KEY FINDINGS Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future
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- The Philippines has made significant progress in reducing poverty, but income inequality has only recently begun to fall. Thanks to high growth rates and structural transformation, between 1985 and 2018 poverty fell by two-thirds. However, income inequality did not begin to decline until 2012. It is still high: the top 1 percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent.
- Several structural factors contribute to the persistence of inequality. The expansion of secondary education and mobility to better-paying jobs, citizen ownership of more assets and access to basic services, and government social assistance have helped reduce inequality since the mid-2000s. However, unequal opportunities, lack of access to tertiary education and a scarcity of skills, coupled with inequality in returns to college education, gendered social norms and childcare, and spatial gaps, sustain inequality.
- Inequality of opportunity limits the potential for upward mobility. While there has been considerable progress in expanding access to basic services such as electricity, safe drinking water, and school enrollment, large disparities limit the development of human capital. Inequality of opportunity and low intergenerational mobility waste human potential, resulting in a lack of innovation and a misallocation of human capital in the economy.
- While schooling is widely accessible, its quality and attainment vary by income group. Children from poorer households are less likely to be enrolled and, if they are, to reach age-appropriate grade levels. That means they are less likely to reach tertiary education, which severely constrains their earning potential and their prospects for upward mobility. With the relatively low share of workers with tertiary education, the premium for college education has remained high. Additionally, tertiary education tends to deliver much higher returns for rich than poor households, possibly due to differences in school quality or f ields of study and employment.
- COVID-19 partly reversed decades-long gains in reducing poverty and inequality. The pandemic halted economic growth momentum in 2020, and unemployment shot up in industries that require inperson work. In 2021, poverty rose to 18.1 percent despite large government assistance. The economy has begun to rebound but signs are emerging that the recovery will be uneven. Prolonged loss of income has taken a heavy toll on the poorest households. With food prices going up and a reliance on adverse coping strategies, among them eating less, there is a risk of serious consequences for the health and nutrition of children in vulnerable households.
- The shock from the COVID-19 pandemic led to a shift in the workforce to less productive sectors and occupations. Employment in wage work has notably decreased and employment in agriculture has risen. These trends have been concentrated among youth and the least educated, which suggests an uneven recovery and widening income inequality.
- The pandemic is likely to result in long-term scarring of human capital development. Over half of households estimate that their children learned from remote learning less than half what they would have learned from face-to-face schooling. The proportion increases to 68 percent in poor households. Extended distance learning is expected to have reduced the learning-adjusted years of schooling by over a full year. Learning loss, combined with the de-skilling associated with prolonged unemployment, could lead to sizable future earnings losses.
- Job polarization could further increase as the nature of work changes. Job polarization among wage workers emerged between 2016 and 2021: employment in middle-skilled occupations went down and employment in both low-skilled and high-skilled occupations went up. This pattern may rise with the transformation of jobs post-COVID-19 and could increase prevailing disparities in incomes.
- Policy can reduce inequality by supporting employment and workers, improving education access and quality, promoting inclusive rural development, strengthening social protection mechanisms, and addressing inequality of opportunity.
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Poverty, vulnerability and family size: evidence from the philippines.
- Philippine Institute for Development Studies (PIDS) www.pids.gov.ph/
Focus themes
- Livelihoods
- Children and young people
- Livelihoods and vulnerable groups
- Finance policy
- Domestic finance
- Household poverty
Focus countries
- Philippines
In collaboration with
- Service Philippine Institute for Development Studies (PIDS) www.pids.gov.ph/
- Content Partner Philippine Institute for Development Studies (PIDS) www.pids.gov.ph/
The role of demographic changes in the development of the Philippines has been highlighted in many papers for a considerable period. While it has been credited as one of the earliest adopters of a strong population program in Asia, today its still has not resolved the population problem while her late adopting neighbors have successfully addressed the problem and turned to face other problems.
This paper shows how large family size can be an important contributor to household poverty. It presents results from recent research by the author using nationally representative household survey data that demonstrate clearly how large family size can contribute to poverty and vulnerability through its impact on household savings, labour supply, and parental earnings and education of children. The paper is the most systematic attempt to date to show the links between family size and poverty in the Philippines using household survey data.
The clear implication of the results is that, in the case of the Philippines, an active population policy aimed at restricting family size could have an important impact on poverty reduction.
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Home ⇛ asia-pacific social science review ⇛ vol. 3 no. 2 (2002), the persistence of poverty in the philippines: is globalization the culprit.
Ponciano S. Intal Jr.
Discipline: Economics
This paper highlights the problems of policy inconsistency, structural bottlenecks and budget constraints as contributing significantly to the failure of the Philippines to generate robust economic growth and to the country high vulnerability to external shocks during the 1980s and the 1990s. Poor employment prospects in manufacturing, high food costs, low growth in many agriculture subsectors, and high population and labor force growth rates have led to the high poverty incidence in the Philippines and the slowest pace of poverty reduction in East Asia during the 1980s and 1990s.
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Thursday, September 9, 2010
A hypothesis on poverty.
Destitution is a process in political economy. It is not simply that the technical requirements for labor processes require some kinds of bodies to be denied access [...] It is not simply that revenue for social sector spending is simultaneously squeezed, and thus eligibility for social protection by the state will need to be restricted (Russell and Malhotra, 2001). It is also that the exclusion of people from exploitation is culturally legitimated; society actively allows oppressive practice and, it is argued here, the state is often complicit in this process.
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The main causes of poverty in the country include the following: low to moderate economic growth for the past 40 years; low growth elasticity of poverty reduction; weakness in employment generation and the quality of jobs generated; failure to fully develop the agriculture sector; high inflation during crisis periods; high levels of population ...
The poverty reduction effort in the Philippines has its roots in the early years of development planning after World War II. In the 1950s, given the severity and magnitude of unemployment and underemployment as well as the attendant poverty problem, growth was seen not as a rival target • to poverty alleviation but as an instrument to ...
In the past three decades, the Philippines has made remarkable progress in reducing poverty. Driven by high growth rates and structural transformation, the poverty rate fell by two-thirds, from 49.2 percent in 1985 to 16.7 percent in 2018. By 2018, the middle class had expanded to nearly 12 million people and the economically secure population had risen to 44 million. This report is intended ...
Using the Philippine Family Income and Expenditure Survey, we estimated national and regional Epanechnikov kernel densities to understand how poverty evolved from 2000 to 2015. Results indicated that improvements in Philippine poverty incidence are attributable to various government poverty alleviation programs and to improvements in the ...
Balisacan, A. (2001) "Poverty Comparison in the Philippines: Is What We Know About the . ... Hypothesis Test Base d on Panel Date From Peru," Journal of . Development Economics, 56:181-206. ...
The Philippines aspires to be an upper middle-income country by 2022 as stated in the 2017-2022 Philippine Development Plan. has also committed to the Sustainable It Development Goals (SDGs), where the first goal is to eradicate extreme poverty by 2030. This paper examines the performance of the country with regards to poverty reduction.
The official poverty methodology of the Philippines uses pretax income as a measure of household welfare. A household is deemed poor if its pretax income falls below a minimum income sufficient to ... [1954] and the permanent income hypothesis model of Friedman [1957], 4 households tend to smooth their consumption over time due to uncertainty ...
Abstract. The purpose of this article is to describe the face of poverty in the Philippines. Specifically, through a review of literature, it enumerates the features of destitution in the Philippines, identifies the problems that create, maintain and worsen poverty, and illustrates the coping processes of Filipinos who have made it out of poverty.
Share of population in extreme poverty (1981-2019) In 2021, official government statistics reported that the Philippines had a poverty rate of 18.1%, (or roughly 19.99 million Filipinos), significantly lower than the 49.2 percent recorded in 1985 through years of government poverty reduction efforts. From 2018 to 2021, an estimated 2.3 million Filipinos fell into poverty amid the economic ...
This qualitative study investigated the psychological experience of poverty among 2 groups of Filipinos who were ... A test of the cultural responsiveness hypothesis. ... out of 25) was used in a prior publication: Tuason, M. T. (2002). Culture of Poverty: Lessons From Two Case Studies of Poverty in the Philippines; One Became Rich, the Other ...
Daily Updates of the Latest Projects & Documents. This report looks at the poverty problem in the Philippines. There are more poor people in the Philippines today than at any time in recent history. The situation has .
This qualitative study investigated the psychological experience of poverty among 2 groups of Filipinos who were interviewed about the effects of being raised poor, 12 who became rich, and 13 who remained poor. Using constructivist and critical theories as research paradigms and grounded theory as methodology, the results of the study illustrated perceived causes, coping mechanisms, and ...
Poverty reduction efforts in the Philippines has proven to be of some favorable outcomes in late 80's through the 90's causing the number of the marginalized poor to drop from the rate of 49.2 % in 1985 to 36.9% in 1997. However, after 1997 the rate of poverty has increased from its 1997 rate of 36.9% to 39.5% in 2000.
The corresponding incidence of poverty figures by population are 69% in rural areas, 39% in Manila, and 44% in other urban areas. In addition to location, family size is also correlated with poverty. Of the population living in families of 6 or more members, 66% were below the poverty line, compared with only 48% of those in smaller families.
Abstract. This qualitative study investigated the psychological experience of poverty among 2 groups of Filipinos who were interviewed about the effects of being raised poor, 12 who became rich ...
Levels of poverty, vulnerability and inequality remain high in the Philippines despite positive economic growth in recent years. Social protection is a critical tool for ensuring that growth is in-clusive, yet existing policies in the Philippines remain too limited to have a major impact. The majority of Filipinos cannot currently expect to ...
Philippines has a high rate of poverty, with 16% of people in the Philippines living in a state of poverty and as stated by the Asian Development Bank (2018), 16.7% of the population live below ...
The recent global food crisis affected many, including the poor, throughout the world. In just 2 years, the FAO Food Price Index increased from 124.7 in June 2006 to 224.1 in June 2008; following the financial crisis, the index dropped as low as 141.2 in February 2009.
The Persistence of Poverty in the Philippines: Is Globalization the Culprit? Ponciano S. Intal Jr. Discipline: Economics Abstract: This paper highlights the problems of policy inconsistency, structural bottlenecks and budget constraints as contributing significantly to the failure of the Philippines to generate robust economic growth and to the country high vulnerability to external shocks ...
The relationship between poverty, vulnerability and family size is strong and long-lasting (Orbeta 2005). Households with a large number of dependents, tend to be most directly reliant on natural ...
(Social Reform and Poverty Alleviation Act) identified microfinance as a central strategy for poverty reduction. The Central Bank of the Philippines defines microfinance as the "provision of a broad range of financial services such as deposits, loans, payment services, money transfers and insurance products to the poor and low-income households
A Hypothesis on Poverty. I recently read a paper for class entitled "Destitution and the Poverty of its Politics—With Special Reference to South Asia" by Barbara Harriss-White. Harriss-White analyzes destitition, the state of the poorest of the poor, and finds that it encompasses three aspects: first, "having nothing"—that is, old-fashioned ...