Tackling rural poverty: land reform is failing Filipinos

Photo: IRRI

The government in the Philippines has implemented land redistribution policies for decades, but they’ve failed to reduce rural poverty rates.

By Zachary Frye

Over successive generations, the Filipino government has been committed to reducing poverty rates among rural communities. Land reform was pursued for decades, but resilient rural poverty numbers suggest it should be scrapped.

Conditional cash transfers have a better track record at boosting social mobility among poorer citizens. Its expansion could help make a more substantial dent in Philippine poverty levels.

Land reform has failed to reduce rural poverty

Although the distribution of land to rural farmers was practised for decades in the Philippines, it didn’t receive widespread support until the Aquino administration in the late 1980s.

Workers work fields on the island of Luzon.
Photo: Edward Musiak

Since 1986, the Comprehensive Agrarian Reform Program has redistributed over 4.8 million hectares of private and public lands. An additional 2.5 million hectares of government land not covered by the reform program were also issued to farmers over the years.

Despite these efforts, rural poverty remains widespread. Dr Patricio Abinales of the University of Hawaii-Manoa told ASEAN Today, “the overall picture of agrarian Philippine [sic] remains dismal – there has hardly been any change in the percentage of rural families classified by the government and international aid agencies as poor.”

According to the Asian Development Bank, 46.3% of the rural population in the Philippines was poor in 1988. In 2006, it was 45.8%.

Cash transfers are a promising alternative

Since 2007, the Philippines has introduced a conditional cash transfer scheme known as the Pantawid Pamilyang Pilipino Program (4Ps). It provides cash assistance to approximately 20 million poor Filipinos around the country, reaching nearly 20% of the total population.

The program consists of two types of payment mechanisms: a health grant and an education grant. Each qualifying household receives 500 Philippine Pesos [US$10] per month for the health grant and 300 to 700 Pesos [US$6 to US$13] per month (depending on the age of each child) for the education grant.  

The money can be used as beneficiaries see fit as long as they meet the program’s compliance conditions. The majority of the money is spent on essentials like food and education.

The eligibility conditions include mandatory vaccines and deworming medicine for young children, school enrollment and attendance thresholds, pre and post-natal care for mothers, and family development sessions for parents.

A new law signed by President Duterte on April 17, 2019, buttresses the program by modestly increasing certain payouts and adding an inflation provision.

A World Bank study in 2015 deemed the program a success. The program is directly responsible for an estimated 1.4% decrease in poverty per year. 1.5 million Filipinos are better off because of 4Ps.

In addition to the economic gains, the conditions are also proving beneficial for poor families in other ways. Households receiving 4P benefits have a near-universal primary school enrollment rate and enjoy a 6% attendance boost among high school students.

The family development sessions teach parents the benefits of staying healthy and engaged, leading to a staggering 39% decrease in alcoholism among beneficiary households. 87% of 4Ps parents are now more optimistic about their situation and their children’s futures.

Mobility and flexibility are paramount for the working poor

A glaring problem for continued land redistribution is the nature of the Philippines’ expanding economy. Although the country has benefited from tremendous growth over the past several decades, agriculture is becoming less prominent.

Agriculture’s impact on gross domestic product (GDP) has declined heavily over the past 30 years. According to the World Bank, it accounted for 24% of the country’s economy in 1987 but dwindled to only 9% in 2018.

Some are finding the amount of land offered is too small to make a decent living. In lieu of strong provincial opportunities, many rural Filipinos are migrating to cities for work.  

In order to align its assistance programs with these economic trends, the government should prioritise cash transfers for the working poor. This would expand the freedom of provincial families, incentivise social benefits, and fuel an expanding economy as workers find it easier to migrate for better jobs.

To be sure, farming will remain an important aspect of the Filipino economy, even as it becomes less influential on overall GDP. The government shouldn’t disregard its agriculture sector but it shouldn’t overemphasise its power to reduce rural poverty either.

As technology and diversification continue to shape the economy, it is crucial that rural Filipinos have the opportunity to remain flexible. If they do, Filipino economic growth will stay on pace and the working poor will benefit from increased agency over their lives and circumstances.