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Philippines lags behind Asian neighbors in inequality response

The Philippines was lagging behind its Asian neighbors in terms of addressing inequalities since the outbreak of the COVID-19 pandemic in 2020, a report by the international organization Oxfam showed.

Based on the 2022 Commitment to Reducing Inequality (CRI) index report of Oxfam and the Development Finance International, the Philippines ranked 102nd out of 161 countries in reducing inequalities.

The Philippines ranked 109th out of 158 counties in the previous CRI report in 2020.

The CRI index measures each national government’s efforts to reduce inequality through “public services spending, taxation and labor rights and wages.”

The CRI index showed that the Philippines’ performance under “Reducing inequality through progressive spending” dropped to 106th place in 2022 from 99th in 2020.

The report noted that while the Philippines spends two-fifths of its government budget on education, health and social protection, including pensions, it was lagging behind allocation for the same purposes of its neighbors in East and South Asia such as Mongolia, China, Thailand, Vietnam and Malaysia.

“Compared to the CRI Index released in 2020, the Philippines’ education budget was cut by 15 percent. The health budget increased marginally, while the social protection budget increased by 28 percent,” the report read.

“It’s quite disheartening though not unexpected to see how the Philippines fares compared to other countries when it comes to allotting resources to crucial public service such as education and health. And even if we saw an increase in social protection spending, it is still considered low compared to other countries,” said Oxfam Philippines country director Lot Felizco in a statement yesterday.

Felizco pointed out that while Filipinos have been grappling with unemployment and high cost of food and living expenses due to inflation and the pandemic, the country’s essential health spending remained dismal, with about 55 percent of the population having no coverage of essential health care and being burdened by out-of-pocket health spending.

Felizco said this pushes more people into poverty, resulting in further inequality.

“Health insurance and universal health care service are different things altogether. More Filipinos are registered under government’s health insurance service but not all of them live in areas with nearby hospitals or health facilities with sufficient number of health workers and supplies,” Felizco said.

The 2022 CRI index also showed that the Philippines is still lagging behind in terms of “Reducing inequality through progressive tax policies” (with a rank of 104 out of 161 countries), primarily because of low tax collection (ranking 136 out of 161 for this sub-category).

The report showed that the Philippines collects just 19 percent of potential revenue, well below the regional average of 31 percent (excluding high-income countries), even lagging behind Afghanistan, Sri Lanka and Myanmar, the three countries facing economic and political turmoil.

According to Oxfam International analysis, this shows the likelihood of “widespread tax dodging and evasion by the wealthy and their corporations, excessive tax breaks and weak enforcement measures by the tax authority.”

Under “Reducing inequality through respect for labor rights and fair wages,” the Philippines ranked 92nd.

Among labor indicators, the worst performance was on “respecting labor and union rights according to ILO standards,” with the Philippines ranking 146 out of 161 countries.

“The Philippines, with a minimum wage of 13 percent of per capita GDP, is at the bottom 20 of the countries with the lowest minimum wages, putting the low-paid workers at risk of exploitation,” the report read.

“The results of the CRI Index show how much the COVID-19 pandemic has exacerbated the widespread inequality that Filipinos have already been experiencing. To get out of this situation, the government will need to make immediate and impactful changes,” Felizco said.

Overall, the CRI index report showed that the overwhelming majority of governments around the world cut their shares of health, education and social protection spending, while at the same time refusing to raise taxes on excessive profits and soaring wealth of several corporations.

“The index shows that despite the worst health crisis in a century, half of low and lower middle-income countries cut their share of health spending of their budgets. Almost half of all countries cut their share going to social protection, while 70 percent cut their share going to education,” Oxfam said yesterday in its summary of CRI index report.

“As poverty levels increased to record levels and workers struggled with decades-high prices, two thirds of countries failed to raise their minimum wages in line with economic growth. Despite huge pressure on government finances, 143 of 161 countries froze the tax rates on their richest citizens and 11 countries even lowered them,” it added.

“Our index shows that most governments have completely failed to take the steps needed to counter the inequality explosion created by COVID-19. They ripped away public services when people needed them most and instead left billionaires and big corporations off the hook to reap record profits,” Oxfam International executive director Gabriela Bucher said.

The Commitment to Reducing Inequality Index 2022
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Source: Philstar

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