Philippines’ elite swallow country’s new wealth
MANILA (AFP) – Optimism is soaring that the Philippines is finally becoming an Asian tiger economy, but critics caution a tiny elite that has long dominated is amassing most of the new wealth while the poor miss out.
President Benigno Aquino has overseen some of the highest growth rates in the region since he took office in 2010, while the stock market has hovered in record territory, credit ratings have improved and debt ratios have dropped.
“The Philippines is no longer the sick man of East Asia, but the rising tiger,” World Bank country director Motoo Konishi told a forum attended by many of Aquino’s economic planning chiefs recently.
However economists say that, despite genuine efforts from Aquino’s team to create inclusive growth, little progress has been made in changing a structure that for decades has allowed one of Asia’s worst rich-poor divides to develop.
“I think it’s obvious to everyone that something is structurally wrong. The oligarchy has too much control of the country’s resources,” Cielito Habito, a respected former economic planning minister, told AFP.
He presented data to the same economic forum at which Konishi spoke, showing that in 2011 the 40 richest families on the Forbes wealth list accounted for 76 per cent of the country’s gross domestic product (GDP) growth.
This was the highest in Asia, compared with Thailand where the top 40 accounted for 33.7 per cent of wealth growth, 5.6 per cent for Malaysia and just 2.8 per cent for Japan, according to Habito.
According to the Forbes 2012 annual rich list, the two wealthiest people in the Philippines, ethnic Chinese magnates Henry Sy and Lucio Tan, were worth a combined $13.6 billion.
This equated to six per cent of the entire Philippine economy.
In contrast, about 25 million people, or one quarter of the population, lived on $1 a day or less in 2009, which was little changed from a decade earlier, according to the government’s most recent data.
Some of the elite families have dominated since the Spanish colonial era that ended in the late 1800s.
Prominent Spanish names, such as Ayala and Aboitiz, continue to control large chunks of the economy and members of the families are consistent high placers on Forbes’ annual top-40 wealth list.
Their business interests range from utilities to property development to banking, telecommunications and the booming business process outsourcing industry.
Many of the ethnic Chinese tycoons, such as Sy and Tan, got their start soon after the country gained post-World War II independence from the United States.