Pastoral Exhortation on the Philippine Economy
In this time of crisis in the regional economy of East Asia, all the efforts of the government and private business are geared towards getting the economy back on track. It is a concern we all share for the simple reason that the crisis means greater hardship and suffering, for our poor most especially.
The concern is all the more intense in that in this, our Christian nation, the gap between the richest and the poorest of our people is a scandal that gets more intolerable each year. It makes us ask whether the track our economy has been on all these years is, when all is said and done, the one to be on at all.
The question is most germane to our striving for renewal against the dawning of the third millennium two years from now. And it is especially significant in this centennial year of our independence as a sovereign nation as we take stock of ourselves as a free people and look to where we are headed.
Part I: The Economic Situation
We in the Philippines, have not been hit as hard as our neighbors in the ASEAN Countries of Thailand, Malaysia and Indonesia. The causes of the financial collapse of this countries are many and varied: unhealthy banking systems, unfettered borrowing and spending, bad government financial policies. In all these countries, it is the poor who suffer the most.
Although we said we in the Philippines have escaped the worst effects of the general economic slowdown in the region, this does not mean things are all right with us. There has been some success in the past Administration’s efforts to improve the economy. But as a 1998 US State Department Report recognizes, the disparity between the government’s economic programs and its real effect on people’s lives is quite large and points out how the government’s “social reform agenda” has made little progress.
Government spending on such priority concern, as basic education and health care and low-cost water supply was low and poorly targeted. At the same time it has tolerated, even backed, “development aggression” –the kind of development that is hurtful of the environment and or our poorest sectors-indigenous peoples, for instance, and their rights to their ancestral domains and cultures, fisherfolk and their lessened control over fishing grounds, etc.
There is a financial crisis in the simple fact that the peso has been devalued in relation to the US dollar, thus making imports more expensive and our huge external debt ($42.6 billion-last year) harder to service. The OFWs (overseas Filipino workers) in their remittances are the one big support of our failing economy — an ironic fact in that they are OFWs precisely because they cannot find good jobs in their own country.
Corruption in and out of government is endemic and is one main hindrance to economic growth. Billions of pesos that could well be spent on uplifting the life of our people end up in the pockets of unscrupulous government officials. The “pork-barrel” funds of Congress, for example, are accepted generally as a corruption-laden institution but to date nothing has been done about it. Most applicable to our situation is what John Paul II wrote about the evil of corruption as destructive of social and political development services essential for their development. (cf. World Day of Peace Message, 1998).
The whole world is now subject to the economic phenomenon called globalization –the widening of international flows of trade, finance and information in a single integrated market. “A liberalized national and global markets which will, it is believed, produce the best outcome for growth and human welfare.” (UNDP HDR, p. 82)
Globalization demands the liberalization and deregulation of a nation’s economy if it is to compete in the world market, share in its economic gain. But seeing the disparities that it brings about, we must seriously question the waste with which globalization has been enhanced as dogma and implemented as policy: Have not the hasty drive towards industrialization and the liberalized entry of foreign developers and investments into the country, compounded by the liberal infusion of vast amount of borrowed foreign funds into our developing economy, exacerbated, rather than eased, the economic situation? The policy, we are afraid, has resulted in an even more shabby treatment of the poor.
Part II. The Social Teachings of the Church
We look for a form of economic development with a human face one that takes the plight of the poor as a primary consideration, ensures that social justice is achieved, the benefits of development shared equitably by all, and the economic gaps and imbalances of society removed. We cannot as bishops provide the precise blueprint for that kind of economic development. But we can, in the social teachings of the Church, give “principles of reflection, criteria for judgment and directives for actions”–guidelines, that is, for moral conduct in economic questions.
We start with the centrality of the human person and human solidarity: the human person, because he is the subject of rights that no one, not even the State, can violate having been made into the image of God, having been made unto the image of God; solidarity, because people are social beings and have to strive together for the common good of all. Any economic development hence that would diminish people, that exploits and ultimately destroys them has to be resisted by all in solidary action.
Option for the poor is another principle-it is a specific form of solidarity. In the globalized economy that we have now, we see it is the poor who suffer most from its excessive profit orientation. This was what impelled John Paul II to call for globalization in solidarity and without marginalization.
The third principle is the biblical truth that God created the earth and its natural resources for the good of all, to be fairly shared and enjoyed by all. Hence we have to reject the continuing concentration of economic power in the hands of a few and its concomitant mass poverty. We look for businesses that create jobs, open to the public ownership of corporations, invest in rural areas for the sake of the poor.
The human person has the God-given vocation to work–it is through work he shares in God’s productive activity. But in today’s world, know-how, technology and skill are needed for people to engage in productive work. This requires education, and we ask that government budgets for education, basic education especially, should not be sacrificed for other services.
In the Philippines, land still is for the majority of our people the main venue of work and productivity. The government recognizes that agrarian reform is the centerpiece of the development of the nation. Its comprehensive Agrarian Reform Program (CARP) must hence be strengthened and pursued more aggressively.
One of the most significant principles of the social teachings of the Church is that labor has priority over capital, workers’ rights over profit. As John Paul II puts it in his encyclical on labor, the principle means that “labor is always a primary efficient cause, while capital, the whole collection of means of production, remains a mere instrument or instrumental cause.” (LE, 12). In the light of the above, serious questions have to be raised on the basic attitudes of businesses in regard to labor unions, collective bargaining, just wages, working conditions and the like.
After the collapse of socialism in Eastern Europe, the belief began to grow that the capitalism of the West with its free market system had finally emerged totally victorious and even the Pope acknowledged the fact. The truth is that he still warns against a radical capitalist ideology that is “unconcerned about marginalization and the exploitation of the weak” (CA, 42). From this we see the need for the government to dismantle all kinds of cartels, to prevent price increases, to enact laws that are truly for the common good, to stabilize the currency and act against currency speculations, etc.
International agencies, like the world bank, the international monetary fund, and the world trade organization must not be instruments of economic domination by superpowers but must help to level the playing field for all, to guarantee fairness and equity in international economic relations between developed and less developed nations. They too must have an option for the poor.
The Church has a prophetic role to play in the economic order, more so in its globalized form. The Pope’s concern for the marginalization and exploitation of the weak finds an echo in the UNDP Human Development Report of 1966 (pp. 6-7) which speaks of present world economic growth as jobless, ruthless, voiceless, rootless and futureless. If globalization means unadulterated laissez-faire capitalism, it is an order that the Church’s social teachings have always condemned for being too materialistic.
A caring economy — development with a human face — this is what we look for. It does present an alternative to materialistic models of development, socialist or capitalist, that obtain today. It asks that both access to and ownership of economic capital and production be dispersed, not favor entirely owners of monetary institutions, well established landlords and politicians and act responsibly in regard to national resources and the economic means of production.
Lay people whose specific vocation is the renewal of the temporal order have thus a strong prophetic role to play in the economic order. Businessmen, politicians, landlords, power-holders–if they are Christians, they must lead in working for an economic system that will truly promote the common good of all, not just theirs.
Part III. Recommendations
We leave technical solutions and the management of the present financed crisis to experts. And we ask is that the ethical and religious values we have been talking about above be in the forefront of all efforts to improve the economy. But still there are some “doables” that we can recommend.
We reiterate one of the important decrees of the second Plenary Council of the Philippines: the task of social action to “set up special programs to address such crucial issues as peace and economy, agrarian and industrialization concerns, the exploitation of women and minors and overseas workers, children and youth, and intensify the organization of the grassroots people or empowerment and self-reliance through cooperatives and livelihood programs and projects” (PCP-II, Art. 23, #1).
We should facilitate domestic saving and increase access to credit by supporting the microsaving and microfinance activities of the poor and by linking them to formal savings and credit institutions (see World Bank, SFPP, Annex B, “Microfinance in the Philippines,” pp. 62-65). Such access to credit by the poor should be facilitated by interest rates within their reach.
In the light of the principle of subsidiarity, the government should support, rather than penalize, the informal economy of small independent producers and sellers; this is the real safety net of the poor.
Safety nets should be well targeted on the most vulnerable groups; likewise the Social Reform Agenda must be better targeted.
Increase rather than reduce investment in human development–health and education; evaluate the privatization of health and welfare services before going further; focus on public education resources on improving grade-school education, rather than on turning out more law and commerce graduates.
Rural development and food security must be ensured as further industrialization is promoted. Genuine cooperativism and the establishment of cooperatives among the poor should be encouraged and supported without any political patronage. Agrarian Reform must be pushed forward resolutely, decisively, and rapidly.
In line with the example of the early Christian communities, widespread sharing of resources must be practiced, as in the program of Alay Kapwa, in small communities, and at the level of parishes and dioceses.
As a sign of goodwill, legislators must give up their Countryside Development Funds and their membership in legislative committees that involve conflict of interest on their part.
Monopolies and control of business through franchises and control of choke points should be eliminated.
Revise the tax system, particularly the assessment of land taxes and all other tax provisions that lead to corruption.
Restore people’s confidence in the system by greater transparency.
Equal opportunities, responsibilities and participation in development must be given to women.
R.A. 8042 on OFWs should be fully implemented, a fast and effective mechanism for OFWs to invest in the Philippines created..
A culture and work ethic that prizes competence, efficiency, and production as the key to success, and support this with appropriate reward structures.
Partnerships for change among all agents of society should be established – trade unions, the media, community groups, private companies, political parties, academic institutions, professional associations-the “intermediary groups” of social encyclicals. Pope John Paul II called for a “social pact” among such.
Work at the international level for the establishment of a rule of law which goes beyond the rules of the market place and protects the poor and the weak.
Work at the international level for the reduction or even cancellation of external debts in accord with the Jubilee norms of Leviticus.
Finally a deep and participatory assessment of and investigation into the type or model of development the government wants to pursue should be conducted, particularly as it impacts on the poor. This includes, in particular, economic policies on liberalization and deregulation, relationships with the WTO, IMF, and World Bank. The efforts of various NGOs in search of a more caring development model should be encouraged and supported.
The message that we wish to give in this critical look at our economy is this: only when economic relationships, policies, programs, and structures are thoroughly infused with moral principles that put the face of God and the many faces of the poor into the picture, only when we as a nation shall do away with greed, selfishness, unhealthy competition, and the concentration of power and wealth in the hands of the few will true economic development take place. This should be development with a human face.
For this to be realized, solidarity must be forged among ourselves, but especially with the poor. Such solidarity must likewise be international, among First World and Third World countries. We need to recognize what globalization with solidarity ultimately means, namely, the unity under God of the one human family where there should be no exploitation, no impoverishment, and no injustice; where the goods of the earth and the benefits of development are fairly distributed. This vision is nurtured by Christian hope, which assures us that in the end good will triumph over evil, life over death, love over hatred, generosity over greed.
It is also Christian hope that convinces us that, though the years ahead will be years of the Cross, years of struggle and sacrifice, with the grace of God the Filipino shall prevail.
For the Catholic Bishops’ Conference of the Philippines:
+OSCAR V. CRUZ, D.D.
Archbishop of Lingayen-Dagupan
12 July 1998
The Catholic Bishops' Conference of the Philippines
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Pastoral Exhortation on the Philippine Economy