Poverty in the Philippines

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Share of population in extreme poverty (1981-2019) Poverty in the Philippines.jpg
Share of population in extreme poverty (1981–2019)

In 2023, official government statistics reported that the Philippines had a poverty rate of 15.5%, [1] [2] (or roughly 17.54 million Filipinos), significantly lower than the 49.2 percent recorded in 1985 through years of government poverty reduction efforts. [3] From 2018 to 2021, an estimated 2.3 million Filipinos fell into poverty amid the economic recession caused by the COVID-19 pandemic. [4] [5]

Contents

In 2018, the rate of decline of poverty has been slower compared with other East and Southeast Asian countries, [6] 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. [7] In 2022, the poverty situation in the Philippines has seen a steady ease. [8]

Some of the many causes of poverty are bad governance, corruption, a political system dominated by political dynasties, vulnerability to environmental disasters, and the lack of available jobs.

Definition

As of 2022, the Philippine Statistics Authority has set the poverty threshold at PHP12,030 per month for a family of five, or PHP79 per day per person to spend on food and non-food requirements. [5] [9]

Background

As of 2021, about 19.99 million Filipinos lived in poverty. [5] 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. [10] [ unreliable source? ]

Demographics

People living in poverty in the Philippines are most likely self-employed farmers, fisherfolk, 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 than 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. [11] Specifically in poor households, however, over 60 percent of families have education only up to elementary school. [12]

As of 2022, the Bangsamoro Autonomous Region in Muslim Mindanao has the highest incidence of poverty in the country at 37.2% while Metro Manila has the lowest at 3.5%. [13] [14]

Children in the Philippines are particularly vulnerable to the effects of poverty and suffer high rates of mortality for those below 5 years old. [15] The UNICEF and World Bank reported that as of 2022, more than 32 million children were living in poverty in the Philippines, including 5 million children living in extreme poverty. [16]

Over 10 million women live in poverty in the Philippines. [17]

A 2024 survey conducted by the Social Weather Stations from September 14 to 23, 2024 estimated 16.3 million Filipino families considered themselves poor compared to 12.9 million in March 2024. Self-rated poverty were highest in Mindanao (67 percent), followed by Visayas (62 percent), and Luzon (55 percent, excluding Metro Manila). Metro Manila was the lowest of self-rated poverty at 52 percent. [18]

Hunger

The Philippines ranked 69th out of 121 countries in the Global Hunger Index of 2022, with the level of hunger described as "moderate". [19] According to a 2018 study by the United Nations World Food Programme, while nearly all households in the Philippines can afford a diet that provides enough energy, only one third of the overall population can afford a diet that provides sufficient nutrients. [20] Around 2.9 million Filipino families experienced hunger in the third quarter of 2022, according to a survey by the Social Weather Stations. [21]

Homelessness

Out of the country's population of about 106 million, an estimated 4.5 million were homeless according to the Philippine Statistics Authority; of these, 3 million were in the capital Manila. [22] [23]

Causes of poverty

Poverty in the Philippines has been linked to bad governance, corruption, and a political system dominated by political dynasties. [24] [25] The country's poorest provinces are ruled by political dynasties. [26] [27] Additionally, there are the problem of extractive institutions that hinder the country's economic growth. [28]

Poverty in the Philippines also had its roots from land inequality resulting from land policies under colonization by Spain and the United States. [29]

The Philippines, after its independence in 1946, historically pursued an import substitution industrial policy, penalizing primary and agricultural sectors through tariffs and overvaluing the peso. These policies between the 1950s and 1980s diverted resources from agriculture and favored manufacturing. Price controls, import restrictions, and government interventions in sectors like rice, coconut, and fertilizer further depressed agricultural incomes. [30]

The overvalued peso, tariffs, and government regulation negatively impacted agricultural investment and productivity. The coconut sector, once the country's most important agricultural industry, experienced stagnant productivity between 1982-85 and 1962-66. Low agricultural productivity continues to hinder overall economic growth, partly due to maintained tariffs and slower growth in the agriculture, fishing, and forestry sectors compared to other sectors. [30]

Natural disasters have exacerbated poverty in the Philippines. [31] Natural disasters in the Philippines have caused US$23 billion in damages since 1990, which continues to delay the development process. [12] The frequent occurrences of typhoons 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. [32]

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. However, the government has plans focused on reducing poverty with objectives of improving the lives of the poorest segments of the population. [33]

The pattern of poverty 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. [34]

Joblessness and low pay

According to IBON Foundation, self-rated poverty rises due to the lack of good job opportunities, low wages, and high cost of living exacerbated by inflation. [35]

Despite fast increases on employment opportunities beginning in the 1990s, unemployment rate remains high in the Philippines due to overpopulation and the increased participation in the labor force. [36]

The majority of the working poor in the Philippines are informal or non-wage workers who are not protected by the Philippine Government's minimum wage policy. Only about half of the working poor are wage workers. In 2015, over 90 percent of low-paid workers are employed informally, making them ineligible for minimum wage protection. Consequently, less than 2 percent of the working poor benefit from the minimum wage policy, highlighting its limited effectiveness in addressing in-work poverty. [37]

Culture of poverty

According to a 1973 study of Sylvia H. Guerrero in Metro Manila, the "culture of poverty" in the Philippines is characterized by a lack of aspirations, reliance on chance, and disillusionment with the social, economic, and political conditions. [38]

Another factor that contributes to these bleak situations were corruption, unresolved legal cases, and high crime rates. Filipinos' patience, tolerance for frustration, and religiosity allow a culture of poverty to persist in Philippine society. [39]

Poverty during the COVID-19 pandemic

From 2018 to 2021, amid the economic recession caused by the COVID-19 pandemic, an estimated 2.3 million Filipinos fell into poverty; [40] this has been attributed in part to lockdowns enacted to control the spread of the disease [41] [40] [4] and possibly exacerbated by poor governance. [13] Poverty in the Philippines is a complex issue influenced by various factors, including economic inequality, corruption, and inadequate access to education. The disparity in income across different regions and sectors creates significant barriers for many Filipinos, limiting their opportunities for upward mobility. Additionally, the lack of effective government support systems exacerb ates the situation, as many impoverished communities struggle to access basic necessities such as healthcare, clean water, and quality education. The rapid population growth further complicates these challenges, putting additional strain on already limited resources and hindering efforts to improve living conditions.

Moreover, the impact of the COVID-19 pandemic has intensified poverty levels, with many families facing unemployment and food insecurity. The economic downturn has disproportionately affected the poorest households, making it difficult for them to recover even as the economy begins to stabilize. Structural issues, such as unequal access to education and job opportunities, particularly for women and marginalized groups, continue to perpetuate the cycle of poverty, making it essential for comprehensive and inclusive strategies to address these root causes effectively.

Comparison to other Southeast Asian countries

According to data provided by the World Bank, economic growth in the Philippines competes sufficiently with the GDP per capita percent growth of neighboring countries; the Philippine GDP per capita in 2021 was $3,548.8 compared to 3,694.0 in Vietnam, and 4,291.8 in Indonesia. [42] 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 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. [12]

The Economist in 2017 stated that the Philippines' poverty reduction has lagged far behind China, Vietnam, and Thailand. Growth is also concentrated in Manila while other provinces in the country are neglected and hardly progress. [43]

Poverty reduction

Poverty rate declines

According to the World Bank, poverty rates declined from 26.6 percent in 2006 to 21.6 percent in 2015. [44] The country has attempted to increase income and opportunities and reverse impacts of occurring natural disasters. The Philippine Development Plan of 2017–2022 [45] and the AmBisyon Natin 2040 are proposals for the nation to decrease poverty and improve the lives of the poorest population. [46] 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. [12]

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. The majority of farm workers and fishers have remained poor, according to the Philippine Statistics Authority. [47]

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. [12] In addition, drivers of reduction also include the influx of economic expansion that has grown the economy. [48]

Programs for the economic welfare of children and women will be subject to significant budget cuts under the Philippines government's proposed budget for 2024. [16]

See also

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References

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