Poverty Rate

"The oppression of self is the state of poverty." The number one issue of the world is poverty. The
condition of lacking or inadequate financial support of the basic needs of the family is considered
poverty. The poverty is the dogma of hindrance to the growth of economics. Poverty kills inclusive
growth and the future development of a country. Poverty symbolizes low literacy, high crime rate,
rampant corruption, slow development of infrastructure, high mortality rate, closing of businesses, very
few investors, high unemployment rate, high debt, rebellion, inflation, and other negativities in life.

Poverty is the condition of being poor. Poverty rate is the percentage of population with certain number
of people who belong to poor. The classification of being poor, according to the world perspective,
belongs to Third World countries. Third world countries lack resources and have unstable financial
status.

Negative Mindset + Negative Attitude + Negative Action = Possibility of Poverty

Figure: Behavioral Factors of Poverty

It concludes into one root cause. “Poverty starts with the wrong thinking and followed by wrong
attitude." Laziness, hopelessness, bad culture, bad leadership, selfishness, and having no plan in life are
indications of poverty. Negative mindset begins with poor decision-making. Negative attitude comes
with bad practices and bad ways. Moreover, negative actions are wrongful implementation of chosen
decisions. The behavioral factors of poverty assume possibility of poverty in rational sequence. High
poverty rate is associated to bad decisions in life.

In 2009, the Asian Development Bank studied the causes of poverty in the country. On the part of
economics, the main causes of poverty are: low to moderate economic growth for four decades, low
growth of elasticity in the reduction of poverty, not fully developed agricultural industry, weak quality of
jobs and employment, crisis that causes high inflation rate, high population rate, high level of inequality
due to income and assets, and shocks and exposure to natural disasters, poor environment, conflicts,
and economic crisis.

Poverty Rate Formula:

Ratio: Family Income > Poverty Threshold

Analysis: Ideally, family income should be greater than the poverty threshold. Poverty Threshold is the
minimum amount of family income that will cover the expenses for the basic needs of the family. Once
the family income is lower than the poverty threshold, it is classified as poor.
Poverty Rate = Number of Poverty Family/Number of Families in Country x 100 %

Ways to Mitigate Poverty

 Eliminate graft and corruption

 Ensure education for all
 Greater job opportunities for everyone, both local and abroad
 Increase of entrepreneurs in the country
 Encourage foreign investment
 Strengthen international business and trading
 Develop strong pool of scientists, engineers, allied health, and other technological professions
 Establish good leadership of the government and private entities
 Have feasible community plans and programs
 Ensure justice, peace, and order
 Implement timely and appropriate laws
 Make the people law abiding, disciplined, hardworking, and cooperative
 Broaden health programs to have healthy and productive citizens

Figure: Ways to Mitigate Poverty

"Love of country eliminates poverty." The threshold of poverty is aggravating the future of the country.
High poverty rate is not ideal for the economic development and sustainability. Low poverty rate is a
strong indicator of a progressive country. Therefore, for the betterment of everyone, it is more
encouraging to be loyal to the country and its citizens.

Wealth or Poverty?

Leaders

Citizens

Figure: Economic Status Pyramidic Goal

Labor Rate

Strong manpower productivity builds labor outputs. Outputs are convertible to income which will be a
source of taxes. Labor rate is the percentage of the number of employed person over the working
population of the country. Labor rate is also called employment rate. "High employment rate means
having better lives, income, and taxes. Low employment rate assumes increase of negative impact in
the country as well as in personal life."

The effect of war, pandemic, epidemic, catastrophe, and other perils force the business to close,
downsize, layoff, and enforce other cost-saving ways. During pandemic and war, the economy suffers
the effects of uncertainties while losing livelihood. Devastation affects the lives of people and
unemployment rate increases. Unemployment rate is the percentage of people without jobs over the
population of working population. The working age is 15 years old to 64 years old. The working age is
also set depending on the measurement of the government. Working age also varies in the future
depending on the standard.

Labor rate counts the employment of citizens working locally or outside the country.

Overseas Filipino Working (OFWs) are part of the labor rate. OFWs temporarily work abroad.

Workers, both land based and sea based, are counted in the employment rate. OFWs are also called as
Overseas Contract Worker.

Employment gap is the period of unemployed status of a person. The unemployed Period starts from
the moment a person stops working. Underemployment is the status of mismatch of employee’s
qualification to the required working position or job like when a nursing graduate works at a call center
as customer service agent. Both employment gap and underemployment are the issues that the
government, companies, and people must address.

Some people are underemployment because of the lack of opportunities from the field of employee’s
specialization and personal desired.

Ways to Increase Employment Rate

1. Know the current and future jobs covering both local and foreign countries.

2. Open to a position based on the needs of a company.

3. Open to a position based on the manpower workforce qualification.

4. Open to a position based on the needs of the country. For example, during COVID-19 the local
government opened "contact tracer" position.

5. Balance technology and employees’ skills. Do not terminate an employee because of the infusion of
new technology in the company. The goal is to increase outputs. For example, an employee can produce
10 outputs per day while with combination of employee and technology, 30 outputs can be produced.
Make sure to do proper cost benefit analysis.

6. Conduct expansion strategy like branching, franchising, and other forms of distribution.

7. Look for investors (angel investors like co-partnership).

8. Set flexible laws that will encourage investors to open business in the country.

9.Tie up with foreign companies.

10. Go borderless. Work in international setting by maximizing trading and online technology.

11. Open opportunities in agricultural jobs, service jobs, and other skills-based industry.

12. Open scholarship for education both academic and skills based.

13. Create data pool of workers and coordinate with foreign companies for job opportunities as lateral
agreement.
14. Have budget allocation on infrastructure jobs because the physical development of a community
follows egress or investment of companies to the newly developed place.

15. Offer attractive benefits to the applicants.

16. Reduce interest rates for companies.

In the end, a productive country is a sign of inclusive economic growth and sustainable environment. Let
the statement of "people work according to their calling" be the mantra of leaders and citizens.

OFW Remittance

Most of Filipinos are intelligent, skillful, hardworking, cheerful, and persistent. One of the top products
of the Philippines is the employment service abroad. There are lot of Filipinos who are staying and
working abroad. Occupations offered abroad are nurse, caregiver, domestic helper, engineers,
accountants, managers, waiter, restaurant and hotel work, administrative work, retail personnel, driver,
construction worker, seaman, teacher, information technology worker, and many more. These make
Filipinos well known in the world because of being competent.

Most of the Filipinos work abroad to provide good future for their families. Some Filipinos also help their
relatives, buy properties, and invest in business and other forms of increasing income. OFW remittance
has been the income for the family and added to the growth of the economy. OFW remittance is part
and parcel of GNP. Some remittances are taxable depending on the status and regulations. OFWs are
also called modern heroes (Bagong Bayani) because of their sacrifices and contribution to the economy.

Cycle:

OFW - Remittance – Economy – OFW

Figure: OFW Remittance Economy

The OFW remittances are advantageous because of the following results:

1. Exchange rate. The cost of imported goods decreases. When there are more remittances, citizens
could buy foreign products. This results in weakened value of other currencies.

2. Family income increases. The family could pay for the goods and services that they want to buy for
their family members. In effect, household income increases by numbers. Spending cost increases. The
purchasing power of consumer increases.

3. Foreign reserves. OFW remittance adds to the value of increased foreign reserves. Some examples of
foreign reserves are gold, foreign exchanges, and foreign investments.

4. Form of tax income for the state. This helps the country to allocate budget for creating projects and
programs that will alleviate poverty, sustain the economy, and develop better communities.
5. Lifestyle improves, Because of OFW remittances, the family could enhance their standard of living.
They could spend for leisure, entertainment and send children to private schools. They could also buy
gadgets, machines, invest in properties and business.

6. Surplus. The country earns more dollars as compared with spending. The balance payment of a
country is comparable because when the income is high, debts can be paid.

Foreign Investment

Foreign investment is a great tool for economic development and an effective business growth strategy.
Foreign investment is the act of investing in another country in the form of ownership and asset.
Foreign direct investment is a business strategy of a company investing into another country by
installing factories, plants, and renting buildings. Companies will open branches and satellite offices into
foreign countries as part of their expansion. Foreign indirect investment is the process of buying stakes
or shares in business corporation and financial institutions. The foreign indirect investment could also
subject to stock exchange, loans, and bonds.

Foreign Direct Investment - Foreign Investment

Foreign Indirect Investment - Foreign Investment

Figure: Foreign Investment

Investment has been widely used by multinational companies as part of their business growth strategy.
Foreign investment helps the economy and business on the following matters:

1. Opening of local jobs

2. Bringing capital resources

3. Source of tax

4. GNP and GDP growth

5. Form of international business and trading

6. Globalization

Two ways for country to increase GNP through Foreign Investment:

1. Pull Foreign Investment - allows investors to conduct foreign investment to other countries. This may
bring resources from the home country to the foreign country. The home country is where the company
originated. The foreign country is the other location where business will be expanded. The state collects
taxes from the foreign company.
2. Push Foreign Investment - This means local companies or investors will conduct business investment
into other countries. This will provide income for the local mother company in the home country. For
example, a company opens a branch in the USA. The US currency is dollar which means greater in peso
value. The income will eventually increase because of the revenue generated and currency exchange
values.

Furthermore, the government may encourage entrepreneurs to conduct business both in local and
international setting to help the economy. The government can support entrepreneurs by creating
projects and programs that will motivate them and ease the business process. It will also be a good idea
if the government will conduct business in foreign market as way of increasing the GNP. Of course, prior
of doing the business; it needs to be part of a law and comply with requirements of both local and
foreign countries.