With solid economic fundamentals, the Philippines is well-placed to speed up poverty reduction. The challenge is to provide more economic opportunities, which would help many more people earn higher and stable incomes.
These are among the key findings of the report titled Making Growth Work for the Poor: A Poverty Assessment for the Philippines released today by the World Bank.
From 2006 to 2015, the latest available data, the report says that robust economic growth helped the poverty rate in the Philippines to fall by 5 percentage points. Poverty declined from 26.6 percent in 2006 to 21.6 percent in 2015, due to factors like the expansion of jobs outside agriculture, government transfers, in particular to qualified poor Filipinos through the Pantawid Pamilyang Pilipino Program, and remittances.
“This experience gives us hope that the Philippines can overcome poverty,” said Mara K. Warwick, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand. “With a strong economy, the country is well-placed to end the vicious cycles of unequal opportunity that trap people in poverty, set in place measures to improve service delivery, and boost job opportunities.”
In 2015, some 22 million Filipinos—more than one-fifth of the population—still live below the national poverty line. Constraints to achieving faster poverty reduction, according to the report, include the less pro-poor pattern of growth; high inequality of income and opportunities; and the adverse impacts of natural disasters and conflict.
Most poor Filipinos have low levels of education and live in large households headed by individuals who are self-employed or work in agriculture as laborers or smallholder producers. The poorest households are those dependent on agriculture as their main source of income and most of them live in the countryside, in areas prone to disasters or in the conflict-affected areas of Mindanao.
“Making a difference in Mindanao makes a big difference to the Philippines. Increasing public investment in Mindanao to boost development there would expand opportunities for conflict-affected communities, broaden access to services and create more and better jobs,” said Xubei Luo, Senior Economist at the World Bank’s Poverty and Equity Global Practice.
Inequitable investment in human capital and insufficient well-paying job opportunities trap the poor in poverty across generations, the report explains. High concentrations of wealth constrain equal opportunities and access to services, which are necessary for inclusive growth. Natural disasters disproportionately and repeatedly batter the poorest regions of the country, miring them in higher levels of poverty.
The government has prepared strategic plans focused on reducing poverty, specifically AmBisyon 2040, a long-term vision to bring down poverty and improve the lives of the poorest segments of the population, and the Philippine Development Plan 2017–2022.
These plans target reducing poverty to 13 to 15 percent by 2022. To help achieve these targets, the Poverty Assessment recommends the following policy directions:
- Create more and better jobs;
- Improve productivity in all sectors, especially agriculture;
- Equip Filipinos with skills needed for the 21st century economy;
- Invest in health and nutrition;
- Focus poverty reduction efforts on Mindanao; and
- Manage disaster risks and protect the vulnerable.