Philippine poverty did not improve despite strong economic growth

The poverty situation in the Philippines did not significantly improve despite of the six-percent economic growth posted from 2003 to 2006, according to the Philippine Institute for Development Studies (PIDS).
PIDS Supervising Research Specialist Danileen Parel noted that the education and infrastructure services in an area are both closely associated with its poverty situation.
Parel said poverty is highly concentrated in rural areas where level and quality of education and infrastructure are very poor.
Her findings showed that about 80 percent of the poor live in rural areas. Meanwhile, the National Capital Region (NCR) has the least number of poor households, which is 0.88 percent in 2003 and 1.18 percent in 2006.
The study also showed that access to electricity among poor households is only 52.73 percent in 2006, while access to potable piped water is 66.37 percent in the same year. It is miniscule compared to 80 percent of the nonpoor households who have access to electricity and piped water.
Parel also described the linkage of poverty and education. Fifty percent of the heads of poor household have no formal education, while almost 40 percent of them finished primary education. Only less than 0.5 percent of the poor have earned a bachelor’s degree.
Showing the linkage of poverty to lack of infrastructure services and basic education, Parel stressed that poor communities, especially in rural areas, must be provided with basic education and infrastructure services so that poverty reduction could be better achieved.
Rural-urban linkages should be strengthened to narrow the large gap between the rural and urban areas. Such linkages would enable rural households to take advantage of urban development like higher access to public goods, and more accessibility to human and physical capital and infrastructure, said Parel.
Parel also suggested more investments in areas where poverty is high. It can be through improving infrastructure services and providing basic education to poor communities.

Sustained economic growth to reduce poverty incidence

The National Economic and Development Authority (NEDA) has underscored the need for a sustained high economic growth to further improve the lives of the poor.
Poverty incidence slightly declined in 2012 to 25.2 percent of the population from 26.3% percent and to 19.7 % from 20.5 percent among families in 2009.
Socio-economic Planning Sec. Arsenio Balisacan said: “This is still a slow decline, but we will take it as an indication of accomplishment or a work in progress in the fight against poverty.”
“The growth impact on the poor can be enhanced by deliberate programs and policies to enable the poor to participate in the growth process. The government has been implementing programs and projects like the Pantawid Pamilya Program, the community-based employment program, and the sustainable livelihood program to empower the most vulnerable sectors of our society,” said Balisacan.
Another strategy is to consider regional and provincial disparities in poverty across the country and the need to have more focused strategies based on geographical and spatial considerations.
“Deliberate strategies to promote growth outside NCR, through infrastructure development and investment in human capital provide a pathway towards equalizing development opportunities,” said Balisacan.
“For provinces with high magnitude of poverty but low poverty incidence, it is important to promote higher growth to create more employment opportunities and to improve human capital and introduce flexible work arrangements for the poor.”
Balisacan said that for areas with low magnitude of poverty but high poverty incidence, interventions in these areas should focus on providing social assistance programs that promote economic and physical mobility, while economic opportunities are being created.
“The logistics and distribution system also need to be improved in order to reduce the pressure on food prices.”
Balisacan also stressed the need for an urgent and deliberate focus on disaster risk reduction and mitigation coupled with social insurance protection and income diversification.
The impact of natural disasters on poverty has the power to negate gains in economic growth and development, he said.
From 2010 to 2012, there were eight typhoons that have brought tremendous damages and losses in terms infrastructure and economic activity, Balisacan added.
The National Statistical Coordination Board (NSCB) reported that 13 out of 17 regions across the country experienced a reduction in poverty incidence in 2012 compared to 2009.
The brightest spot is the region of CARAGA, dropping a remarkable 14.2 percentage points in poverty incidence among families.
“This marked improvement reflects the impact on poverty of CARAGA’s robust growth of 10.6 percent in 2012, the second fastest gross regional domestic product growth among all regions, coming from an 8.5 percent growth in 2011,” said Balisacan.
“The increase in poverty incidence in the four regions – SOCCSKSARGEN (XII), the Autonomous Region of Muslim Mindanao (ARMM), Eastern Visayas (VIII) and NCR could be explained by the weak economic growth in these regions and/or the occurrence of major calamities.”
Poverty incidence in the ARMM increased by 6.3 percentage points than the figure in 2009. This could be partly explained by the weak growth in the region’s output.
ARMM’s economy contracted by 0.3 percent in 2011 and grew by a meager 1.2 percent in 2012. Added to this is the high food inflation, averaging 7.1 percent over the 3-year period in the region.