With respectable economic growth and benign inflation in the past three years, the National Economic and Development Authority (Neda) said on Wednesday that it was expecting a reduction in poverty incidence in 2012.
Neda Director General Arsenio M. Balisacan cited before reporters the Philippine economy’s “respectable” growths in 2010 of 7.6 percent and 2011 growth of 3.9 percent. He said the 5-percent to 6-percent growth target for 2012 could be achieved.
According to Balisacan, inflation had been within the 3-percent to 5-percent expectation of the Bangko Sentral ng Pilipinas (BSP) in the past two years. In 2010 full-year inflation was 3.8 percent, while in 2011 it was 4.8 percent. Inflation this year since January has been benign at 3 percent.
“I would be surprised if we don’t see poverty reduction [this year]. Two things, because of the growth and No. 2, the inflation within this period has been very much tamed. And, as you know, inflation is a very important determinant of poverty because it affects the purchasing power of the poor more than the rich,” the Neda chief said.
With these favorable economic indicators, he added, the Philippines may have already broken the pattern of poverty reduction in the last decade. Balisacan called the last 10 years a “lost decade” for the country in terms of reducing poverty. Poverty incidence during the period, he said, was not dented despite high economic growth. Since 2003, poverty incidence has been going up from 24.9 percent to 26.4 percent in 2006 to 26.5 percent in 2009.
Poverty-incidence data are released by the National Statistical Coordination Board (NSCB) every three years since they are based on the Family Income Expenditure Survey (FIES), which is conducted by the National Statistics Office (NSO) also every three years.
“There is an ongoing survey now, the FIES, that survey will cover 2012. By next year, we should be able to see [nothing happened] between 2009 and 2012. You know what happened in the last decade, [nothing really happened in curbing poverty], it was flat. The question that would be interesting to ask is if that pattern has remained the same. Of course, you expect that we have broken that pattern because of [respectable] growth and [low] inflation,” Balisacan said.
This year, he added, he expects economic growth to be within the government’s 5-percent to 6-percent growth target. The Neda chief said this target has incorporated impact of the crisis in Europe and any slowdown in China. He added that the only threat to this forecast is any sharp reduction in China’s economic growth. According to him, gross domestic product (GDP) growth in the emerging superpower has been also respectable at 8 percent. GDP is the total value of goods and services produced in a country in a year.
Balisacan said GDP growth in China would only see a sharp reduction if the crisis in Europe deepens and spreads to affect Asia significantly. This scenario, he added, is what some analysts fear.
“As of now, even the last number that came out of China is very respectable, 8 percent…And that’s good for us because we [like China] continue to have a quite robust [growth] rate,” Balisacan said.
The NSCB previously said that the country needs to bring down poverty incidence to 16.6 percent for it achieve the Millennium Development Goal (MDG) of halving poverty incidence by 2015.
If the country succeeded in reducing poverty incidence by 2 percentage points every year, poverty incidence in 2011 would be 24.5 percent; 2012, 22.5 percent; 2013, 20.5 percent; 2014, 18.5 percent; and 2015, 16.5 percent.
With the 26.5-percent poverty incidence at present, the country is eight years behind in achieving the MDG of halving the poverty incidence by 2015. –Cai U. Ordinario / Reporter, Businessmirror
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