PHL not spending enough for the poor

The Philippines’s spending for social protection programs remains below regional average although it is already classified as a “large middle-income” country, a report of the Asian Development Bank (ADB) showed.

In the report titled “The Social Protection Index: Assessing Results for Asia and the Pacific,” the ADB said the Philippines’s Social Protection Index (SPI) score was only 0.085.

The country’s index number, the ADB said, means that total social protection expenditures, for every intended beneficiary, represented less than 10 percent of the its poverty-line expenditures.

The ADB said the SPI is designed to help governments monitor their progress on social protection, as well as to facilitate cross-country comparisons.

The report, the ADB explained, divides social protection into three major categories—social insurance, social assistance, and labor market programs.

As a percentage of the country’s gross domestic product (GDP), the ADB said the Philippines spends about 2.5 percent of its GDP on social protection. Using 2012 data at current prices, this is equivalent to around P275 billion to P300 billion.

The data showed that the overall SPI average of countries included in the report was at 0.110, while the SPI average in Southeast Asia is 0.095. ADB noted that the higher the SPI score, the better for a country.

“The SPI for Southeast Asia is below average, at 0.095, even though the region includes one high-income country, Singapore, and several large middle-income countries, such as Indonesia, Malaysia, the Philippines, and Thailand,” ADB said.

“The SPIs for these five countries range from 0.169 for Singapore to 0.044 for Indonesia. Even though this region’s average GDP per capita is above average, its spending on social protection as a share of GDP is only 2.6 percent,” it added.

The report stated that the Philippines’s SPI score for social insurance was at 0.068, social assistance, 0.011; and labor market programs, 0.005.

Social insurance refers to social protection schemes that help people respond to common risks, such as illness, old age, and unemployment. It includes health insurance, pensions, and unemployment insurance.

Social assistance, on the other hand, provides transfers to groups, such as the poor, who cannot qualify for insurance or would receive inadequate benefits from such a source. This includes cash or in-kind transfers, child welfare, assistance to the elderly, health assistance, disability benefits, and disaster relief.

The ADB said active labor-market programs help people secure employment. These include skill development and training programs and special work programs, such as cash- or food-for-work programs, as well as unemployment insurance or severance payments.

“There are many vulnerable groups, including women and informal sector workers, who can’t access unemployment, health or other social insurance but are also not poor enough to be eligible for social assistance such as cash transfers,” ADB Regional and Sustainable Development Department Director Bart Édes said in a statement.

“Government social-protection programs need to be expanded to cover this unprotected ‘missing middle,’ who are at risk of falling into poverty in the case of an economic, environmental, or health shock of some kind,” he added.

The study, which analyzes government programs providing social insurance, social assistance, and labor -market support in 35 countries across Asia and the Pacific, shows varied spending patterns across income groups and subregions.

The new SPI was prepared by the ADB and development partners: the Organization for Economic Cooperation and Development (OECD), the OECD Korea Policy Center and the International Labor Organization. –Cai U. Ordinario, Businessmirror