In era of stellar growth, PHL poverty rate is unchanged over six years

(Updated 2:35 p.m.) The Philippines appears to be proof that economic growth alone cannot reduce poverty.

Despite stellar growth rates that have bested its Asian neighbors, the Philippines has not significantly lessened poverty in the last six years. If anything, the expansion of the country’s wealth has worsened income inequality.

The proportion of poor Filipinos is at 19.7 percent in the full-year of 2012, according to the
results of the 2012 Second Semester Poverty Statistics survey.

National Statistical Coordination Board (NSCB) Secretary General Jose Ramon Albert told reporters at a briefing Monday that the 19.7 percent translated to an estimated 4.2 million poor families, or one out of five families.

A poor family is defined in this context as earning less than the P7,890 a month needed to meet basic food and non-food needs.

The latest poverty statistics are a tiny improvement from the 20.5 percent poverty rate in 2009 and 21 percent in 2006.

“There was no significant reduction in the poverty rate in the country,” Albert concluded.

Growth and poverty

“Poverty reduction is affected by growth and making incomes more equal. You grew so fast, but the income inequality has increased,” said University of the Philippines economist Solita Collas-Monsod, who is also former Socioeconomic Planning Secretary.

Despite the sobering revelation amid the growth hype, the government maintains that it is on its way to reducing the poverty rate to 15 percent by 2015, one of its commitments under the Millennium Development Goals (MDG).
But Sonny Africa, executive director of research group IBON Foundation Inc., asserts that the lack of improvement in poverty levels dates back long before the Aquino administration.

“The poverty incidence hasn’t been changing since 1997,” he said, referring to a larger data set tracked by IBON.

The Philippine economy grew by 7.4 percent in the first three quarters of the year, with economic managers confident of at least a 6.8 percent rise for the whole of 2012. That has made the Philippines the darling of the World Bank and other international finance institutions.

But critics have pointed out the Philippines’ jobless growth paradox.

National Economic and Development Authority (NEDA) Assistant Director General Rosemarie Edillon said at the same briefing the work at hand remains unfinished.

“We will take it as an indication of work in progress. In some regions, the impact of growth in poverty is more significant,” she said.

To significantly curb poverty incidence is to rebuild Filipino industries and develop agriculture, said Africa. “We need a more radical change in economic policy,” he noted.

10 yrs. of above 6% growth needed

Under the government’s six-year development plan to 2016, poverty eradication would be achieved by growing the economy at an average 7 to 8 percent, and addressing vulnerability to natural disasters.

“The government is doing something as far as what I can see… It’s a difficult problem,” said Monsod.

Edillon estimated it will take nearly a decade of economic growth above 6 percent to halve the poverty incidence, adding that the government’s conditional cash transfer (CCT) program is taken as an aid to poverty reduction.

“The government is doing something about it. We’re talking medium-term before you can see some changes,” she added. – Siegfrid O. Alegado/VS/HS, GMA News