Philippine poverty dates back to colonial policies: this is the situation

MINDANAO, Philippines — Rodino Sawan put on his wire harness and dug his toes into the muddy path through the sweltering plantation. He pushed his body forward, struggling with the load behind him: 25 bunches of bananas hanging from hooks attached to an assembly line.

Six days a week, Sawan, a 55-year-old father of five, tows batches of fruit weighing about 700 kilograms to a processing plant, often while planes fly overhead, spraying pesticides. His daily wage is 380 Philippine pesos, or about $6.80.

One day in 2022, the plantation fired him. The next day, he rehired him as a contractor, cutting his salary by 25 percent.

“We can barely buy rice now,” said Sawan, resigned to the reality that in much of rural Philippines, plantation work is often the only job. The desperation faced by tens of millions of propertyless Filipinos is due in part to policies imposed by the powers that controlled the archipelago for centuries — first Spain and then the United States.

In a region defined by upward mobility through manufacturing, the Philippines stands out for remaining dependent on agriculture. The families that collaborated with the colonial authorities retain control over the land and dominate politics. Policies designed to make the country dependent on American manufacturing products have left the Philippines with a much smaller industrial base than many Asian economies.

“The United States imposed land reform on many different countries in the region, including Japan, because of World War II,” said Cesi Cruz, a political scientist at the University of California, Los Angeles. “In the Philippines, since they were fighting on the same side, they did not want to economically punish their ally by imposing all these restrictions.”

Over the past half century, national leaders in much of Asia have pursued a development strategy that has rescued hundreds of millions of people from poverty, courting foreign investment to build export-oriented industries. However, in the Philippines, factory jobs are few. Manufacturing accounts for just 17 percent of the economy, compared with 26 percent in South Korea, 27 percent in Thailand and 28 percent in China, World Bank data reveals.

Manufacturing shortages and unequal land distribution are part of why about a fifth of this nation of 117 million people is officially poor and why nearly 2 million Filipinos work abroad.

Those who remain in rural areas often harvest pineapples, coconuts and bananas for the benefit of the wealthy families who preside over the land.

Americans did not create the inequality that defines the Philippine economy. Spanish authorities allowed Christian missionaries to seize land while forcing natives to make onerous rent payments.

But after the United States captured the archipelago following a war with Spain in 1898, the colonial administration reinforced unequal control of the land through trade policy. Agribusiness companies in the Philippines gained tariff-free access to the US market. In exchange, American industry secured the right to export manufactured goods to the Philippines duty-free. Tariffs on other countries kept products from the rest of the world away.

The United States used the Philippines as a laboratory for controversial policies, including tying the value of the national currency to gold, said Lisandro Claudio, a historian at the University of California, Berkeley. That kept the Philippine peso strong against the dollar, lowering the price of American goods and discouraging the creation of domestic industry. Even after the Philippines gained independence in 1946, that agreement remained.

Meanwhile, the powerful families that control the companies have lacked incentives to innovate, unlike surrounding economies where land redistribution has created pressures for experimentation.

“Then it forces the next generation to think, 'What can we do to compete?'” said Norman G. Owen, an economic historian affiliated with the University of Hong Kong. “But the US didn't do that to the Philippines, and the Filipinos didn't do that to themselves, and here we are.”

By: PETER S. GOODMAN