ADB goads PHL, Asia-Pacific peers to raise social protection spending

The Philippines and other middle-income countries in Asia and the Pacific need to increase spending in labor, assistance and social insurance programs to protect the poor and vulnerable people from unforeseen events, an Asian Development Bank (ADB) report Wednesday showed.

Social protection systems in many of the region's fast-growing economies fail to support such people that they are left exposed to risks and unexpected difficulties like unemployment, ill health and natural disasters, the Manila-based ADB noted in a study, “The Social Protection Index: Assessing Results for Asia and the Pacific,”

[http://www.adb.org/sites/default/files/pub/2013/social-protection-index.pdf]

“Many countries—especially middle-income countries—are spending far too little on social protection,” the report read.

Philippine spending on social protection initiatives such as social insurance, social assistance and labor market programs is at 2.5 percent of gross domestic product (GDP), way below the recommended 5 percent, the report noted.

This compares with high-income countries like Japan, Korea and Singapore which, on the average, spend 10.2 percent of GDP for social protection programs.

Upper middle-income economies allot 4 percent of their output, and lower middle income 3.4 percent. Low-income countries spend 2.6 percent of GDP.

Social protection spending of “5 percent of GDP... is a realistic medium-term objective for middle-income countries in Asia and the Pacific,” the report read.

“However, spending in most middle-income countries, including Armenia, Fiji, India, Indonesia, Pakistan, the Philippines, and Samoa, remains below 3 percent of GDP,” the ADB said.

Sought for comment, Philippine Economics Society president and University of Santo Tomas economist Alvin Ang said social spending has been increased by the Aquino administration from the ADB report's data that were taken from 2009.

“Ang social protection framework ngayon pa lang pumapasok. The government has increased spending for such initiatives and I think more will come in other than CCT (conditional cash transfers),” he told GMA News Online.

Despite saying that achieving social spending of 5 percent of GDP is still a long way, Ang claimed the government is on track with regard to social protection.

“Moving forward there are a lot of social protection agenda still in the pipeline like social health insurance and labor intensification,” he said, referring to the recently signed National Health Insurance Act of

2013 that gives health coverage to all Filipinos and labor initiatives under the Philippine Development Plan.

The ADB said increasing social protection coverage requires shoring up “additional public revenue which can be secured by broadening the tax base, improving tax collection, and improving public expenditure management.”

The bank told governments to encourage the private sector contribution “... to social insurance programs.”

“After many years of high growth, the Asia and Pacific region is in an excellent position to invest in better social protection systems that are attuned to the needs of its people,” the ADB said in a statement. — VS, GMA News

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