Poverty rate cut to 16.6% by 2015

In three years, the Aquino government hopes to slash poverty incidence to 16.6 percent or half the 1991 poverty rate of 33.1 percent.

According to economic planning secretary Arsenio Balisacan, the government can hack this considering that growth is high and that prices are not going up fast.

To be poor means earning less than P16,841 a year which 26.5 percent of Filipinos fall under.

The government aim is to bring more Filipinos out of poverty, overcoming the “lost decade” -the regime of Macapagal-Arroyo when more Filipinos sank in poverty.

Based on the official poverty statistics by the National Statistical Coordination Board (NSCB), the proportion of poor Filipinos to total population was 28.4 percent in 2000, 24.9 percent in 2003, 26.4 percent in 2006, and 26.5 percent in 2009.

The government needs to reduce poverty rate by around two percentage points every year to meet the Millennium Development Goal of cutting the poverty figure into half by 2015.

The poverty incidence should be lowered to 16.6 percent by 2015, half the 33.1 percent poverty figure in 1991. The next family income and expenditure survey (FIES) will be released next year, which will cover the poverty incidence for 2012.

Down by 2 percentage points

Balisacan said that the target of lowering the poverty rate by two percentage points every year would be attainable.

He is confident that more Filipinos will be less poor this year based on a) substantial economic growth and 2) slow increase in prices.

From January to July 2012, headline inflation stood at 3.1 percent, well within the central bank’s target of 3 to 5 percent.

“Inflation is a very important determinant of poverty because it affects the purchasing power of the poor more than the rich,” Balisacan said.

The country’s gross domestic product growth rate meanwhile stood at 6.4 percent in the first quarter, even higher than the 5 to 6 percent forecast of the government for the full-year.

The second quarter GDP results will be released on August 30. The NEDA chief said that he is hopeful that the second quarter figure will be similar to the 6.4 percent growth recorded in the first three months of the year.

Balisacan said that the country’s average three-year growth rates in terms of gross domestic product (GDP) ranged between 3.5 to 4.7 percent.

“This is why we term this period of 2000 to 2009 as our ‘lost decade’ with respect to poverty reduction. We expect to break this pattern of jobless growth because the economy has been growing respectably over the last three years,” Balisacan said.

“We started with 7.6 percent for 2010 and 3.9 percent for 2011. We expect to have a respectable figure for 2012, hopefully within the upper range of our growth assumptions for the year,” he said.

7 to 8 percent growth needed

However, Balisacan said that the aspirational GDP target of 7 to 8 percent is needed to ensure that growth is more “inclusive” and will trickle down to the poorest of the poor.

Balisacan said that the Philippine economy’s long-term growth is only 4.5 percent a year, and there is a need to bring it to a higher level to reduce poverty.

“The countries around us have long been achieving it. We should not be any different” the NEDA chief said.

Balisacan said that “sustaining growth momentum is one part of the challenge; the other is to ensure that this is more inclusive and shared by all”.

Cash transfer

To remove more Filipinos from poverty, especially the youth, the Aquino administration has focused its efforts on the Pantawid Pamilyang Pilipino Program (4Ps) or conditional cash transfer (CCT) program.

The program was launched in 2007 and is administered by the Department of Social Welfare and Development. Cash grants are given to the poorest households to support their health and educational concerns.

Under the program, the families can qualify for a maximum monthly support of P1,400. P500 per month will be allocated for meeting health conditions, while P300 per child, per month, will be allocated for educational needs. A maximum of three children per family can avail of the cash transfer.

The families availing of the program must meet a number of conditions in order to receive the cash transfers. Pregnant women must receive pre-natal and post-natal care and parents must attend Family Development Sessions.

Children under five years old must also receive regular preventive health checkups and vaccinations, while children in elementary school must receive deworming treatment at least twice a year.

Children who are 6-14 years of age must be enrolled in school, and have an attendance rate of at least 85 percent.

Balisacan said that the issue of human capital development is addressed through the CCT, as more poor children are given the chance to go to school.

The NEDA chief said that as of April 25, the CCT has reached more than three million household beneficiaries.

“The social programs of the government, particularly the CCT, are not location blind. It is implemented in all corners of the country, so all the poor are targeted to be included by 2016,” Balisacan said.

According to the Department of Budget and Management, the CCT has a proposed budget of P44.3 billion in 2013, which will support the coverage of 3.8 million indigent households.

Poverty in cities and municipalities

While the CCT program is meant to assist Filipinos in the entire country in getting out of poverty, the NSCB said that Local Government Units must also do their share in reducing poverty in their respective municipalities and cities.

In his latest Statistically Speaking column, former NSCB secretary general Romulo Virola said that the overall change in the poverty situation of municipalities and cities in the country from 2003 to 2009 is “not something we can be happy about.”

“In fact, between 2006 and 2009, while the pace of progress in achieving our Millennium Development Goal to halve poverty by 2015 has remained at Medium, it went down from 0.65 in 2006 to 0.53 in 2009!’ Virola said.

“Is this the result of possibly our distorted priorities and aspirations, or of failure of governance? Whatever, it urgently calls for innovative ideas from our municipal and city mayors,” Virola said.

According to the NSCB data, between 2003 and 2009, there was no statistically significant change in the poverty situation of 994 or 61 percent of the total municipalities and cities.

“(Meanwhile,) there was a significant increase in the poverty incidence in 135 or 8 percent of the municipalities/cities; and there was a significant reduction in the poverty incidence of only 493 or 31 percent of the municipalities/cities,” Virola said.

Inclusive growth

Balisacan said that to make sure that growth is felt not only in the major cities or municipalities but also in the farthest provinces in the country, there is a need to boost infrastructure and investments to connect slow-growing areas to the fast-growing ones.

“Inclusiveness really means that we have to connect the country. I’m using connect in a broad sense, not just by providing transport, but in an institutional sense also,” Balisacan said.

“It’s clear to us that backward areas of the country would have to be connected to the fast growing areas, that’s why infrastructure is the key to linking to otherwise separately moving areas,” the NEDA chief said.

Balisacan added that investments, especially in agriculture, would have to be focused on “efficiency.”

“You could increase for example the productivity in agriculture and remote areas, and that would allow people to benefit from growth,” he said.

Social protection programs, aside from the CCT, will also be location blind, Balisacan said. He cited universal health delivery and services through Philhealth as an example of a program which will be delivered to all parts of the country.

“That’s one way of making growth inclusive. Those who are left behind are able to benefit from the expansion of income through improved social services… and will have better opportunities to participate in subsequent growth processes,” Balisacan said.

Boosting infrastructure

Balisacan said that lack of infrastructure is one of the bottlenecks to reducing the country’s poverty rate.

The NEDA chief said that the lack of infrastructure, especially transport-related, raises the cost of doing business.

“The government is working hard to address that,” he said.

“We need to address infrastructure problems of all kinds, human resource development, and improve the quality of our institutions. If we improve those areas substantially, that will change the landscape of this country,” he said.

Over the near-term the NEDA Chief said that growth will be supported by major infrastructure projects identified by the public private partnership (PPP) Center.

These projects are intended to improve transportation, connectivity, boost agriculture productivity, increase water service areas, and raise the quality of education and health, Balisacan said. –ANGELA CELIS, Malaya