Do rich Pinoys want to be a little poorer?

There are almost 20 million Filipinos living in poverty in 2021, which translates to a poverty rate of 18 percent, according to the Philippine Statistics Authority. In 2018, the country’s poverty rate was estimated at 16.7 percent, which means there were 17.7 million Filipinos living below the poverty threshold four years ago.

Poor Filipinos are individuals and families whose income fall below the poverty threshold as defined by the National Economic and Development Authority. For a family of five, the minimum monthly income not to be considered poor is P12,030, or an income of P401 per day.

IBON Foundation Executive Director Sonny Africa said the country’s growing poverty rate should be blamed not only on the Covid-19 pandemic but also on government’s response to the health crisis. “The pandemic hit every country in the world, but because the lockdowns of the Philippines were too long, they were too harsh. The lack of public health measures and the overreliance on lockdowns to contain the pandemic, that caused the economy to contract,” he said in a TV interview.

“Because other countries in Southeast Asia did not have long lockdowns as the Philippines’s, their economies did not collapse as much, and did not increase poverty in the same way we did. I think that points to the government being accountable for the long lockdowns and I think they should be held accountable for the continued poverty even in 2022,” Africa added.

Despite the high inflation rate and the continuing threat posed by the pandemic, the current administration remains confident that it can achieve its target of a 9-percent poverty incidence by 2028. In a press briefing, Socioeconomic Planning Secretary Arsenio M. Balisacan said: “We can reduce poverty incidence by 5 percentage points at midterm, and another 4 percentage points by 2028. We aim to reduce poverty incidence among Filipinos to 9 percent by 2028.” (Read, “With 20 million poor Pinoys, 9% poverty goal stays,” in the BusinessMirror, August 15, 2022).

Balisacan said the government will use the 2021 poverty data as the administration’s baseline as it pushes to undo the damage inflicted by the pandemic on the economy. He said efforts to achieve the target include resuming face-to-face classes, greater vaccine access for children and adults, and providing training opportunities for Filipinos to improve their chances of securing quality employment.

The government, he said, is working to reduce the cost of doing business, enhancing inter-industry linkages and being more aggressive in promoting the country as a key investment destination in the region. The government will also provide greater support for research and development to encourage innovation.

Some solons are proposing a more radical option to help end extreme poverty in the country. Assistant Minority Leader and Gabriela Women’s Party Rep. Arlene D. Brosas said the Marcos administration must focus on imposing wealth tax on billionaires instead of taxing digital transactions and proposing pro-big business legislations.

“Imposing at least 3 percent tax on the wealth of Forbes’ 20 richest Filipinos will yield a whopping P98.2 billion. This is 8 times the projected revenues from the proposed VAT on digital goods and services, and enough to provide P10,000 cash subsidy to 9.8 million poor Filipino families,” Brosas said.

The Makabayan bloc has refiled House Bill 258, which seeks to impose “super rich tax” on individuals with net value assets exceeding P1 billion. The bill proposes a tax of 1 percent on wealth of above P1 billion, 2 percent on wealth above P2 billion, and 3 percent on wealth over P3 billion. (Read, “Solons weigh in on bid to tax PHL’s ‘super rich,” in the BusinessMirror, August 15, 2022).

House Committee on Ways and Means Chairman Joey Sarte Salceda of Albay, however, warned that “the moment you impose an outright wealth tax, it’s gone. And our business environment and jobs will suffer.” He added: “We can’t raise our taxes too high for capital because it’s so easy to move capital offshore. The best way to tax wealth is to tax the inefficient and dysfunctional use of land in this country.”

Rich Filipinos are in the best position to help alleviate the suffering of their poor countrymen by heeding the advice of Pope Francis: “These days there is a lot of poverty in the world, and that’s a scandal when we have so many riches and resources to give to everyone. We all have to think about how we can become a little poorer.”

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