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Compared to its neighbours, the Philippines isn't reducing poverty fast enough.
FATIMA ESMAEL, a young mother of two in Cotabato, dreams of having a house of their
own. Her husband, a pedicab driver, earns six dollars on a good day, just enough to pay for rice
and bare necessities, forcing them to stay with relatives. “My wish is for us to escape poverty,”
she said.
Eliminating poverty has always been a major challenge in the Philippines. Across
generations, the country’s leaders vowed to bring the poverty numbers down but it seems to
In the last decade, however, there were strong indications that the Philippines has
started to make a serious dent on poverty, raising hopes for the likes of Fatima that the country
Our recent study titled Making Growth Work for the Poor: A Poverty Assessment for the
Philippines has found out that the national poverty rate fell to 21.6% in 2015 from 26.6% in
2006, based on the latest Family Income and Expenditure Survey. Poverty decline was more
rapid particularly in 2012 until 2015. With a strong economy, it’s likely that this trend continues
up to this day.
What drives poverty reduction in the past decade? Three things stand out.
First is the increase in farm wages and the rising number of Filipinos getting incomes
year. While many of the poor who left agriculture landed informal services jobs, they still get
incomes a bit higher than what they would get from farm-related work. Most of the poor are
The second reason for the poverty reduction are transfers from social programs,
contributing 25% in the reduction of poverty. Foremost of these transfers is the Government’s
Pantawid Pamilya, the government’s primary social assistance program. Expanded in the last
few years, Pantawid extends cash grants to 77% of poor households and contributes to
reducing poverty and to building of human capital — meaning that the children of poor families
remain in school and stay healthy. This trend is consistent with the global experience with the
And the third reason: remittances from both domestic and foreign sources contribute
School enrollment has notably increased in recent years, with universal and mandatory
kindergarten as well as two years of senior high school added to the education cycles. Pro-poor
policies and changes to health insurance coverage have resulted in increased use of health
services. Access to clean water and sanitation and electricity has improved. Social safety nets
Despite these gains, however, there are still around 22 million Filipinos living below
Compared to its neighbors in the Southeast Asian region, the country isn’t reducing
poverty fast enough. While Vietnam, Indonesia, and China have been reducing poverty at 2.1 to
2.4 percentage points per year measured by the international poverty line, the Philippines’ rate
of poverty reduction has been less than 1 percentage point each year in the past decade.
One challenge is the pattern of growth that is less pro-poor than the country’s
neighbors. The country’s agricultural sector which employs most of the country’s poor has seen
Workers moving out of agriculture in the Philippines have generally ended up in low-end
service jobs. This contrasts to the experience of countries like China, Indonesia, Malaysia, and
Thailand which generated larger number of manufacturing jobs to absorb those leaving the
farm sector.
high concentration of income and wealth limits equality of opportunity and impedes equitable
Poor people start life at a disadvantage. Malnutrition, lack of resources, poor access to
quality health care, low education, and skills limit their lifetime earnings.
continuously push vulnerable groups into poverty and jeopardize long-term development of the
“I lacked education; I only finished high school so I ended up selling street food here in
Manila,” says Rommel Punzalan, father of four. “I wanted to become a mechanic. I need to
work very hard so I can send all my four children to school. I want them to finish college.”
The country needs to do much more to help the likes of Fatima and Rommel escape
poverty.