Over 214,000 Metro Manilans emerge from poverty in 2018

By Lourdes O. Pilar, Philstar, 21 Jun 2020

MORE THAN 200,000 Filipinos in Metro Manila made it past the poverty threshold in 2018, according to new data derived from poverty incidence estimates by the Philippine Statistics Authority (PSA).

In a news conference, the PSA’s National Capital Region (NCR) office announced further findings from the government’s poverty survey released in December, showing that around 214,200 Metro Manila residents exited the category of people classified as poor, as estimated from the decline in the poverty incidence rate to 2.3% from 4.1% in 2015.

Poverty incidence measures the proportion of those whose incomes fall below the poverty threshold.

The incidence rates suggest that in 2018, around 308,600 Filipinos in Metro Manila did not earn enough to buy basic needs, compared to 522,800 Filipinos in 2015.

Poverty incidence among Filipino families, or the proportion of those whose incomes fell below the poverty threshold, fell to 1.5% from 2.8% three years earlier. In 2018, this corresponded to around 48,400 Filipino families that remained poor, from 86,100 previously.

The subsistence incidence — or the proportion of those whose incomes fell below the monthly food threshold — fell to 0.4% in 2018 from 0.7% in 2015.

The subsistence incidence among families — or the proportion of those in extreme poverty — fell to 0.2% from 0.4%.

The food threshold is defined as the minimum income required to meet basic food needs and satisfy the nutritional requirements “for economically necessary and socially desirable physical activities.”

The poverty threshold is defined as the minimum income needed to meet basic food and non-food requirements.

The poverty threshold for a family of five in 2018 was P11,951 per month in Metro Manila, as compared to P10,495 per month in 2015.

Meanwhile, the monthly food threshold per family was P8,345 against P7,329 in 2015.

In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said economic growth was the “number one reason” for the decline in Metro Manila’s poverty incidence.

“Increasing incomes and more job opportunities have contributed to this decline in poverty incidence,” he said.

Mr. Asuncion noted that further poverty reduction in Metro Manila can be achieved if economic growth can average “higher than 6% or even 7% by 2021.”

“However, this should also be approached with caution regarding the quality of poverty reduction. Economic growth should be shared by as many as possible,” he said.

In a separate e-mail, Security Bank Corp. Chief Economist Robert Dan J. Roces cited “higher wage and salary incomes” due to better employment opportunities as the top contributor in reducing the NCR’s poverty incidence, as well as the “initial effects of tax reforms” that may have led to an increase in take-home pay.

Mr. Roces however noted that Metro Manila exhibits low growth elasticity in poverty reduction — meaning that the percentage reduction in poverty rates associated with changes in mean income do not closely align — with the region still suffering from “systemic difficulties” in alleviating poverty.

“[T]he poor and those in the threshold will be the first to suffer during high inflation periods, for instance… and absent financial inclusion and financial literacy, plus lack of social safety nets, income inequality might remain and the level of the poverty threshold will be a concern,” Mr. Roces said.