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Poverty and inequality in the Philippines
The new World Bank (WB) report “Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future” is a welcome reminder of what is needed for the country, and the government’s urgent agenda on the dual malaise of poverty and inequality. This had been a persistent challenge to the country, not only historically but also comparatively in the context of the Asean, especially its original neighbors in the region.
The WB paper is well-organized, starting with trends in the past 30 years, the present structural causes, future prospects, and policy recommendations. First, poverty rate declined from 49.2 percent in 1985 to 18.1 percent in 2021. Inequality (Gini index) at 42.4 percent in 1985, after climbing to 49.2 percent, trended back down to 42.3 percent in 2018. The shift of workers, including the poorer ones, to more productive sectors with wage income, besides expanded subsidy, largely accounted for the reduction in poverty. As well, better access to services and assets helped the downtrend in inequality to its previous level.
Nonetheless, the Philippines ranks as the 15th most unequal of 63 countries. More than half of laborers with only elementary schooling or less are in agriculture. Household heads who are college graduates have average per capita income fourfold higher than for household heads with no more than elementary education.
Inequality begins early in life and typically is sustained over the life cycle, starting with antenatal care and postnatal care which are disproportionately accessible to poorer families and mothers with lower education. Which leads to markedly higher rates of stunting, underweight, and wasting among poor families. Then children of poor households are greatly disadvantaged as regards schooling that links to future work and income opportunities. All this leads to intergenerational transmission of poverty.
Unequal distribution of hospitals, health centers, and educational institutions across subnational regions/provinces further worsens poverty and inequality. One bright note is that the Philippines is first in gender equality in Asia and 19th in the world. However, while women have generally higher education attainment than men, their labor force participation rate has been lower.
While the WB paper is an edifying read, it has a limited past perspective, thereby ignoring the population factor, which has made a crucial difference in the current state of the country vis-à-vis its Asean neighbors that used to trail it. The Philippines initiated population management-cum-family planning (PM-FP) program in 1970, along with other Asean countries. However, while the others sustained their programs over time without letup, the Philippines was constrained to jettison its own program in the late ’70s on orders of President Marcos Sr., who acceded for political expediency to the demands of the Catholic Church hierarchy.
In 1970, the Philippines’ population was 36.6 million and Thailand’s was 36.9 million. It had a gross national income (GNI) per capita of $220 close to Thailand’s $210, and both countries had identical poverty incidence at 13 percent.
Indonesia, with a very expansive land area (or resource base), had a much larger population of 115 million and also initiated its PM-FP program in 1970, but its GNI per capita was only $80. Malaysia, with a much smaller population of 11 million in 1970, started its program in 1966, and its GNI per capita was $370.
Fast forward to 2020, the foregoing indicators had dramatically diverged. Philippine population ballooned to nearly 110 million, while Thailand’s rose to slightly less than 70 million. GNI per capita was $3,430 in 2020 ($3,850 in 2019) for the Philippines, and $7,050 ($7,407 in 2019) for Thailand. On the other hand, poverty rate was estimated at 18.1 percent in 2021 (16.7 percent in 2018) for the former, and 8.8 percent in 2020 (6.2 percent in 2019) for the latter.
Indonesia’s population increased to 274 million in 2020. Its GNI per capita rose sharply to $3,870 in 2020 ($4,050 in 2019). Its poverty rate at 13 percent in 1970 was brought down to 9.8 percent by 2020. Malaysia’s population was up to 33 million in 2020, and its GNI per capita escalated exponentially to $10,580 ($11,230 in 2019), which enabled Malaysia to drastically cut its poverty rate to 8.4 percent in 2020 from a high of 49.7 percent in 1970.
The foregoing indicators show that the Philippines had the fastest growing population (threefold in 50 years) and also the largest relative to land area in all of Asean. As regards economic indicators, it has considerably lagged behind its original Asean neighbors, being the last to achieve demographic transition, thereby falling to bottom of the pile from the top in the ’60s to mid-’80s. One wonders, therefore, why the WB paper has eschewed the population factor in their analysis of poverty and inequality. It can be recalled that in the mid-1960s through to the mid-1990s, the World Bank had a major population program touted as a success in many developing countries, save the Philippines, unfortunately. So, is the program now regarded as an “elephant in the room” sleeping and not to be disturbed?
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Ernesto M. Pernia is professor emeritus of economics, University of the Philippines Diliman, and former secretary of socioeconomic planning, National Economic and Development Authority.
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Community Developments
The outreach blog : from the field, the state of poverty in the philippines: what are the causes.
The Philippines and its roughly 117,000,000 people have struggled with income inequality for generations. Even as infrastructure and opportunity has improved in highly populated areas in recent decades, poverty in the Philippines, particularly for people living in remote areas, remains a serious issue.
In this blog post, you’ll learn about the complex issue of chronic poverty in the Philippines, its causes, and its impact on families. Additionally, you’ll see how Outreach International is working to alleviate poverty in this Southeast Asian nation.
Decoding Poverty: A Deep Dive into the Statistics
According to the World Bank , between 1985 and 2018, the poverty rate in the Philippines declined by two-thirds, thanks to economic growth initiatives and investment in infrastructure, including education. However, the improvements were largely focused in the most populated areas, where the most opportunities already existed. According to the Asian Development Bank , the top one percent of earners have benefitted the most, capturing 17 percent of the national income, while only 14 percent of national income is obtained by the lowest-earning 50 percent of the population.
The Philippines’ income inequality stems from several structural factors. Higher education and job skills development remain out of reach for many. Unequal access to college, and social norms that leave women at a disadvantage, also contribute to persistent inequality. And the geography of this archipelago nation makes the issue even more difficult to solve, as opportunities and natural resources are unevenly distributed.
Understanding the Impact of Family Poverty
Family poverty is not just about financial struggle. It affects every aspect of a household’s well-being. Children who live in poverty are less likely to enroll in school and reach age-appropriate grade levels because their time is needed to help the family strive to meet their basic daily subsistence needs. This stifles their access to higher education and the future opportunities it would bring, limiting earning potential, the potential economic growth of families, and the possibility of community development.
Managing Resources: Addressing Poverty in High Population Areas
Population density has a significant impact on poverty in the Philippines. High-population areas often struggle to manage limited natural and government resources, which negatively impacts quality of life. And a lack of job opportunities in densely populated areas contributes to poverty rates. These challenges trickle into remote areas, making it even more difficult for rural communities and marginalized people to break their own unending cycle of poverty .
Living Conditions and Resource Challenges
Living conditions in densely populated areas of the Philippines are affected by resource scarcity and inadequate government support systems. Access to basic necessities like electricity, safe drinking water, and quality education remains uneven. This scarcity not only limits the potential for development across the nation but also perpetuates inequality. As a result, impoverished communities face daily struggles, making it all the more challenging to break free from the cycle of poverty.
The Pandemic’s Impact: A Crisis Amplifying Poverty
The COVID-19 pandemic had a profound impact on poverty in the Philippines. In 2020, the pandemic halted economic growth, leading to even higher unemployment rates. As this trend continued into 2021, poverty rates rose to 18.1 percent (World Bank). This amounts to just under 20 million people. And though the economy continues to recover, this recovery is uneven, with the poorest households benefiting the least. As improvements are bringing many areas back to normal, communities in many remote areas still struggle to bring their economies back to even just the already challenging pre-pandemic levels.
One constant struggle for families living in poverty is food insecurity. And according to sources such as the National Library of Medicine , this became even more significant during the pandemic. Almost two-thirds (61.2%) of households experienced moderate to severe food insecurity during the many months of quarantine. And with rising food prices and limited natural resources, vulnerable households often had to limit their food intake. This caused a lack of proper nutrition, particularly for children. Outreach International has implemented an effective method of combating food insecurity for even the most impoverished families. Our partners in OPI have helped community-led organizations develop rice loans . These are low-interest loans of rice or the funds to buy it. And because the communities manage these loans themselves, borrowers can avoid predatory outside lending institutions and can deal with people they know and trust.
Initiatives That Changed the Reality
In response to the challenges posed by the pandemic, both the Philippine government and organizations like Outreach International have implemented various initiatives to alleviate poverty and its effects. Some organizations have provided health services and relief assistance to affected communities. Such initiatives are essential in mitigating the immediate impact of the crisis and helping vulnerable populations in the short term.
But Outreach International also focuses on more long-term and sustainable initiatives that can forever break the cycle of poverty . Our methodology of community-led development allows people who live in chronic poverty to learn that they have the power within themselves to improve their lives permanently. Our partners in the Philippines, Outreach Philippines Incorporated (OPI), work with leaders in communities to identify their own unique poverty-related issues, and then mobilize to solve them. They learn how to develop networks with government agencies and NGOs that are able to provide resources. And they learn how to set ever-increasing goals of improvement, leading to continuous development that is sustainable for generations.
Join the Cause: How You Can Help
You can choose to play a role in alleviating poverty in the Philippines. And there are so many ways to help , from donating to Outreach International to fundraising to volunteering . By working together, we can collectively make a difference in the lives of those affected by poverty in the Philippines.
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Social Equity in the Philippines: A Continuing but Elusive Promise
- First Online: 26 May 2019
Cite this chapter
- Alex B. Brillantes Jr 2 ,
- Maria Victoria R. Raquiza 2 &
- Maria Pilar M. Lorenzo 3
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In this chapter, Brillantes, Raquiza, and Lorenzo focus on the imperatives of social equity as a fundamental—but normative—principle for contemporary Philippine public administration. The pursuit of social equity may be seen as a response to the problems of pervasive poverty and inequality in spite of, paradoxically, rapid economic growth. The chapter cites two government programs that ostensibly aim to bring about social equity, the Conditional Cash Transfer program and the Tax Reform for Acceleration and Inclusion law. Evidence has shown that both programs have yet to make a significant impact to redistribute wealth in a lasting way within the context of social equity. Hence, the chapter argues that social equity in the Philippines is a continuing process but remains an elusive goal.
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These senior scholars of public administration included Raul P. de Guzman, Onofre D. Corpuz, Ledivina V. Carino, Nestor N. Pilar, and Romeo B. Ocampo whose essays addressing the question were included in a special issue of the Philippine Journal of Public Administration , 30, p. 4, October 1986.
Ledivina C. Carino, Maria Concepcion Alfiler, Nestor Pilar, and Emmanuel Buendia led the calls to indigenize and localize the theory and practice of public administration in the Philippines. The Philippines Journal of Public Administration devoted a special issue on the search indigenous forms of governance and public administration: Domingo, M.O. (2004). Indigenous Leadership and Governance. Philippines Journal of Public Administration, 48 , 1–2. Manila: PJPA.
Brillantes and Fernandez ( 2008 ) argued that the homegrown movement called Gawad Kalinga (which means “to give care”) was an example of a uniquely Philippine governance (civil society taking the lead here, in partnership with government and business sectors) approach that bore distinctive traits of Philippine public administration with a very distinct social equity character. Founded by Antonio Meloto, GK has been recognized not only locally but internationally as well.
The New Public Administration (NPA) movement emerged in the US in the late 1960s and early 1970s during the Minnowbrook conference where social equity emerged as a normative base of public administration (Frederickson 2010 , p. 3).
Over the years, Brillantes and Perante-Calina have argued for the imperatives of equity, ethics , and accountability to be among the classic 3Es of management. This has been included in the public sector reform framework. See, for instance, Alex, Brillantes Jr., and Lizan, Perante-Calina. “Antonio Meloto: Empowering the Filipino Poor Toward Sustainable and Innovative Communities” in Ayano et al. (eds.), Knowledge Creation in Community Development. Institutional Change in Southeast Asia and Japan , Palgrave: Macmillan. (2018), where our public sector reform framework has been developed.
We use praxis liberally to suggest the combination of “theory and practice” of public administration.
That Philippine “independence ” was set by the Americans to coincide with American independence day was no coincidence. This essentially reflected America’s desire for its erstwhile colony to continue to reflect the image and values of its former colonial master. This has since been rectified by President Diosdado Macapagal in the early 1960s by announcing the date of independence of the Philippines as 19 June 1898, when the Philippines declared its independence from Spain after the Philippine revolution. Strangely, on the Philippine side, July 4 has been declared as “Philippine-American Friendship day” naively celebrated only by the Philippines, betraying the continued colonialism still present in the Philippines.
The Philippine civil service and bureaucracy was set up by the US at the turn of the century on 19 September 1900 with the Act No. 5 entitled “An Act for the Establishment and Maintenance of an Efficient and Honest Civil Service in the Philippines”. Its structure and processes were largely patterned after the American civil service , including the adoption of the principles of efficiency and meritocracy in the civil service.
Poverty incidence is the proportion of families/individuals with per capita income less than the per capita poverty threshold to the total number of families /individuals.
According to the Asian Institute of Journalism and Communication (AIJC), Filipino Muslims are “not integrated as one definable and united society” but possess characteristics endemic to them such as “1. language 2. political structure 3. history and degree of Islamic integration with cultural traditions and customs already existent. Each of the subgroups has been proud of its separated identity and conflict between communities has been endemic throughout Philippine Muslim history. However, there common experiences, especially in relation to non-Muslim Filipinos, have somehow brought them together time and again” on (27 January 2019 from http://www.muslimmindanao.ph/Islam_phil2.html )
Today, reducing poverty in the short- to medium-term stages of the program objective has since been dropped. The program is currently presented as a ‘human development measure to improve the health, nutrition and the education of children aged 0–18’ (Accessed at: http://www.officialgazette.gov.ph/programs/conditional-cash-transfer/ Downloaded: 14 May 2018). The program’s other objectives are to provide cash assistance to poor families ‘to respond to their immediate needs’ and to address ‘intergenerational poverty cycle by investing in the health and education of poor children’.
Even if the country’s poverty incidence, as measured by the Philippine Statistics Authority, declined from 26.3 to 21.6 at the end of 2015, this could not be attributed to Pantawid Pamilya given the findings of the two earlier impact evaluations and the fact that was no other impact evaluation was conducted to cover 2015 when the 2015 PSA finding on poverty was released.
Infrastructure here covers personnel, facilities, and supplies.
US$ 1 = PhP 53.13 (2 November 2018 conversion rate).
Since 2003, Gawad Kalinga has been receiving various awards, some of the most prominent ones are the following: 2006 The Outstanding Filipino Award (TOFIL) Awardee for Community Service, 2006 Ramon Magsaysay Award for Community Leadership, 2009 Hilton Humanitarian Award Finalist, 2010 Reader’s Digest Asia Philippines’ Most Trusted, 2010 Schwab Foundation for Social Entrepreneurship, 2010 Asia CEO Awards, 2010 Ernst & Young’s Social Entrepreneur of the Year Philippines, 2011 Nikkei Asia Awards, and 2012 Skoll Award for Social Entrepreneurship.
In the back cover of the book Social Equity in Public Administration (Frederickson 2010 ) the following “for whom” questions were raised within the context of social equity: “Social equity values have to do with the fairness of the organization, its management, and its delivery of public services. Social equity asks these questions: For whom is the organization well managed? For whom is the organization efficient: For whom is the organization economical? Are public services more or less fairly delivered?”
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Brillantes, A.B., Raquiza, M.V.R., Lorenzo, M.P.M. (2019). Social Equity in the Philippines: A Continuing but Elusive Promise. In: Johansen, M. (eds) Social Equity in the Asia-Pacific Region. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-15919-1_11
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The Philippines Can Overcome Poverty
Opening Remarks by Mara K. Warwick, Country Director for Brunei, Malaysia, Philippines and Thailand
at the launch of Making Growth Work for the Poor: A Poverty Assessment for the Philippines
As Prepared for Delivery
I am pleased to welcome you to today’s media briefing on the Philippines Poverty Assessment report, entitled “ Making Growth Work for the Poor: A Poverty Assessment for the Philippines .”
The Report has two important stories to tell. The first story is inspiring. And gives everyone hope: The Philippines can overcome poverty!
The reason for this optimism is that from 2006 to 2015, robust economic growth helped the poverty rate in the Philippines to fall by 5 percentage points. Hence, poverty declined from 26.6 percent in 2006 to 21.6 percent in 2015. The contributing factors for this decline in poverty were the expansion of jobs outside agriculture, government transfers, in particular to qualified poor families through the Pantawid Pamilyang Pilipino Program, and remittances.
School enrollment has notably increased in recent years, with universal and mandatory kindergarten as well as two years of senior high school added to the education cycles. Pro-poor policies and changes to health insurance coverage have resulted in increased use of health services. Access to clean water and sanitation and electricity has improved. Social safety nets were expanded to cover most of the poor.
All these developments give us hope that poverty can be overcome. It is not at all insurmountable.
But here is the second story, an equally important one: The Philippines needs to do more to end poverty.
While poverty has declined, there are still about 22 million poor Filipinos, as of 2015. These poor families most often live in rural areas with limited access to quality schools, health centers, and safe drinking water, not to mention, roads and transportation that will help them go to their jobs or bring their produce to market.
Some poor families live in areas scarred by conflict or prone to natural disasters. Conflict can force families to move far away from their homes. Disasters can knock down families that are struggling to climb the economic ladder.
Poor families are most often trapped in a vicious cycle of poverty. They usually have many children, an average of 5 per family. Pregnant mothers face high risk: every day, 5 Filipina women die in childbirth or due to other causes related to pregnancy.
In a poor family of 5 children, 2 will likely be stunted, a visible sign of malnutrition. Children who remain malnourished in the first 1000 days of their lives do not fully develop the neural connections in their brains, making them unable to reach their full potential, even as adults.
Just half the children in the poor households will enroll in lower secondary school. Even those who do enroll may learn little due to malnourishment and poor quality of instruction. As a result, when they grow up, their chances of getting a well-paying job are slim.
So the Philippines has experienced success in reducing poverty. But there are remaining challenges, What can we all do together to end poverty?
How can we unlock this trap and make growth work for the poor? How can one family break from the path of poverty so the future generations have a better life than their parents or grandparents?
I want to highlight a few particular points.
The number one priority is creating more and better jobs, to offer opportunity for the poor to lift themselves out of poverty.
Since two out of five of the country’s poor are in Mindanao, unlocking Mindanao’s potential is critical in bringing down poverty in the entire country.
In addition, tackling the country’s severe stunting crisis will require an all hands-on-deck effort, starting with maternal health and focusing health interventions on the “first 1000 days” of life.
And creating opportunities for children means also ensuring that the poor attend school and that the schools they attend foster learning.
Many of these policy suggestions align well with the Government’s long-term vision -- the AmBisyon 2040 and the Philippine Development Plan 2017–2022 , which aims to transform the country into a prosperous middle-class society.
In closing, I would like to repeat the message: With solid economic fundamentals, the Philippines can overcome poverty. It is important to break the cycle of inequitable investment in human capital, making the pattern of growth more inclusive and creating opportunities for more and better jobs.
The World Bank believes that, together, with various stakeholders, we can take concrete actions to end poverty in the Philippines.
Before I close, let me add one remark. The Poverty Assessment is an analytical report – we have delved into the data and information that’s available on poverty to come up with an up-to-date and sound analytical basis for policy making. It is a foundational piece and more work will be done by us and others to really take the recommendations and to work in more detail on how to do that -- what needs to change in the Philippines in order to address the problems in a more focused way and how to carry these forward. Our team will also explain during the Q and A session that there will also be other follow up work by the World Bank, by government, and others to take these recommendations to the policy realm.
Thank you very much and may we all have a very fruitful discussion today.
Maraming Salamat Po! [Thank you very much!]
In Manila: David Llorito, +63-465-2514, [email protected]
Home / Essay Samples / Social Issues / Homelessness / The Root Causes of Poverty in the Philippines
The Root Causes of Poverty in the Philippines
- Category: Social Issues , Economics , Government
- Topic: Homelessness , Income Inequality , Unemployment
Pages: 4 (1661 words)
Views: 1680
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