Poverty incidence dropped to 26.3% in first half of 2015

MANILA, Philippines – Poverty incidence among Filipinos dropped to 26.3 percent in the first semester of 2015 – a record low in nine years – as income increases become more progressive, the National Economic and Development Authority (NEDA) said yesterday.

Poverty incidence in the first half of last year was lower than in 2012, which recorded 27.9 percent.

NEDA deputy director general Rosemarie Edillon said yesterday the figure is a record low across all family income and expenditure surveys since 2006.

Edillon said reduced poverty incidence rate is the result of increase in incomes among Filipinos in the past three years.

This means that incomes are rising faster than prices of goods, she said.

“We are seeing a steady decline in income inequality. Increases in income are becoming more progressive, as incomes of the bottom 30 percent of the population have been continuously rising faster than those in higher income classes,” she said during a briefing on poverty in Quezon City.

She noted that the growth of nominal per capita income accelerated from 12.8 percent in the years 2009 to 2012 to 15.3 percent in the years 2012 to 2015.

Inflation also decreased from 12.1 percent in 2009 to 2012 to 9.5 percent in 2012 to 2015, Edillon noted.

The deceleration of the poverty incidence rate could have been faster between 2006 to 2015 had it not been for the occurrence of natural and man-made disasters such as Typhoon Yolanda and the destructive earthquake in Bohol as well as the Zamboanga siege in 2013.

Meanwhile, the number of Filipinos living in extreme poverty, as measured by subsistence incidence, has fallen from 13.4 to 12.1 percent in the first semester of 2012.

Subsistence incidence means an individual does not have sufficient income to meet basic food requirements.

In the first semester of 2015, a family of five needed at least P6,365 on the average every month to meet the family’s basic food needs and at least P9,140 per month to meet both basic food and non-food needs.

Edillon noted that there have been improvements in income distribution. Per capita income of the bottom 30 percent of households grew faster.

“These numbers send a strong signal that our efforts in the past years to foster inclusive growth and good governance have translated to actual and tangible improvements in the lives of our people,” she said.

Well-targeted social protection programs such as the Pantawid Pamilyang Pilipino Program, she said, helped poor households recover from various economic shocks.

“At the same time, we know that the conditions imposed on the 4Ps beneficiaries will make for a more robust poverty reduction in the future,” said Edillon.

As family incomes tend to be higher in the second semester than the first semester of 2015, NEDA expects the full 2015 poverty incidence among Filipinos to be lower than the first semester figure.

NEDA’s full-year estimate is between 23.6 percent and 23.8 percent, close to the high-end target of 20 to 23 percent for 2015.

“A lot more needs to be done and we cannot be contented with these achievements. Despite improved numbers, the decline in poverty could have been more. The increase in income was still not enough to offset the increase in food prices, particularly those that are being consumed more by the poor,” said Edillon.

She was referring to the price of rice that declined in 2015 from 2014 levels but has nonetheless remained high.

NEDA also noted that there are still disparities in personal income across the country that contribute to poverty incidences.

Metro Manila, for instance, posted the lowest poverty incidence among the regions because of robust economic activity and increased opportunities for gaining employment. This creates a spillover to adjacent areas like Central Luzon and Cavite, Laguna, Batangas and Quezon.

Poverty incidence is highest in Mindanao, particularly in the Autonomous Region in Muslim Mindanao, because of recurring armed conflict and natural disasters.

This is aggravated by the region’s dependence on agriculture, an under-performing economic sector.

Edillon said incomes can be boosted among the poor by improving the business climate, building the competitiveness of productive sectors and improving access to financing. –Czeriza Valencia (The Philippine Star)