Poverty in the Philippines
This article's factual accuracy may be compromised due to out-of-date information. (November 2019)
The beginning of 2019, economic growth slowed due to lack of public spending and an overall weaker economy, caused by the deceleration in investment growth. According to data from the World Bank, the Poverty rate decreased from 21.6% in 2015 to 16.6% in 2018, and is expected to decline further in the following years. This shows that even though the economy has recently slowed, the Philippines is still making progress in poverty reduction.
The rate of declination in poverty has been slower, compared with other East Asian Countries, such as People's Republic of China (PRC), Thailand, Indonesia, or Vietnam. National Economic and Development Authority (NEDA) deputy director general Rosemarie Edillon attributed this to a generally low and stable inflation, improved incomes and higher employment rates during the period.[needs update]
The government planned to eradicate poverty as stated in the Philippines Development Plan 2011–2016 (PDP). The PDP for those six years are an annual economic growth of 7–8% and the achievement of the Millennium Development Goals (MDGs). Under the MDGs, Philippines committed itself to halving extreme poverty from a level of 33.1% in 1991 to 16.6% by 2015.
As of 2018[update], a quarter of the 105 million Philippine population lived in poverty, that is, over 26 million people. Through various anti-poverty programs, such as the Comprehensive Agrarian Reform, Lingap Para sa Mahirap, and the Social Reform Agenda, the Philippines has been through a long battle to ameliorate that statistic. Despite these governmental efforts, the Millennium Development Goal milestone of reduction in poverty has been a slow process. The poor in the Philippines are most likely self-employed farmers, fishermen, or other agricultural workers. Three-quarters of these people live in severe disaster-risk areas that are highly rural. In 2015, about 58 percent of poor households have more that six members. Education overall has improved over time; from the ages of 15–24, over 75 percent have completed secondary education or above in 2015. Specifically in poor households, however, over 60 percent of families have education only up to elementary school. Of those who live in poverty, in 2012, 18.4 million people accounted for extreme poverty, living with about $1.25 per day. The challenges that such people face are vulnerability to natural disasters, weak governance, inadequate health services, lack of natural resources and more. The poor face an expensive process of recovering from vulnerability, just to face another conflict which then restarts the cycle.
Causes of Poverty
As of 2015, with one fifth of the population living below the poverty line the desire to reduce poverty was a priority.The poorest populations work in agriculture and live in areas prone to natural disasters compared to the wealthier population. There is an inadequate number of available good jobs, and a lack of investment in education that leads to such a high inequality of income. The nation of the Philippines does not have the infrastructure needed for systems of inclusive economic growth.
Poverty occurs for many reasons, but in the Philippines specifically, there are reoccurring factors that have slowed down the development progress. Economic growth is low compared to neighboring countries. GDP growth is comparable, however, GDP per capita in relation to the increase of population is much slower. Poverty directly impacts economic growth due to constraints in credit and the underdevelopment of the financial market and inequality in income and assets. Another cause of poverty in the Philippines is the rise of unmanaged population growth. Because the poor tend to have bigger families, they are unable to access health services or sex education, which leads to more children and the continuation of that cycle. The pattern of growth is common in rural areas, but there has been a rise in poverty in urban areas. Cities in the Philippines have been faced with an increase in poverty due to lack of well-paid employment. One of the main causes of poverty in the Philippines is the vulnerability to natural disasters. Natural disasters in the Philippines have caused US$23 billion in damages since 1990, which continues to delay the development process. According to the DW, the Philippines is the most vulnerable country to typhoons, earthquakes and volcanic eruptions in the world. The frequent occurrences cost the country lives, illness, malnutrition, and denial of education and health services. Filipino farmers are some of the most vulnerable, because floods and landslides severely affect their crops and income. Another cause of poverty is the lack of research on poverty and the effective policies to implement in order to prevent further damage. This lack of research has caused deficient targeting in poverty programs, and unsuccessful current processes. Until more research is done as to how exactly tackle the poverty trap, programs will not be effective.[failed verification]
Comparison to Other Southeast Asian Countries
According to data provided by the Asian Development Bank, economic growth in the Philippines competes sufficiently with the GDP per capita percent growth of neighboring countries. The GDP per capita percent growth of the Philippines is 4.8% compared to 5% in Laos People’s Democratic Republic, and 4.4% in Cambodia. In 2020, the GDP per capita growth rate of the Philippines is expected to grow to 6.2%. Declination of poverty is slower in the Philippines because urbanization and industrialization is progressing faster elsewhere. This advancement allows people to leave their agricultural-based work to a factory job with a higher paying income. The country has made movement out of the labor-intensive work in populous regions, such as Manila, however the country as a whole has made slower improvements. In addition to slow progress, natural disasters in the Philippines, like stated previously, is one of the biggest conductors of poverty. While other countries are able to develop without consistent disturbances, the Philippines is forced to start from the ground up after every single occurrence. The Economist, state that low growth of annual GDP is one of the main reasons for persistent poverty compared to Vietnam, China, and Thailand. Because the growth is concentrated in Manila, other provinces in the country are forgotten and hardly progress.
Poverty Rate Declines
According to the World Bank, poverty rates declined from 26.6 percent in 2006 to 21.6 percent in 2015. Although 1 in 5 of the Filipino population still live below the poverty line, the country has attempted to increase income and opportunities and reverse impacts of occurring natural disasters. The Philippine Development Plan of 2017–2022 and the AmBisyon 2040 are proposals for the nation to suppress poverty and improve the lives of the poorest population. These policies include creating more and better jobs, improving productivity, investing in health and nutrition, managing disaster risks, protecting the vulnerable, and more. These documents help set the overall goal of reducing poverty to 13–15 percent by 2022 and having the nation thrive at similar levels as surrounding countries. The strategic plans that the Philippine government has created are intended to work towards a middle-class society where poverty is reduced and living conditions are improved.
Drivers of Poverty Reduction
The main drivers between 2006 and 2015 were an increase in wage income and movement of employment out of agriculture, government transfers, and remittance from domestic and foreign sources according to the World Bank publication, Making Growth Work for the Poor. Movement from agricultural jobs to lower-end industry jobs led to increase of wages and accounted for 50 percent of the reduction in poverty. Due to the Pantawid Pamilya, the government was able to use the social assistance which resulted in the contribution of 25 percent reduction of poverty as well as influence behavior change. Remittances from domestic and foreign sources accounted for 12 percent of the reduction in poverty. In addition, a factor of the declination of poverty is the growth of population. With a 1.7 percent increase of population a year has resulted in a 3.8 percent increase in per capita GDP growth. An additional factor is an increase of school enrollment and decrease of dropout rates. Despite a lack of distribution, the water, sanitation and electricity of the Philippines have also improved. Other socioeconomic indicators such as social safety nets and health insurance has also been beneficial factors. In addition, drivers of reduction also include the influx of economic expansion that has grown the economy.
Poverty will decline with the continuation of three actions. First is enabling Filipinos to get jobs outside of agriculture and increase the income of farmers. Second, is using the Government's Pantawid Pamilyang Pilipino Program (4Ps), a primary social program, to reduce poverty to allow children access to education and health services. Lastly, the continuation of remittances from sources of domestic and foreign. There are current programs that have helped poverty rates decline. In 1981, Opportunity International began their operation through loans and savings in Manila. Through rural expansion, the bank wants to implement a program that will provide electricity to about 10,000 families. To contend to the natural disasters, Opportunity International also has provided insurance programs that help those who have been impacted in Typhoon Helen. With the help of social protection programs from the Government of the Philippines, there are cash assistances to families living in extreme poverty. Child immunizations, school enrollment, and health programs are some of the specific actions that the programs have assisted. Also USAID, or the U.S. Philippines Partnership for Growth specifically, have implemented regulations and policies to promote development within the country. USAID is also initiating programs that help those who were impacted by natural disasters and contributing to environmental resilient methods for the future.
This article's factual accuracy may be compromised due to out-of-date information. (August 2012)
The Annual Poverty Indicator Survey, or APIS, is a survey held nationwide, administered by the National Statistics Office, World Bank Mission, and the United Nations Development Programme. It provides data on the different non-income indicators related to poverty and is held every year except for years when the Family Income and Expenditure Survey, or FIES, is being administered. The survey provides data on the socio-economic profile and the living conditions of families in 78 provinces and all cities and municipalities of Metro Manila. The Family Income and Expenditure Survey, on the other hand, provides the same major and specified details of expenditures but over a larger sample area extending to provinces and municipalities across the Philippines.
Poverty and food threshold
The poverty threshold, also known as the poverty line, is the minimum income required to meet basic food needs and other non-food requirements such as clothing, housing, transportation, health, and education expenses. The food threshold is the minimum income required to meet basic food needs and satisfy the nutritional requirements set by the Food and Nutrition Research Institute (FNRI) to ensure that one remains economically and socially productive. Recent estimates for the poverty and food thresholds has been consistently increasing. The food threshold, being the estimate for minimum food expenditures, consistently comprises around 70% of the minimum income requirement or poverty threshold.
Poverty incidence and subsistence
Given the poverty thresholds mentioned above, poverty and subsistence incidences are computed by determining the proportion of the population and the families whose per capita income are below the poverty and food thresholds. Poverty incidence is the proportion of the population with per capita income less than the per capita poverty threshold. Subsistence incidence, on the other hand, is the proportion of the population with per capita income less than the per capita food threshold. Poverty and subsistence incidences for 2013 significantly decreased, indicating an improvement in the proportion of the population that are below the poverty line.
2014 data released by Philippine Statistics Authority, however, estimated a 25.8% poverty incidence for the first semester (January to June 2014). This was an increase in poverty level from 2013. Subsistence incidence for the first semester of 2014, on the other hand, showed an improvement, with a 10.5% estimate.
Depth of poverty
Income gap measures the average income required by the poor in order to get out of poverty (expressed relative to the poverty threshold). Income gap is a measure of depth of poverty. In 2013, on average, families below the poverty line needed 27.4% the poverty threshold, or an additional monthly income of Php 2,638, to get out of poverty. This was a slight decrease from 2012's income gap which requires an income of Php 2740 in order to overtake the poverty line.
Poverty gap is the total income shortfall (expressed relative to the poverty line) of families with income below the poverty threshold, divided by the total number of families. It is also a measure of depth of poverty. The poverty gap for the first semester of 2014 was 5.4%, a 0.2 unit increase from 2013, which was 5.2%.
The Gini index, also known as the Gini ratio or Gini coefficient, measures the degree of inequality in the distribution of family income in a country. A Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. For the Philippines, the Gini index is measured every three years during the Family Income and Expenditure Survey. In 2009, the Gini index was 46.41. It decreased 0.36 units to 46.05 in 2012. These indices were both higher than the average of 38.8.
Rapid population growth
In 1985, the absolute number of people living in poverty was 26.5 million. This increased to 30.4 million in 2000 and from 2006 to 2009, increased by almost 970,000 Filipinos from 22.2 million to 23.1 million.
As the Philippines has financially limited resources and a high poverty rate, the rapid increase in population has become a problem because there are insufficient resources to support the population, which leaves fewer resources to improve the economy. From 2003 to 2006, even though the Philippines experienced above-average economic growth, the poverty incidence increased as a result of its population growth rate.
Poverty reduction has not kept up with GDP growth rates, largely due to the high unemployment rate, high inflation rate and wide income inequality. The official rate of unemployment for 2012 in the Philippines was 6.5 percent.
Education and Literacy
There is a great contrast between the achievement of tertiary education by family heads belonging to the lowest 30% and the highest 70%. From the 3 to 24-year olds who attended school during the year 2010 to 2011, only 4% of those under the poverty line were in college, while 18% of the highest 70% were in college. From the data concerning 6 to 24-year olds from the lowest 30% who had not attended school during the year 2010 to 2011, the two highest reasons for not attending were "lack of personal interest" at 28.9% and "high cost of education" at 26.8%.
Human Development Index
The Human Development Index, as defined by the United Nations, is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living. For the Philippines, the HDI increased by 16.5% between 1980 and 2013. The country ranked 117 out of 187 countries in 2013. The HDI in 2013 was 0.660, which implied that the Philippines was under the medium human development group (which needs an HDI of 0.614). The nation's HDI was higher than the average for countries in the medium human development group, but lower than the average of the countries in East Asia and Pacific (0.703).
The Inequality Adjusted Human Development Index (IHDI) discounts each dimension's (health, education and income) average value according to its level of inequality. Inequality pulls down HDI by 18.1% in the Philippines, which makes the IHDI equal to 0.540. As in the HDI, the country's IHDI is higher than the average of medium human development group, which is 0.457, a 25.6% loss due to inequality. The IHDI value of the average in the countries of East Asia and Pacific was 0.564, which was still higher than the Philippines'.
Houses and lots
It can be seen that 50.2% of families from the lowest 30% have floor areas below 30 square meters. From the data concerning the type of construction material of the roof of the building families occupy, 87.4% of the highest 70% had strong materials compared with the 62.8% of the lowest 30% and 6.3% of the highest 70% had light materials compared with the 27.3% of the lowest 30%.
From the data concerning the type of construction material of the outer walls of the building families occupy, 78.3% of the highest 70% had strong materials compared with the 46.4% of the lowest 30% and 8.7% of the highest 70% had light materials compared with the 32.4% of the lowest 30%. From the data concerning the type of toilet facility families use, it was noticeable that 12.9% of the lowest 30% had no toilet, field, or bush.
The gap between the percentage of families below the poverty line and those above the poverty line is noticeable. 14.5% of families belonging to the lowest 30% had experienced hunger in the three months preceding the survey, while only 2.8% of families belonging to the highest 70% had experienced hunger in the three months preceding the survey.
Electricity and access to resources
Only 70.2% of families belonging to the lowest 30% have electricity in their homes, compared with the 94.5% of the families belonging to the highest 70%. It is also noticeable that 27.2% of families belonging to the lowest 30% have either a public tap, an unprotected well, or an undeveloped spring for their main source of water supply.
In 2012, a family of five would need an average of P5,513 per month in order to meet their basic food needs, and a further P2,377 in order to meet their nonfood needs. This represents an average inflation of 4.1% per year from 2009 to 2012.
Statistically, the percentage of Filipinos that couldn't meet the basic food needs stood at 7.5%. The number of poor families remained steady at 1.61 Million. One in five families were estimated to be poor in 2012, or 4.2 million.
Aside from previous indicators, other measures such as the income gap and poverty gap also exist in order to have enough data to properly design programs that will help poverty. The income gap measures the amount of income required by the poor in order to get out of poverty in relation to the poverty threshold. In 2012, it was estimated that the income gap was at 26.2%, which meant that, on average, a family of five would need an additional P2,067 in order to move out of poverty in 2012.
A total of P124 billion would be needed by the national government as cash transfers to the poor families in order to totally eradicate poverty in the country.
As of 2016, there were a total of 101.57 million Filipinos. 25.2% of the population lived below the national poverty line.
At the regional level, NCR, CALABARZON and Central Luzon had the lowest poverty incidence in the country during 2006, 2009, and 2012. ARMM remained the poorest region with the highest poverty incidence, which ranged from 40 to 49% in 2006, 2009, and 2012.
At the provincial level, the group of provinces with the least poverty incidence are the four districts of NCR, Bataan, Benguet, Bulacan, Cavite, Laguna, Pampanga, Rizal, and Ilocos Norte. The group with the highest poverty are Eastern Samar, Lanao del Sur, Maguindanao, Masbate, Northern Samar, Sarangani, Zamboanga del Norte, Camiguin, Lanao del Norte, North Cotabato, and Western Samar.
In general, one out of every five families were poor in 2012. The ratio of poor families remained the same from 2006, but due to population increase, the number rose from 3.8 million in 2006 to 4.2 million in 2012. Furthermore, one out of 10 families couldn't meet their basic food needs. Nevertheless, the estimated number of poor families remained steady at around 1.6 million.
The map above shows the poverty incidence in the country. This is the number of households living below the poverty threshold. It can be seen that the provinces of Apayao, Eastern Samar, Lanao del Sur, and Maguindanao have incidences higher than 60%. In Mindanao, apart from Lanao del Sur and Maguindanao, the rest of the region's provinces have indices that are 60% or lower. In Visayas, the western part contains most of the provinces with lower than 30% incidence, while the eastern part mostly has lower than 60% incidence. Luzon has the least number of provinces with higher than 30% incidence. This may be attributed to their relative ease of trade with the capital.
- Slums in Manila
- Income inequality in the Philippines
- List of Philippine provinces by Human Development Index
- Street children in the Philippines
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