growing economies in Asia, outpacing Malaysia (5.2 percent), Indonesia (5.0 percent), China (4.8 percent) and Singapore (3.8 percent).” And he remained confident that the country will meet the growth target of six percent to 6.5 percent for 2024.
I generally share my good friend’s positive outlook. I think we remain fundamentally sound and that government has made the necessary structural reforms that would allow us to navigate evolving domestic and global challenges. But to ignore potential risks and challenges would be a mistake. We need to be able to manage the potential threats to growth and prosperity. We cannot go back. We need to power through the future. Let us hope that all Filipinos are united in that grand vision.
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