Globalization does not always equalize the playing field among the rich and poor nations as it was originally envisioned.

This is because the three factors of production – land, labor and capital are not equal among nations.

Some people do not own land or land is expensive to obtain in some countries compared to others. Labor cost is also more expensive in some than others – or are less efficient thus increasing the cost of production. Finally, there is no capital available in some nations or worse, is available at prohibitive costs that erase the margins the poor enjoy on their small business. These are sets of reality in the Philippines today.

These are the thoughts that go through our minds as we lament the fact why despite the so-called rosy government economic figures, there are more hungry Filipinos today than ever according to the SWS Survey this year. Of course, on numbers alone, a 4.7% Philippine growth rate is always netted out of a 2.4% population growth rate to get the effective growth rate of the country. In this case, the country grew by a net of only 2.3% and with an inflation rate of 7.5% in 2005 - the latter figure indicating the growth of price in the marketplace. Where indeed would that place Juan de la Cruz?

As an aside, we would like to point out that the recent published government statistics of population growth of 1.9% is a mere projection, a speculative number, which does not conform to reality. Doctor Ernesto Pernia, a professor of the University of the Philippines School of Economics, nonetheless postulated that the country should have had a population growth rate of only 1.5% in the last ten years to have a significant impact on the quality of life of many Filipinos.

We must also remember that even if the Philippines obtains a nominal growth rate of 5.0% per annum, this compares unfavorably with the 6.6% average growth rate of most East Asian nations, our neighbors. A 5.0% is certainly a far cry from the 7.0% growth rate for 7 years – admitted in the Medium Term Plan of the Philippines as the combination that will markedly improve the lives of the poor.

Structurally, we are still an agricultural land and most of the abject poverty can be witnessed out there in the rural countryside. It was only in 1986 (after the fall of the decadent dictator) that some semblance of land reform took place. For the last 20 years (1986-2006) some 7 million in lowland properties (rice, sugar, corn) were distributed to the poor in the Land Reform Program of the government. Since the time of the late great president Ramon Magsaysay, the battle cry has been “to give land to the landless” as a fulcrum of the campaign to alleviate grinding poverty.

There is still a further need to redistribute the millions of hectares of upland to the poor and create the new wave of factor distribution to rekindle hope among the agri uplanders, according to NEDA Secretary Boholano Romulo Neri.

However, and moreover, we are aware that the quality of labor – measured in terms of their experience, technical competence and education – do not suggest that labor cost in the country is inexpensive. We are not steeped in modernization modes. Something we unfortunately lost when the landlords severed ties with the farmers during the course of the Land Reform Program. Nor has the marketing skills been transferred from landlord to petty farmers to make the latter competitive.

Finally, the issue of capital being withdrawn by the landlord sector (after Land Reform) has left the small time farmers to fend for their own capital needs with their meager resources. For years they have been victims of the corrupt and expensive loan shark system with the more benevolent ones charging up to (60% per annum interest rate) or 5% per month.

The time would come when, even after distributing the land the Land Reform will still be a failure because the other factors of production are not addressed.

Immediately, we can suggest to government to consider two things: (1) increase its micro-finance collateral free program to the poor sector and (2) mandate bank to accept agricultural land, henceforth, as acceptable as collateral. Likewise, the Philhealth insurance program must be made more permanent (not just an electoral ploy) because a sick person is not just an unproductive person but burdens the productive ones with the task of taking care of him and thereby neglecting their jobs.

It is noteworthy that banks like the Bank of the Philippine Islands, the Hongkong and Shanghai Bank, Planters Development Bank, Allied Banking, UCPB and Citibank are looking at ways to promote wholesale microfinancing through NGOs and the like. Certainly, we cannot leave this gargantuan task of filling the financing gap to government alone.

The Grameen Bank in India, years ago, proved the collateral-free micro-finance loans to the poor had a very high batting average in terms of payment. Given the proper education and tight supervision, we do not see why the replication of the Grameen Bank cannot be done in this country. Even the HKSB had done microfinance in countries where there is a high incidence of poverty like Brazil and India.

Why not in the Philippines, too?