Global crisis caused 1.5% spike in poverty rate, says World Bank

THE poverty incidence in the Philippines has risen over the past two years following the global economic crisis and a series of devastating storms last year, according to a joint report by the World Bank and the International Monetary Fund released Friday.

“The food and fuel price shocks in 2008, the global economic crisis, and a recent typhoon have sharply increased poverty in the Philippines,” says the Global Monitoring Report 2010: The Millennium Development Goals after the Crisis.

The report does not provide specific poverty figures, but the World Bank’s country office had earlier estimated that 1.4 million more Filipinos had joined the ranks of the poor by 2010, increasing the poverty rate by 1.5 percentage points.

The economic crisis undermined GDP growth in the Philippines by over 3 percent in 2009, the report says.

Still, the report notes the government’s policy response to ease the poverty problem, including its doles to the poorest of the poor. The government had announced plans to expand its anti-poverty program by the end of 2009 to help as many as a million households.

The report says the poor households in Cambodia and the Philippines reported cutting overall consumption, in response to income shocks, to protect their children’s school attendance.

It says the primary education completion rate in the Philippines is in the range of 85 to 94 percent, lower than the 95 percent rate or higher recorded in neighboring countries such as Indonesia, Malaysia, Singapore, Brunei and Thailand.

The report notes a drop in high school enrollment for both boys and girls, a drop in elementary school enrollment (more for girls than boys), and an increase in child labor (more for boys than girls).

Globally, the report says, the economic crisis has slowed the pace of poverty reduction in developing countries, and is hampering progress toward the other Millennium Development Goals.

It says the crisis has had an impact on several key areas of the development goals, including those related to hunger, child and maternal health, gender equality, access to clean water and disease control, and will continue to affect long-term development prospects well beyond 2015.

“As a result of the crisis, 53 million more people will remain in extreme poverty by 2015 than otherwise would have,” the report says.

“Even so, the report projects that the number of extreme poor could total around 920 million five years from now, marking a significant decline from the 1.8 billion people living in extreme poverty in 1990.”

Murilo Portugal, the IMF’s deputy managing director, says the financial crisis was a severe external shock that hit poor countries hard.

“Its effects could have been far worse were it not for better policies and institutions in developing countries over the past 15 years,” he says.

The report expects GDP growth in the developing countries to accelerate to 6.3 percent in 2010 from 2.4 percent in 2009. Global output is projected to increase to 4.2 percent this year, reversing a decline of 0.6 percent in 2009. Roderick T. dela Cruz, Manila Standard Today