The World Bank (WB) begins to sound like Pope Francis.
In its most recent report on Philippine growth prospects, the WB urges government to immediately reform the prevailing tax system. This system overburdens the poor wage earners while allowing the rich to get off lightly.
Tax reform will be a key element in ensuring higher growth rates that is a fundamental requisite to reducing poverty over the next decade. Unless substantial tax reform is undertaken, our growth performance will be weaker and less inclusive.
Our economists said the same thing much earlier, illustrating quite clearly how at similar earning levels, the Philippines taxes were significantly higher than our neighbors in the region. Our government, seemingly obsessed with credit ratings even as poverty figures rise to alarming levels, largely ignored the voice of the economics community. The Department of Finance did not even formally reply to the recommendations, much less do anything about them.
One small step was undertaken, at the initiative of Sen. Ralph Recto. The taxable level for bonuses given wageworkers was raised. This small concession, however, takes effect only next year.
The WB takes our government to task for serious under-spending on infra, social services and economic investments. Government should spend close to a trillion pesos on these items in the medium term to make our growth sustainable.
This column has taken government to task many times over the past few years for under-spending on infra. In 2011, our economic expansion fell to just over 3% because of the failure of this government to spend on strategic infra. The same drop in the growth rate occurred in the third quarter of last year for the same reason.
With lending rates at near parity with inflation, it is wise for government to borrow now in order to lay better foundations for future growth. Our economic and financial policies have, however, remained thoroughly unimaginative.
Mainly because of this government’s failure to effectively lead economic growth, the WB cut its growth projections for our economy. The best estimates for our 2014 growth performance is 6% --- significantly lower than the 6.5% to 7.5% projections at the beginning of last year.
The WB earlier estimated our 2015 growth rate at 6.7%. This week, however, the WB reduced our growth projections to 6.5%.
The anticipation of slower Philippine growth puts us below the 6.9% projected for the entire Asia Pacific. Last year, we crowed about being the fastest growing Asian economy after China’s growth rate showing signs of sputtering.
That did not happen, however. China applied a stimulus package to support its growth momentum. We did nothing. We failed to push infra projects in time. We did not cut taxes on the laboring majority. Our agriculture fell into intensive care.
From being poised to become a growth engine for the region, we have become a laggard. The Philippine economy will receive the smallest share of foreign direct investments among the core ASEAN economies this year. A yawning infra gap will choke economic growth. We are squandering opportunities. We are not laying the foundations for stronger future economic growth.
The fault lies entirely in the diffidence that has characterized this administration’s economic management.
Fervor
Catholicism in these islands is practiced with such fervor -— and such flavor.
We saw that when Pope Francis arrived Thursday evening. Millions waited the whole day, defending their little roadside spaces with zeal, all for a passing glimpse of the pontiff.
The papal convoy was timed to be quick. That was for the Pope’s convenience and also for his security. For once, the Pope resisted the temptation to stop and plunge into crowds, a prospect that kept our security officials paranoid
The quick passage of the convoy disappointed many in the crowd. They wanted the Pope to linger, to bless them and to listen to their plaints.
The ordinary folk interviewed by broadcast media reveals a strong streak of folk religiosity animating the welcoming crowds. The afflicted hoped papal blessing will cure whatever ails them. The disenfranchised hoped a wave of the Pope’s hand would right what was wrong.
This was a throng waiting for miracles to happen.
The unmistakable streak of folk religiosity was, at the same instance, a streak of despair. The poor wanted redemption. The weak wanted the gift of strength. The victims of injustice searched for a gesture from a divine hand.
This is the worldview of folk religiosity. The devout embraced rituals and icons with a wish list. They traded intense devotion for divine intervention. They embraced intermediaries rather than communicated directly with their God.
This was the strain of religiosity that came to us, filtered by the prism of colonial experience. Colonial occupation was a disempowering experience. The formal religion it brought could only resemble the actual asymmetry between the powerful and the powerless.
Still, the predominant sentiment in that stirring welcome last Thursday was love: intense love for the vicar who comes with great humility in his heart. He has proven to be a leader bent on reestablishing the Church in the community and not in the hierarchy.
He wants the clergy to be more responsive to the poor – perhaps, not by charity alone but by empowerment. It is a message he delivers by his acts. This is why he wants no politicians enclosing him, separating him from the masses.
He wants to meet the victims, to embrace the excluded, to encourage them. This is to say to empower them. That happens not by means of articulated doctrine but by a stronger sense of community.