Poverty remains a serious problem in the Philippines, which is the only populous country in East Asia in which the

absolute number of people living on less than $1 a day remained constant over the 19811995 period, according to figures compiled by the World Bank. That body estimates that even if the Philippine economy posts a 6 to 8 percent growth through 2005, it will still not be possible to bring the poverty level below 15 percent. Economists believe that it may take some 20 years of continuous economic reforms and implementation of social programs before the country can match the singledigit poverty figures of its more wealthy neighbors. In general, widespread poverty in the country is a direct result.

GRAPH -Download

GDP per Capita (US$) Country Philippines 1975 974 1980 1,166 21,529 168 504 1985 967 23,200 261 603 1990 1,064 25,363 349 778 1998 1,092 29,683 727 972

United States 19,364 China Indonesia 138 385

SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.

Poverty

Poverty is the result of inappropriate and unresponsive economic policies, mismanagement of resources, corruption, and failure of the government to implement anti-poverty programs.

Economic policies from the 1960s to the 1980s focused on a capital-intensive, import-substituting strategy, which bred inefficient industries and contributed to the neglect of the agricultural sector. Policies promoting industrialization favored the development of urban areas to the detriment of rural areas, most of which remained underdeveloped. At the outset, urban areas, especially Metro Manila,

cornered major infrastructure and social projects, thereby attracting most of the investments and jobs in the manufacturing and industrial sectors. In contrast, living standards in the rural areas continued to decline, leaving most of the peasant communities to subsist on a hand-to-mouth existence.

GRAPH

The mid-1990s witnessed a significant increase in income inequality. Only the top 10 percent of the population increased its share of total income.

Distribution of Income or Consumption by Percentage Share: Philippines Lowest 10% -----------------------------------------------------------------2.3% Lowest 20% -----------------------------------------------------------------5.4% Second 20% -----------------------------------------------------------------8.8% Third 20% ------------------------------------------------------------------13.2% Fourth 20% -----------------------------------------------------------------20.3% Highest 20% ----------------------------------------------------------------52.3% Highest 10% ----------------------------------------------------------------36.6% Survey year: 1997

Note: This information refers to expenditure shares by percentiles of the population and is ranked by per capita expenditure. SOURCE: 2000 World Development Indicators [CD-ROM].

Poverty 2006

According to the Users Forum (Republic of Philippines) on the 2006 Poverty Statistics for the Basic Sectors and 2006 Child Development Index ( June 25, 2009, Dusit Thani Hotel), previous computations on poverty cover the years 2000 and 2003, which were not released until September 21, 2007. On March 9, 2009 the National Statistics Office (NSO) provided the necessary data file (i.e., the merged data files of the Family Income and Expenditure Survey (FIES) and the Labor Force Survey (LFS) to the NSCB Technical Staff. The 2006 official poverty statistics for the basic sectors were computed using these latest datasets.

Of the fourteen different categories in the basic sector our main concerns are:
y y y y

Women: An individual whose declared sex is female Youth and students: Youth Persons 15 to 30 years old Children: Persons below 18 years old Urban poor: An individual residing in an urban area whose income falls below the official poverty threshold

Data sources
y y

Family Income and Expenditures Survey (FIES) 4th quarter round of the Labor Force Survey (LFS) undertaken in January of the proceeding year of the reference period Census of Population and Housing (CPH). Philippine Official Poverty Statistics

y y

Both FIES and LFS follow the Integrated Survey of Households (ISH) sampling scheme, making the estimation of poverty incidence straightforward. For example, the poverty incidence for children is:

Number of poor children Poverty incidence children = -----------------------------------Total number of children

Poverty is a characteristic of the household. Thus, if a household has been classified poor, then all members of the household will be counted as poor. In other words, a household cannot have poor and non-poor members; either all members are poor or all members are non-poor.

The statistics show that children comprise one of the three poorest sectors in 2006 with poverty incidences of 49.9%, 44.0%, and 40.8%, respectively. All sectors posted increases in poverty incidence between the period 2003 and 2006. Children, women, and urban poor accounted for the largest number of poor population at 14.4, 12.8, and 6.9 million in 2006. Magnitude of poor population for all sectors increased between the period 2003 and 2006 with children accounting for the largest number of poor population among the basic sectors.