#Philippines State Poverty Reduction Programs Don’t Work

The new President’s 1st EO is to centralize the anti-poverty campaign under the Office of the President. This will be done through a “cluster” – in other words, a committee that will plan the poverty reduction program. The usual phrases are eliminate duplication and redundancy. A lot noted that these are steps in the right direction. I take that with a grain of salt.

I take the contrary view. How many times have government agencies undertaken these steps? It’s a ritual every year to “streamline” and eliminate redundancy. Have the lines gotten any shorter? And even if the lines have gotten shorter, the process was transferred to online processing, the state still took your money away. What Filipinos need to understand is that the state is an additional overhead and administrative cost to the expenses racked up by businesses and customers in the course of doing business.

In the  event that there is indeed an elimination of state agencies and shortening of processes and the economy improved and poverty reduced, the question is was  government responsible or was it the market?

The government controlled media will claim that the state was responsible. This is plain rubbish, When the state agencies are streamlined if not eliminated, it means that the state backed off from its intervention and the market gets more chance to work. The improvement therefore is not due to the state, but due to the market. The president however, can be credited for backing off and letting the market work.

If the President’s cluster churned out more “anti-poverty” programs that need more government workers to implement,  then Filipinos incomes will continue to be taken away by the state to pay for the salaries of these program administrators – and worse, redistributed to the political base of the state. In other words, you cannot reduce poverty by decreasing the wealth of others.

Instead of crafting more poverty reduction programs, it is better to:

  • remove the protectionist constitutional provisions so that Filipinos have access to better paying jobs provided by foreign investors
  • have access to affordable and quality services offered by foreign owned firms
  • eliminate the taxes, fees, and procedures which obstruct the creation of new jobs and businesses

The employees of the state are naturally afraid of these solutions because it will cost them their jobs and livelihood. The better option is for these employees to take advantage of the more open environment and they themselves can get better paying jobs, or become the job creators themselves.

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