Pay heed to Occupy Wall Street protesters, Asia urged

A ranking official of the International Monetary Fund said the Philippines and other emerging economies should pay close attention to the “Occupy Wall Street” movement now developing in the United States because Asia is no stranger to the problems cited by US protesters.

Naoyuki Shinohara, IMF deputy managing director who was in the Philippines to meet with the country’s economic officials, yesterday said in a forum that the issue of income inequality is something that the Philippines has yet to address.

Shinohara said that although the country was able to partly reduce poverty incidence over the past two decades, the gap in income among the rich and poor remained wide.

“[The Occupy Wall Street movement] is a serious issue of social tension. That should not be seen as a concern only of the United States, but as an issue that everyone has to face,” Shinohara said in the forum held yesterday at the Asian Institute of Management.

He said that if the Philippines and other emerging Asian markets were to avoid the unrest now upsetting the United States and other advanced economies, measures addressing income inequality should be put in place.

Shinohara said he would back proposals to strengthen the Philippine government’s Conditional Cash Transfer (CCT) program because it would help ease the stress created by the wide income disparity between the rich and poor.

Under the CCT, the government will grant monthly food subsidy to some of the poorest households. Basic subsidy per household is P500. The amount will be added by about P300 per child for a maximum of three children. Recipient households are required to send children to public schools.

“Increasing spending on targeted subsidies and other social safety nets, such as for education and health, are means to address the problem,” Shinohara explained.

Poverty in the country remains high even as the domestic economy continues to grow as seen in the last 10 years.

The latest government report on poverty said that as of 2009, Filipinos living below the poverty line stood at 26 percent of the population.

This marks an improvement from the levels seen between the late 1990s to early 2000s, when a third of the population lived below the poverty line. But the latest poverty figure is still far from the Philippines had set in its Millennium Development Goal, where poverty incidence should not be exceed 17 percent of the population by 2015.

Shinohara said that, unlike advanced economies, the Philippines and its Asian neighbors could be expected to perform much better this year and the next. The region is seen to continue driving growth of the global economy.

According to IMF projections, the Philippines will grow by 4.7 percent this year and 4.9 percent next year. China is expected to grow by 9.5 percent this year and 9 percent next year.

On the other hand, the United States is projected to grow by 1.5 percent this year and by 1.8 percent next year. The euro zone economies are seen to grow by an average of 1.6 percent this year and 1.1 percent next year.