Social protection: the missing link to get out of the poverty trap

The Economist in 2017 called the Philippines the country with the most persistent poverty in Southeast Asia. Most current data from the Philippine Statistics Authority revealed that the incidence of poverty increased to 23.7% in the first half of 2021 from 21.1% in the first half of 2018. In absolute terms, 26.14 million Filipinos lived below the poverty line of 12,082 pesos a year. months for a family of five in the first half of 2021. This is mainly due to the onslaught of the pandemic, which has resulted in the loss of jobs and income for many Filipinos. The important question, however, is why, despite relatively good growth episodes before the pandemic, poverty reduction has been gradual and not as rapid as that of our Asean neighbors.

If a population table is constructed showing the poverty line, all points below are people labeled as poor. But the many points just above the line are called the “near poor” and any type of crisis, whether economic or health-related, will make these people vulnerable to falling below the line. And, of course, those who are already below become even poorer. As the Philippines is in the “Pacific Rim of Fire”, it is prone to different types of natural disasters like typhoons, droughts, earthquakes and volcanic eruptions. Added to this are health and other man-made disasters that affect the economic well-being of citizens. Thus, any gains in poverty reduction can easily be reversed by the occurrence of major crises or disasters.

The above situation is where social protection comes into play. It aims to protect all citizens from vulnerabilities during their lifetime, especially the poor, the disabled, the elderly, out-of-school youth, children and other marginalized groups. at risk. Without an effective social protection system, the fight against poverty will always be futile.

Social protection should therefore be part of overall inclusive development goals and a country’s overall poverty reduction strategy. Social protection is not just about fighting poverty and promoting resilience to shocks. It should also constitute a broader development strategy. It also acts as a “macroeconomic stabilizer” that fuels demand during economic downturns and enables people to better overcome the threat of poverty and poverty itself. Social protection also involves an aspect of social justice which can help to avoid and mitigate social conflicts. In the case of recent conflicts in a country, social protection can be used as an important government mechanism to respond to the needs of people in pre-, during- and post-conflict situations.

It should also be emphasized that reducing poverty and vulnerability can only be achieved through a combination of development interventions that include macroeconomic growth and stability, asset accumulation and a functioning social protection system. good. The social protection system must be able to respond to the different types of risks and vulnerabilities faced by households and individuals throughout their life cycle. The different types of risks faced by households must be properly identified, whether they are economic, natural or man-made hazards. These risks can also be related to age, sector and gender. Appropriate responses to these risks can come from households themselves, from government or from the private sectors and civil society. A multi-stakeholder response and collaboration will also be important in managing risks and vulnerabilities.

The government plays a central role in this response. It has an operational framework that categorizes social protection programs: social assistance, social insurance, labor market programs and social safety nets. The two most important among the first two are the Pantawid Pamilya and the universal health care programs. Diokno-Sicat and Mariano (2018), estimating national government social protection expenditures from 2009 to 2017, found that these followed an upward trend, averaging 0.9% of GDP or about 5, 9% of national government expenditure. In the same study, it was noted that the average expenditure of lower-middle-income countries is 1.5% of GDP, much higher than the 0.9% of the Philippines.

Although the government social protection system has evolved well over the years, there are still major constraints to overcome to transform it into an efficient and responsive system. First, it must prioritize and streamline key programs because duplication and fragmentation issues abound. The introduction of social protection floors initiated by the ILO forced the government to undertake a process of prioritization of programmes. Second, with streamlining, budget support needs to be increased. It will be useful to mobilize additional resources from the private sectors and civil society. Third, more effective implementation of key programs must be achieved with the use of digital technologies in the beneficiary registry and in the distribution of grants and subsidies.

Dr. Fernando T. Aldaba is Professor of Economics and former Dean of the School of Social Sciences at Ateneo de Manila University.

Joel C. Hicks