Inequality Dynamics: Corruption and Political Dynasties

Income inequality has been a long lasting development challenge for the Philippines. In a statement released by the National Statistical Coordination Board in 2005, it was recognized that the income gap between the rich and the poor was wider in the Philippines than in Indonesia and Thailand, indicating serious inequality in the distribution of the country’s economic gains. It is noted that the income of the Philippines’ richest ten percent of the population was in fact twenty times the income of the poorest ten percent.

Philippines’ political culture is dynastic in nature, meaning local officials are often related to each other by blood. It is expected national resources would flow more favorably to provinces which have local governments related to the ruling political figures. These national resources are used to build infrastructure, create employment, and target poverty. Hence such ties only serve to exacerbate income inequality in Philippines.

Shoe ShineInterestingly, studies have found an opposite relationship, by running simple regressions. It is found that political dynasties are destructive in a different way. Political dynasties in this case tend to reduce economic efficiency by allocating resources selfishly, and hence inefficiently. Access to basic services is also restricted to the poor in provinces governed by political dynasties. Hence when compared to areas which are more competitive and efficient, the poor continue to remain poor.

According to a World Bank study in 2006, corruption in the Philippines is considered to be the worst among East Asia’s leading economies and the country has sunk even lower among those seen to be lagging in governance reforms. The 2009 Corruption Perceptions Index published by global watchdog Transparency International, showed that the situation in the country had improved slightly but still remained serious.

Corruption exists in all levels of the government, especially among high-level civil servants, according to the US Department of State Investment Climate Statement 2013. Companies generally have little confidence in the Philippine judicial system, and this is due to the allegedly incompetent court personnel, corruption and long delays of court cases.

In addition, rampant graft and corruption maintains a society that discriminates against the poor in favour of connected individuals and businesses. It hinders the growth of efficient yet competitive start-ups in the country without any political connection. This accentuates income and wealth inequality in the country.

Another main contributing factor to income inequality in Philippines is the lack of adequate education opportunity in the country. Through the enhancement of skill and knowledge of the underprivileged sections of the society, education play a vital role in stopping the cycle of generations of poverty among the poor due to a lack of skills and ignorance. Rich Filipinos are able to access significantly better educational resources through better funded schools and private tutoring.

There are also a substantial number of Filipinos who send their children overseas for education to America, Europe and neighbouring countries such as Singapore. Equal access to good education is the main pathway of upward social mobility among the poor. Due to the absence of high quality universal education in the Philippines, many Filipinos are stuck in the poverty trap for generations as they are not equipped for knowledge intensive jobs.

Additional research has found that education is significant in determining levels of inequality. The author of the paper also notes several measures taken by the government to target education, like the “Education for All” (EFA) Policy. This policy aims to expand public education, up to at least the level of secondary schools.

As of this writing, the current administration, from an overall standpoint. Has done little to provide in the areas of not only health, education and welfare. But much needed employment. With a history such as this. One can either assume or hope, that the coming elections of 2016 will finally place into office, the decent, long overdue leadership the Philippines believed it had acquired after President Marcos departed. Sadly, hindsight has revealed otherwise.

Jacques Phillip

As an ExPat living in the Philippines. I have found it relatively fun and exciting to have been given the opportunity to live among such wonderful people.

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