Poverty: Measuring AntiPoverty Policies and the Relationship of Philippine Economy to

Social Inequality

A research study presented to De La Salle University- Dasmariñas

Dasmariñas, Cavite

Submitted by:

De Mesa, Arrabella A.

JANUARY 2023
 Chapter 1
Introduction

In the socio-economic and political division, the Philippines is in the global south as it is still a
developing country. A unique blend of market forces and government control characterizes the
Philippines' economy. Currently, the inflation rate of the Philippines has increased, and it is getting
out of control. These issues highly affect Filipinos' lives, especially those in the marginalized
sector, specifically in matters like health care, basic needs in everyday life, and education, for
instance, social inequality. Filipinos struggle to make ends meet in today's economically stagnant
environment, and many Filipinos are falling into extreme poverty. According to the Asian
Development Bank, the major causes of poverty include: low economic growth, a weak
agricultural sector, increased population rates and a high volume of inequality. Because of these
factors, there are a lot of effects of poverty in the Philippines that make it difficult for people to
live in such circumstances. Thus, poverty is one of the implications of having a weak economy.
Poverty is being alleviated by numerous policies or programs made by the government to assure
the poor people of their essential needs and that they are seen, or just to justify that the government
is doing something for them. In this study, the antipoverty policies that will be discussed are the
Republic Act No. 8425 or the "Social Reform and Poverty Alleviation Act." of 1997; in addition
to that are some of the antipoverty policies programs under the Department of Social Welfare and
Development namely, Pantawid Pamilyang Pilipino Program, Listahanan (National Household
Targeting System for Poverty Reduction),
Undoubtedly, these policies have helped some Filipinos in need, nevertheless not all, since there
has been rising social inequality.
The objective of this study is to know the relationship between poverty and the economy of
the Philippines. According to the 2022 Index of Economic Freedom, The Philippines' economic
freedom score is 61.1, making its economy the 80th freest in the 2022 Index. The Philippines is
ranked 15th among 39 countries in the Asia–Pacific region, and its overall score is above the
regional and world averages. Thus, this is to measure whether the antipoverty policies are
compelling enough, if the government is doing enough, and if poverty slows down economic
growth or if it is the other way around. Macasero's rappler report states that the proportion of poor
Filipino people is about 27% of the 111 million Philippine population. This research will assess
the present state of government responses, initiatives, and accomplishments and help identify and
prioritize future intervention requirements.

CHAPTER 2
Body

The global financial crisis and the subsequent rise in food, fuel, and commodities costs in 2022
have brought the issues of poverty and inequality to the forefront in the Philippines. The high rate
of inequality across income categories, regions, and sectors; the high population growth rates; and
the perennial occurrence of disasters are all contributing factors to the moderate poverty drop. The
government has been dealing with persistently high rates of poverty and hunger. According to the
most recent official data from the Philippine Statistics Authority, more Filipinos are poorer now
than in 2018. (PSA). According to the PSA's Family Income and Expenditure Survey, 19.9 million
Filipinos live below the poverty line. This constitutes 18.1% of the population. There were 17,67
million poor Filipinos in 2018. Meanwhile, the number of "food insecure" people climbed by 1.01
million. Additionally, the PSA reported a 7.8 percent unemployment rate, equivalent to 3.71
million unemployed Filipinos. Poverty acts as a drag on economic progress. Therefore protracted
and widespread poverty may hinder a country's development. However, it is not the poor people's
fault that they are poor. The Philippines' unstable government shortcomings must also be
discussed. According to Asian Development Bank, the government has committed to achieving
the Millennium Development Goals (MDGs) through pro-poor sustained economic growth as
reflected in the Medium-Term Philippine Development Plan (MTPDP) 2004–2010. However,
efforts to meet the MDGs and reduce poverty and inequality are constrained by the weak
implementation of reforms, financing gaps and leakages, coordination failure, and governance
concerns. Following the 2022 Index of Economic Freedom, instances in the rule of law, regulatory
inefficiency, and open markets can indicate the poverty and social inequality the Philippines
faces. Courts are inefficient, prejudiced, corrupt, intimidating, and underfunded. Corruption and
cronyism are prevalent. Influential politicians, corporations, and wealthy families are not held
accountable. Being a business owner is challenging in areas with poor infrastructure, high energy
costs, little bandwidth, and inconsistent regulations. We often fail to account for minimum wage,
social security, bonuses, and overtime. In 2020, a total of 27% of expected farm payments would
come from the government, according to the OECD. In addition to that, The investment code
provides a level playing field for foreign investors. There are bans on investing in several
industries. The financial system, which banks dominate, is stable. Capital market under-
development. The significant causes of economic decline in the Philippines are weak governance,
low investment in basic infrastructure, political and macroeconomic instability, and the highly
unequal distribution of productive assets such as land (Balisacan et al, 2000). The Philippines has
been described as having one of the world's highest rates of poverty, but it may be possible that
poverty itself is constraining economic growth. The channels through which poverty may impact
on economic growth include investment capacity constraints and human capital constraints (lack
of education, health care, and nutrition) Nevertheless, There has been gradual progress in
alleviating poverty and uneven results in addressing human development issues, most notably in
education and health.

The policies and programs are as follows:

Republic Act No. 8425 or the "Social Reform and Poverty Alleviation Act."
The policy is to be implemented by a national Anti-Poverty Commission, and the People's
Development Trust Fund is to be used to fund micro-finance initiatives. Allows for creating an
SRA (Social Reform Agenda) to address social injustice. The distribution and management of
resources, as well as the ecological components of sustainable development, will all be addressed
in the SRA. As stated in the Official Gazette, RA 8425 is an act to define the powers and functions
of the national anti-poverty commission and create it to institute the social reform and poverty
alleviation program and other purposes.

Pantawid Pamilyang Pilipino Program

Pantawid Pamilya is a CCT program that offers cash grants to low-income families with
children under the age of 14 and pregnant women on the condition that they meet specific
requirements. By bolstering people's education and skills, it hopes to end the cycle of poverty that
plagues entire communities.
Listahanan - National House Targetting System for Poverty Reduction (NHTS-PR)
A data management program that pinpoints the locations of low-income families across the
country of the Philippines. Method for creating and establishing a database of socioeconomic
information about low-income households. For the purpose of guaranteeing that the poorest of the
poor receive aid from the various social protection organizations.
Sustainable Livelihood Program

Reference: https://livelihood.dswd.gov.ph/

Many programs are being implemented however it accounts only to few Filipino people and it is
uncertain if the help can reach the poorest of the poor. Poverty alleviation strategies and programs
are a fundamental component of welfare policies in both developed and developing countries (Seth
& Tutor, 2021). Poverty has gone down in the Philippines, but rising inequality has only been fixed
recently. Structures make inequality worse. Inequality is kept up by unequal opportunities, a lack
of access to college education and skills, unequal college returns, gendered social norms and
childcare, and regional differences. Unfair access to opportunities slows down progress. Even
though there have been improvements in getting people power, clean water, and going to school,
big differences still make it hard for human capital to grow. Human potential is wasted because
the economy doesn't use human capital well and people don't move from one generation to the
next. Even though education is available to most people, income has an effect on quality and
achievement. Poor kids are less likely to go to school and finish grade levels that are right for their
age. They are less likely to go to college, which limits their ability to make money and get ahead.
College is still expensive because only a small number of people have college degrees. Richer
households get a lot more out of postsecondary education than poor ones do because of school
quality, fields of study, and employment. COVID-19 turned back decades of progress in reducing
poverty and inequality. In 2020, the outbreak slowed down economic growth and made
unemployment worse. According to the foracast made done by The World Bank, Even with a lot
of help from the government, poverty is expected to rise to 18.1% by 2021. The economy is slowly
but steadily getting better. Loss of income over time has hurt families with low incomes. Food
prices going up and kids having to rely on unhealthy ways to cope, like eating less, could hurt their
health and nutrition. Because of the COVID-19 outbreak, people had to work in places that were
less productive. Paid work has gone down, but farming has grown. Young people and people with
less education have shown these tendencies, which shows that the economy isn't getting better for
everyone and that economic gaps are getting wider. The pandemic could hurt the growth of human
capital in the long run. Loss of knowledge and being out of work for a long time can hurt future
earnings. Changes at work could make jobs more like each other. Between 2016 and 2021, the
number of middle-skilled jobs went down, but the number of low-skilled and high-skilled jobs
went up. Because of COVID-19, changes in the workplace may make economic differences worse.
Employment and support for workers, access to and quality of education, inclusive rural
development, social protection, and unequal opportunities are all things that can help reduce
inequality.

CHAPTER 3
ANALYSIS

Poverty has not decreased as a result of economic expansion in recent years. Poverty
reduction has been sluggish despite the country's moderate economic progress in recent years. The
beneficial effect of growth on poverty reduction has been tempered by persistently high levels of
inequality. The country's development and the achievement of high levels of continuous growth
have become seriously hampered by the prevalence of chronic poverty. Therefore, it is in the
public's best interest to find a way to end poverty, as doing so will benefit not only the destitute
but all members of society. Despite a recent uptick in urban poverty, rural areas continue to be
where people live below the poverty line. The majority of the poor are still located in rural areas
and in the agriculture industry, primarily as farmers and fishers. However, there is a rise in the
number of low-income families in metropolitan areas, especially in the underground economy.
There is a substantial correlation between poverty and educational attainment. Overwhelmingly,
poor families are headed by those with a primary school education or less. A high-quality education
is seen as a critical factor in breaking the cycle of poverty. Typically, poor households consist of
six people or more. To effectively combat poverty, population control is essential. Shocks and
hazards still pose a threat to many Filipino households. Social protection is a crucial component
of any anti-poverty policy. Restrictions on governance and institutional frameworks persist. A
revamped government plan for reducing poverty should place significant emphasis on measures
to address such obstacles. Weak poverty program implementation capacity at the local government
level. Poverty alleviation efforts can be strengthened by strengthening local capacities to provide
essential social services and implement poverty-related activities. Inadequate focusing of anti-
poverty initiatives. This is due to problems with governance and the inaccuracy, incompleteness,
and delay of data on poverty, especially at the local level. Insufficient funds will prevent poverty-
fighting efforts from succeeding by 2015 and prevent the Millennium Development Goals from
being met. Budgets for the social sector and anti-poverty initiatives need to be protected and more
funds must be raised. Poverty alleviation requires strategies that work on multiple fronts. Since
there are many causes and factors contributing to poverty, addressing it requires input from many
different groups. Since convergence has proven to be effective, it should be implemented on a
larger scale.
There should be more investigation into the causes of and solutions to persistent poverty. There
are extremely few micro studies on chronic poverty and how the poor overcome poverty traps.
This type of research is vital for establishing more effective policies and initiatives.

CHAPTER 4
Recommendations

In order to effectively combat poverty as a community, we must improve the government's

policy and involve relevant stakeholders. The sensitivity to poverty and shocks calls for a
rethinking of the current poverty framework. A comprehensive plan for social security at the
national level is required. The framework and strategy should also prioritize population control
and aim to alleviate chronic poverty and its associated barriers to advancement. Enhancing
coordination, improving efficiency, and decreasing corruption in the institutions responsible for
coordinating poverty policy and implementing poverty programs; for instance, revising the
memorandum of agreement between the National Anti-Poverty Commission (NAPC) and the
National Economic and Development Authority (NEDA) to clarify the coordination roles of each
agency; incorporating the specific roles of agencies and key stakeholders at different levels of
interagency coordination. Taking into account local and regional factors (such as catastrophe and
conflict risks) while designing and implementing anti-poverty programs. Intraregional inequalities
should also be considered, with interventions aiming to ensure that all regions have the same level
of access to high-quality health care, education, and infrastructure (Balisacan 2003). Targeting,
program execution, monitoring, and evaluation can all be improved with better coordination
between government agencies and important players (e.g., nongovernment groups and
corporations) in targeted areas and communities. Addressing poverty, vulnerability, and inequality
by allocating cash from the budget and soliciting more money from civil society, religious
organizations, business, and bilateral and international agencies. Community-based monitoring
systems mandated by NEDA, NAPC, and the Department of the Interior and Local Government,
as well as the Department of Social Welfare and Development's National Household Targeting
System for Poverty Reduction, should be integrated with existing databases to create a more
effective local targeting system (DILG).

CHAPTER 5
CONCLUSION

Markets and government regulate the Philippines' economy. Filipinos fall into poverty in today's
stagnant economy. Due to its many ramifications, poverty in the Philippines is challenging. Poor
economies cause poverty. The global financial crisis and rising food, fuel, and commodity prices
in 2022 highlighted Philippine poverty and inequality. Poverty and starvation plague the
government. Poverty hinders growth due to Philippine government instability, insufficient reform
implementation, money shortages and leakages, and coordination failure. The Philippines'
economic decline is caused by weak governance, insufficient infrastructure investment, political
and macroeconomic instability, and unequal land distribution. The Philippines' poverty has
decreased, but inequality has been addressed recently. Structures worsen inequality. Inequity is
made worse by unequal opportunities, college education and skills, the return on college education,
gendered social norms and childcare, and regional differences. Inequality offsets growth's poverty-
reduction effects. Poverty slows national development.
Thus, reducing poverty benefits everyone. Population management reduces poverty. Antipoverty
programs demand social protection. A national poverty plan should prioritize local government
antipoverty programs, essential social services, and poverty-related activities that can alleviate
poverty locally. Poverty causes and solutions need more research. Fighting poverty requires more
assertive government policy and stakeholder involvement. Hence. Inequality may increase as
developing countries like the Philippines continue to grow their economies and lift millions of
people out of poverty. Also, taxes are not too high, and the freedom to trade is good. However, the
effectiveness of the legal system and the government's honesty are areas of concern.

References:
The Heritage Foundation, 2022 Index of Economic Freedom, 2022
https://www.heritage.org/index/country/philippines
Palatino, 2022, Making Sense of the Philippines’ Latest Poverty Statistics

https://thediplomat.com/2022/09/making-sense-of-the-philippines-latest-poverty-statistics/
Asian Development Bank, 2009, Poverty in the Philippines Causes, Constraints and
Opportunities
https://www.adb.org/sites/default/files/publication/27529/poverty-philippines-causes-
constraints-opportunities.pdf
McCall Robison, 2018, The Extreme Effects of Poverty in the Philippines
https://borgenproject.org/effects-of-poverty-in-the-philippines/
The World Bank, 2022, Overcoming Poverty and Inequality in the Philippines: Past, Present,
and Prospects for the Future
https://www.worldbank.org/en/country/philippines/publication/key-findings-overcoming-
poverty-and-inequality-in-ph-past-present-and-prospects-for-the-future

https://fo6.dswd.gov.ph/about-us/

Message to Professor:
 The last semester brought a lot of anxiety since it has not been long since we were in
blended learning to hybrid one. Meeting you is very inspiring although it hasn’t been easy and
there’s always a conflict in schedule. Despite that, I would say that I learned more than I have
expected, Political Economy obviously is hard for me but you taught us things more than that, you
have shown us some speck of the reality we are facing we’re about to face. You’re busy schedule,
achievements, errand and work is inspiring. Thank you so much for the life lessons, and for
calming us with PEP Talk every meet. Lastly, thank you for you have encouraged me to face my
anxiety.