21 September 2014

Misery in Manila

The Philippines may not have a very large share of its population living below academically calculated poverty lines. But there is much misery in this country.

The Philippines may not have a very large share of its population living below academically calculated poverty lines. But there is much misery in this country.

The life of Edward is just one case in point.

Edward has just become a grandfather at the age of 33. His 14 year old daughter recently gave birth to a baby boy, fathered by her 16 year old boyfriend, a fellow high school student.

This is not an exceptional case. The Philippines has the highest rate of adolescent births in East Asia, and in contrast to other countries, adolescent births are on an upward trend. In recent times, every year there have been around 54 live births per thousand girls aged between 15 and 19 years old, up from 49 a decade or more ago. The strong influence of the Catholic Church, together with poverty, means that there is insufficient sex education and access to contraceptives like condoms.

Edward's daughter has now stopped going to school and is staying at home to care for the baby. She wouldn't think of giving up the baby for adoption. She is enamored with the cute child, as are her mother and Edward's children, the youngest of whom is an uncle at the age of 4. The Philippines is a country that just adores children, as reflected in the cult of Santo Niño, the Infant Jesus. This is of course wonderful. But the downside is that most Filipino children are spoiled rotten, and are slow to develop a sense of responsible behavior.

Edward is a taxi driver. He earns the equivalent of about $14 a day. This means that his family of four children and one grand child live above the World Bank poverty line, especially when you add on the small amounts his wife earns by selling Tupperware and Avon products. According to the World Bank, you need $1.25 a day in the poorest countries to cover your basic needs, and $2 a day in a middle income country like the Philippines.

The Asian Development Bank would even classify Edward in Asia's emerging middle class, albeit in the lower middle class group. But the reality of life in Manila is much harder than these sterile statistics would suggest. Edward is struggling day by day. His family members might each need $2 a day to survive. But his taxi earnings are not regular. Some days he earns more and some days he earns less. And in the rainy season like now, he also earns less as the number of visitors to Manila is lower than at other times of the year. In fact, Edward spends most of his days waiting for, rather than driving, customers, reflecting the Philippines massive underemployment.

Financial management is key to Edward's survival. And he is well trained for that thanks to his college degree in business studies. But at the moment, he is two months behind on paying his rent and three months behind on his electricity bills. It is expensive to have a new born child. And living conditions are tight for Edward and his family of now 6 dependents. They share a small apartment of one bedroom and one living room, which gets flooded out in the rainy season.

Edward's boss is doing much better, as he only pays Edward 10% of the taxi revenues. This is a lot lower than the 40-50% that taxi drivers earn in Australia or Canada. The Philippines is of course a country with large "surplus labor", which keeps wages low. The country is still a long way from the "Lewis turning point", where wages start rising when surplus labor is fully absorbed into the urban economy.

Filipinos are flocking to the cities in search of opportunity, which is sorely lacking in the countryside. Indeed, half of the Philippine population of around 100 million now lives in cities. But the manufacturing sector is only weakly developed due to the country's lousy infrastructure and corruption. So many Filipinos just try to eke out a living doing whatever they can in the services sector.

There are in fact plenty of jobs in the services sector because remittances sent back home by Filipino migrants ($24 billion in 2012) give many people money to spend. But there are even more people looking for jobs. The Philippines still has the highest fertility rate in East Asia, 3.1. This means that young people are forever streaming onto the job market. Children still make up 35% of the nation's population, again the highest in East Asia.

Edward is deeply worried. He doesn't know how he and his family can survive. Like many Filipinos, he hopes that God might help him, even though he didn't always do so in the past. Before driving a taxi, he had a marketing job in a small company that valued his college degree. But the company went bankrupt. And then he couldn't find another marketing job. Companies always prefer fresh young graduates. By his late 20s, he was already too old in this country with much surplus labor.

Edward is now contemplating emigration, the lifeline of the Philippine economy and society. Today, about 10% of the Filipino population works overseas. This is a very high number for a country which has such a young population. Like these migrants, he could send home money to his family.

But the majority of these Filipino migrants work in the Middle East. They can't take their families, and some suffer violence and human rights abuses. It is like a soft version of slavery. Many others work in Hong Kong, Malaysia, Singapore, Taiwan or Korea where things are better, but not always very much better. Edward would prefer to migrate to Australia or Canada. But, while these countries accept many Filipino migrants, it is very difficult to get in. You must have the skills that these countries are looking for.

Edward has been exploring migration possibilities with migration agencies, which manage most of the Philippines' emigration. They play an important role in organizing emigration. They handle all the paperwork, and make the connection between migrants and future employers, usually through agencies in the destination countries. But the migration agency fees are expensive, at least $2,500. Then they sometimes rip-off poor, naive migrants. And on top of the agency fees, there is the cost of the air ticket and pocket money to get started in a new country.

Filipinos usually pitch in to help finance a family member's emigration. But Edward's parents are now retired, and can't afford to help him. He has a cousin who migrated to Canada. But she does not contact the family anymore. She didn't even send money to her aging parents when they had health problems, and needed money to pay for medicine and hospital expenses. When they died, she didn't even return for the funeral. She couldn't leave her work, she said.

That may be true. Many migrants, even in Canada or Australia, live in precarious situations. They can be frightened to leave their jobs for even a few weeks. But many migrants suffer from "helping fatigue", from the interminable requests for money from their family members back home. In fact, many Filipino families live very well off these remittances. Indeed, they can even live much better than the poor migrant overseas, who is under constant family pressure to send back money, and faces higher living costs abroad. That's why some migrants stop sending money, and stop contacting their families back home. It becomes too much for them, the weight of caring for an extended family.

Edward's dilemmas are shared by too many of his countrymen, even though the Philippine economy has been the fastest growing economy in Asia these past few months. This growth is not trickling down in terms of better incomes and jobs, and poverty reduction. Indeed, one million more Filipino families have joined the ranks of those who experienced hunger due to lack of anything to eat in the past three months. After decades of poor performance, the Philippines is still playing catchup, and even in the best of circumstances will continue to play catch up for many years to come.

Emigration seems the only solution for Edward. But this will take time and money to organize. For the moment, he would like to push his daughter to get a job to help cover the family's costs. But all she wants to do is play with her new baby.


John West
Executive Director
Asian Century Institute
Tags: asean, philippines, manila, poverty, migration

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