PIDS Book 1993-03 Poverty, Growth and the Fiscal Crisis
De Dios, Emmanuel S.

In late 1991, a reappraisal of the official statistics on poverty has shown that the decline in poverty incidence reported between 1985 and 1988 have been too optimistic. Until then, the government has customarily reported an encouraging 8 percent decline in poverty incidence, from 56 to 48 percent. However, a more refined treatment of the data by government agencies themselves later has showed that, during the period, poverty incidence has fallen by, at most, only 3 percentage points, from 58 to 55 percent. Not surprisingly, poverty incidence has declined so little even in the years of recovery. Events since 1988 have been hardly encouraging. Growth slackened continuously until the country finally slid into a recession in the last quarter of 1990. This recession has extended over most of 1992. There has been a good ground to suppose, therefore, that the poverty situation had not improved and may, in fact, have deteriorated. Results available recently from the 1991 Family Income and Expenditures Survey, although computed on a different basis, have shown that the number of poor families actually increased and poverty incidence worsened between 1998 and 1991. The government, however, has appeared unprepared to undertake any significant initiatives to reverse the trend. At the time, the government economic mangers have been engrossed in the complex fiscal and financial problems related to meeting its targets under a stabilization program. Even worse, the steps taken to address the deficit-such as large cutbacks on infrastructure spending and heavy indirect taxes-seemed to aggravate the problem by stifling growth further and compromising the chances for future development. It is in this climate of missed objectives and policy drift that the book is written. The aims are clear: first, public attention needs discussion to be refocused on the most important development goals and issues. The overriding question is whether and how poverty could be alleviated significantly and in a sustained manner. Second, it is aimed to suggest practicable ways to approach these goals, being mindful of the inevitable difficulties in policymaking confronted by officials. Rather than merely set direction, the point is to present policy tradeoffs soberly and helps decision makers come to a choice. At the same time, it is not lost that the new set of national officials to be elected in 1992 might be receptive to a fresh and nonpartisan look at the country's problem. The message is that measures to redress poverty could not be regarded merely as a "special" or sectoral concern. For, without denying the need for programs to address some special problems faced by the poor, it is still the direction of mainstream development and macroeconomic policies that shall ultimately determine whether poverty alleviation efforts succeed or fail. The danger on the one hand is the shortsightedness of those who make macroeconomic adjustments without regard for long-term consequences on the poor and on development. On the other hand are the poor, or those who work closely with them, who feel justified in their skepticism or hostility towards painful but necessary economic reforms. But, this too, is a kind of myopia and between one and the other fertile ground for useless debate and conflict. Where there are no longer any neat and pat answers, however, and virtually all solutions require much of everyone, it is hoped that the articles included here can contribute towards shaping a working consensus, if not on ultimate visions, then at least on the urgent tasks at hand.

keywords:trade sector, tax structure, economic growth, poverty, public sector
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Book Code Title
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PIDS Book 2003-11Research and Development and Technology in the Philippines
PIDS Book 2003-10Education, Labor Market and Development: A Review of the Trends and Issues in the Philippines for the Past 25 Years
PIDS Book 2003-09The Quest for a Better Environment: Past Experiences and Future Challenges
PIDS Book 2003-08Infrastructure Development: Experience and Policy Options for the Future
PIDS Book 2003-07Financial Services Integration and Consolidated Supervision: Some Issues to Consider for the Philippines
PIDS Book 2003-06Central Banking in the Philippines: Then, Now and the Future
PIDS Book 2003-05Philippine Competition Policy in Perspective
PIDS Book 2003-04The Philippines in the Global Trading Environment
PIDS Book 2003-03The Poverty Fight: Has It Made an Impact?
PIDS Book 2003-02A Perspective on Macroeconomic and Economy-wide Quantitative Models of the Philippines: 1990-2002
PIDS Book 2003-01Education and Globalization
PIDS Book 2002-07Selected Studies on APEC-Related Issues (TDAP Paper Series 1)
PIDS Book 2002-06Analysis of the President's Budget for 2002: Accounting for New Modes of Financing the Fiscal Deficit
PIDS Book 2002-05Toward a National Competition Policy for the Philippines
PIDS Book 2002-04Managing Urbanization Under a Decentralized Governance Framework (Volume 2)
PIDS Book 2002-03Managing Urbanization Under a Decentralized Governance Framework (Volume 1)
PIDS Book 2002-02Impact of the East Asian Financial Crisis Revisited
PIDS Book 2002-01The Philippines Beyond 2000: An Economic Assessment
PIDS Book 2001-06The Filipino Worker in a Global Economy
PIDS Book 2001-05Economic Crisis...Once More
PIDS Book 2001-04The President's Budget for 2001: Setting Priorities amid Depleted Choices
PIDS Book 2001-03Coalition-building and APEC
PIDS Book 2001-02The State of Philippine Housing Programs - A Critical Look at How Philippine Housing Subsidies Work
PIDS Book 2001-01China's Economic Growth and the ASEAN
PIDS Book 1998-01Local Government Units' Access to the Private Capital Markets
PIDS Book 1996-03Perspectives on the Manila Action Plan for APEC
PIDS Book 1996-02Financing Social Programs in the Philippines: Public Policy and Budget Restructuring
PIDS Book 1996-01Catching Up with Asia's Tigers, Volume II
PIDS Book 1995-02Catching Up with Asia's Tigers, Volume I
PIDS Book 1995-01Essays in Social Science and Development (A Tribute to Gelia T. Castillo)
PIDS Book 1994-01Breaking Away from the Fiscal Bind: Reforming the Fiscal System
PIDS Book 1993-03 Poverty, Growth and the Fiscal Crisis
PIDS Book 1993-02Absorptive Capacity for Foreign Aid
PIDS Book 1993-01Decentralization and Prospects for Regional Growth
PIDS Book 1992-03ASEAN Economic Cooperation
PIDS Book 1992-02Bureaucracy for Democracy
PIDS Book 1992-01Philippine External Finance, Domestic Resource Mobilization and Development in the 1970s and 1980s
PIDS Book 1989-01Survey of Philippine Development Research III
PIDS Book 1988-01Demand for Electricity in the Philippines: Implications for Alternative Electricity Pricing Policies
PIDS Book 1987-01Summaries of Completed and Ongoing Research Projects, 1979-1985, Volume II
PIDS Book 1986-03Economic Recovery and Long-Run Growth: Agenda for Reforms
PIDS Book 1986-02An Analysis of the Institutional Framework of the Philippine Short-Term Financial Markets
PIDS Book 1986-01Agenda for Action for the Philippine Rural Sector
PIDS Book 1985-01Economic Policies for Forest Resources Management
PIDS Book 1984-02Energy and Structural Change in the Asia-Pacific Region
PIDS Book 1984-01Philippine Employment in the Seventies
PIDS Book 1983-02How Participatory is Participatory Development? A Review of the Philippine Experience
PIDS Book 1983-01The Spatial and Urban Dimensions of Development in the Philippines
PIDS Book 1982-04Survey of Philippine Development Research II
PIDS Book 1982-03Summaries of Completed Research Projects, Volume I
PIDS Book 1982-02Integration, Participation and Effectiveness: An Analysis of the Operations and Effects of Five Rural Health Delivery Mechanisms
PIDS Book 1982-01Essays in Development Economics in Honor of Harry T. Oshima
PIDS Book 1980-01Survey of Philippine Development Research I
PIDS Book 1979-01Industrial Promotion Policies in the Philippines
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