RP gains said to translate to rise in number of poor people

35% NOW LIVE BELOW POVERTY LINE

MORE people slipped below the poverty line this year, making it almost impossible for the country to attain the Millennium Development Goal of reducing poverty by half by 2015, economists claimed.

“Rough estimates would show that the number of poor Filipinos likely increased to 35 percent this year,” said Cielito Habito, economics professor at the Ateneo de Manila University and former head of the National Economic and Development Authority.

In 2009, the country’s population is estimated to reach 92.2 million. At 35 percent, the number of poor people in the country may be set at around 32.27 million.

In comparison, the population of the country in 2006 was estimated at 89 million, of which 33 percent, or around 29.37 million, were living below the poverty line at that time.

Habito made the statement at the sidelines of the 47th annual meeting of the Philippine Economic Society held Friday at the Bangko Sentral ng Pilipinas.

Under the Millennium Development Goal of the United Nations, member-countries pledged to reduce poverty incidence by half by 2015.

Arsenio Balisacan, professor of economics at the University of the Philippines, said in a presentation during the event that the country would miss its poverty reduction goal because of failure of authorities to address long-standing problems of the economy.

“We have had modest economic growth in recent years but it did not prevent poverty from rising. Things have really gone worse in the last six to seven years,” Balisacan said.

The UP professor said the next administration should focus on achieving an “inclusive growth,” which means an economic expansion that will reduce poverty.

Habito said in a study he wrote that poverty elasticity of growth in Asia is at -2 percent, better than the -1.6 percent global average.

In contrast, the poverty elasticity of growth in the Philippines alone is around +0.3, Habito added.

Poverty elasticity of growth is the measure of how much poverty is negatively correlated with economic growth. The -2 average for Asia means that, for every one percentage point average increase in Asian economies, there is a 2-percent reduction in the number of poor people.

On the other hand, the +0.3 percent for the Philippines indicates that a one-percentage-point increase in economic growth in the country may be accompanied by a 0.3-percent increase in the number of poor Filipinos.

Habito said economic growth in the Philippines was not trickling down to poor people because economic growth is mostly centered in the National Capital Region. He said Metro Manila and nearby provinces accounted for 65 percent of the country’s gross domestic product. –Michelle Remo, Philippine Daily Inquirer