ARE GFIs DOING ENOUGH?

The Philippine Star
01/22/10

Just less than four months from now, Filipinos will have another golden opportunity to change their lives for the better. Every six years we are all given the chance to choose a leader who will lead our nation out of this enduring poverty, and every six years we find ourselves asking the same question – why is the Philippines still poor?

The current administration has, this early, come up with a long list of its achievements in the past nine years to brag about, presenting statistics – including the total number of jobs created and GDP growth rates – to back up what it claims to be tangible results of its program to turn around the economy.

Harsh reality

But the harsh reality today is that more and more Filipinos are experiencing hunger, as shown by the results of the latest survey conducted by the Weather Station (SWS).

The results of the Dec. 5-10 survey, released on January 10, showed the proportion of families experiencing involuntary hunger in the past three months had reached a new record-high of 24.0 percent, or an estimated 4.4 million households.

The survey also found that an estimated 8.5 million families (46 percent) considered themselves as mahirap or poor, and an estimated 7.1 million families (39 percent) considered themselves as "food-poor" – figures that indicate how serious the poverty situation in the Philippines has become.

Many of those living in Metro Manila, where economic activity has purportedly improved, had also experienced hunger, according to the SWS survey, citing the 11-point increase in the measure of overall hunger from 16 percent (an estimated 394,000 families) in October to 27.0 percent (an estimated 665,000 families) in December.

Worse in countryside

The survey also indicated that the situation in the countryside was much worse, with overall hunger rising 8 points in the Visayas to 27.9 percent (an estimated 1 million families), and over 6 points in Mindanao to 24.5 percent (an estimated 1 million households).

The SWS statistics present an evidence of the continuing neglect of countryside and agricultural development, thus, the grimmer hunger situation in the provinces.

This raises an urgent question about how the government financial institutions (GFIs) – the Development Bank of the Philippines (DBP) and Land Bank of the Philippines, in particular – have played their roles in addressing poverty issues in the rural areas.

Roles in question

DBP describes itself as a premier development financial institution helping in the government's pump-prime activities through its retail and wholesale lending facilities to strategic sectors.

For more than five decades, DBP says it has been assisting strategic and critical sectors and has likewise continued to achieve substantial financial growth even during economic downturns.

It serves as a catalyst for sectoral development, the bank says, focusing on transportation, telecommunications, power and energy, agriculture, education, and health care.

LandBank's primary role is also to spur countryside development, making credit available to "small" farmers, agrarian reform beneficiaries, fisherfolks, and to local government units and small to medium enterprises.

Focus on bottom lines

Both GFIs say they continue to pour billions of pesos into their priority sectors and reap handsome rewards for their undertakings.

Based on press reports, DBP's loan portfolio rose to P156.04 billion as of July last year from year-ago level of P144.44 billion. Loans extended by LandBank rose 27 percent P177.9 billion at the end of September from a year earlier.

DBP's net income was reported at P1.54 billion covering the first seven months of 2009, up 60 percent over the year-ago figure, while LandBank's net income was reportedly to have likely exceeded its target last year of P6.5 billion.

Now I can't help but wonder if those huge sums of loans, some of which were drawn from the credit lines provided by foreign creditors such as the Asian Development Bank, World Bank and Japan Bank for International Cooperation, just to name a few, had really helped combat extreme poverty and hunger in the countryside.

Misplaced priority

The bottom lines of these two GFIs may be impressive and rewarding for the people running these institutions – the board directors, senior executives and even the junior officers and rank-and-file employees. That the GFIs are making money is, of course, good news for a government that continues to chalk up budget deficits year after year. Part of their earnings is remitted to the national coffers on a regular basis.

But there is a clear case of misplaced priority if we have two state lenders acting like private commercial banks that are focused on boosting profits but are not really effective as key partners in countryside development.

Clearly an assessment of how effective these institutions are in helping improve the lives of our poor brothers and sisters in the rural areas is needed.

Poverty alleviation is again in the platform of all presidential candidates. Whoever wins may have to urgently initiate the reorientation of these GFIs.

A toast to achievers

The Philippine Collegiate Champions League (PCCL) and ABS-CBN will jointly host “A Toast,” to be held this afternoon, January 22, at the dining hall of the ELJ building at Quezon City.

The affair will highlight the distribution of prizes to the top four teams of the 2009 Philippine Collegiate Championships led by ADMU Blue Eagles, FEU Tamaraws, San Beda Red Lions and SSC-Recoletos Golden Stags.

 Also to be recognized are the schools and personalities instrumental in establishing and strengthening the process of getting together the best collegiate teams nationwide to compete for the national collegiate title.

The highest honor to be conferred is the National Collegiate Player of the Year – an award given to the collegiate player for his exemplary conduct on and off the court, showing character worthy of emulation as a model collegiate player, consistent performer – as a team member and as a student – and an example of a competitive spirit imbued with a high degree of sportsmanship. Visit www.CollegiateChampionsLeague.net for more details about PCCL.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, SalcedoVillage, 1227 MakatiCity. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.