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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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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]
- Get Involved
What Has Really Happened to Poverty in the Philippines?: New Measures Evidence and Policy Implications
July 31, 2013.
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The Causes and Effects of Poverty in Philippines
Table of contents, some major causes of poverty in the philippines, lack of education, effects of poverty in the philippines, the lack of education in the philippines quality of education, malnutrition, poor economic growth, child labor, bad living conditions, crime/ theft.
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Essay On Social problems And Issues In Philippines
The Philippines, an archipelago nation in Southeast Asia, is renowned for its stunning natural beauty, rich cultural heritage, and warm, hospitable people. From the majestic Banaue Rice Terraces, a UNESCO World Heritage Site, to the vibrant festivals showcasing colorful costumes and lively music, the Philippines pulsates with a unique cultural identity.
However, beneath this captivating facade lie complex social problems that act as roadblocks on the path to progress. This essay will explore two of the most pressing issues: poverty and the lack of access to quality education. These interconnected challenges significantly impact the lives of many Filipinos and hinder the nation’s overall development.
II. Poverty: A Persistent Challenge
A. Defining Poverty in the Philippines
The Philippine Statistics Authority (PSA) defines poverty as the inability to afford the basic necessities of life for a family. This includes food, shelter, clothing, transportation, healthcare, and education. The PSA uses a minimum threshold income, constantly adjusted for inflation, to determine the poverty line. As of 2021, a family of five needed a monthly income of around ₱25,000 (approximately $500) to be considered above the poverty line.
B. The Extent of Poverty
Despite significant progress in poverty reduction over the past decades, the Philippines still grapples with a substantial number of Filipinos living in poverty. According to the PSA’s latest data (2021), 18.1% of the population , which translates to roughly 19.99 million Filipinos , live below the national poverty line. This means nearly one in five Filipinos lack the resources to afford a decent standard of living.
The impact of poverty is far-reaching. It affects families’ health, as they struggle to afford nutritious food and proper healthcare. Children from impoverished backgrounds are more likely to drop out of school due to the need to work or the inability to afford school supplies. Poor quality housing exposes families to the elements and increases the risk of illnesses.
C. Causes of Poverty
Several factors contribute to the persistence of poverty in the Philippines. One major challenge is the lack of decent job opportunities. The unemployment rate, while showing signs of improvement, still sits at 4.2% according to the PSA (November 2022). Underemployment, where people are in jobs that don’t fully utilize their skills or provide sufficient income, remains a significant issue. This lack of quality employment restricts Filipinos’ ability to earn enough to lift themselves out of poverty.
Another factor is the unequal distribution of wealth and resources. A small percentage of the population controls a significant portion of the wealth, while the majority struggles to make ends meet. This disparity limits opportunities for upward mobility and perpetuates the cycle of poverty.
Rapid population growth also plays a role. With a high birth rate, resources get stretched thin, making it challenging for the government to provide adequate social services and infrastructure for all Filipinos.
III. Lack of Access to Quality Education
A. Education: A Key to Breaking the Cycle of Poverty
Education is widely recognized as a powerful tool for poverty reduction and national development. By equipping individuals with knowledge, skills, and critical thinking abilities, education empowers them to secure better jobs, earn higher incomes, and participate meaningfully in society.
B. Challenges in the Philippine Education System
Unfortunately, the Philippines faces significant challenges when it comes to providing quality education for all.
- Limited access to schools: This is particularly true in geographically isolated areas, where schools are scarce and long distances can be a barrier to attendance, especially for young children.
- Poor infrastructure and lack of teaching supplies: Many schools, particularly in public areas, lack basic amenities like proper classrooms, libraries, laboratories, and even electricity. This creates a difficult learning environment for both students and teachers. The lack of essential teaching supplies further hinders effective learning.
- Low quality of instruction: Teacher shortages are a recurring issue, leading to overcrowded classrooms and a limited ability to provide personalized attention to students. Additionally, the curriculum has been criticized for its emphasis on rote memorization over critical thinking and problem-solving skills.
C. Consequences of Inadequate Education
The lack of access to quality education has severe consequences for individuals and the nation as a whole.
- Limited job prospects: Without proper skills and qualifications, Filipinos struggle to find decent employment, trapping them in a cycle of low-wage jobs and poverty.
- Perpetuation of poverty: Limited educational opportunities make it difficult for children from impoverished backgrounds to break free from the cycle of poverty.
- Hindered national development: An undereducated population restricts innovation, economic growth, and the development of a skilled workforce that can compete in the global market.
These issues highlight the urgent need for improvement in the Philippine education system. By ensuring equitable access to quality education, the Philippines can empower its citizens and unlock its full potential for progress.
IV. Social Issues Related to Health, Violence, and Internal Displacement
The Philippines grapples not only with poverty and lack of education but also with a complex web of interconnected social issues that further hinder development.
- Health Concerns: Poverty significantly impacts health outcomes. Filipinos living below the poverty line often lack access to proper healthcare services, leading to higher rates of malnutrition, communicable diseases, and inadequate maternal healthcare. Additionally, the Philippines faces challenges like the rising cost of medication and the increasing burden of non-communicable diseases such as diabetes and heart disease.
- Endemic Violence: Conflict arising from historical grievances, competition for resources, and the presence of armed groups pose a significant threat to public safety in some regions. This violence not only claims lives and disrupts communities but also discourages investment and deters tourism, hindering economic growth.
- Internal Displacement: Natural disasters like typhoons, earthquakes, and volcanic eruptions frequently displace Filipinos from their homes, leaving them vulnerable and in need of assistance. Additionally, ongoing armed conflict also contributes to internal displacement, adding another layer of complexity to the humanitarian response.
These interconnected social issues create a ripple effect, exacerbating existing problems like poverty and hindering the nation’s development. Addressing these challenges requires a multifaceted approach that prioritizes not just immediate relief but also long-term solutions.
V. Government and Civil Society Initiatives
The Philippine government has implemented various programs to address the social issues plaguing the nation.
- Poverty Reduction Programs: The Philippine government, in collaboration with international organizations, has established programs like the Pantawid Pamilyang Pilipino Program (4Ps) which provides conditional cash transfers to impoverished families to encourage them to keep their children in school and access healthcare services.
- Education Reforms: The government has undertaken initiatives like the K to 12 program, which aims to equip graduates with a more robust skillset for higher education or employment. Additionally, efforts are underway to improve teacher training, upgrade school infrastructure, and provide scholarships for underprivileged students.
- Peacebuilding Efforts: The government has pursued peace negotiations with various rebel groups to address historical grievances and pave the way for lasting peace and development in conflict-affected areas.
Civil society organizations (CSOs) also play a crucial role in tackling social problems. CSOs provide essential services, advocate for policy changes, and empower communities.
- Community Development: CSOs work at the grassroots level, implementing programs that address specific needs in education, healthcare, and livelihood development.
- Disaster Response: CSOs are often at the forefront of disaster relief efforts, providing immediate assistance to displaced communities and advocating for long-term reconstruction initiatives.
- Advocacy: CSOs work to raise awareness about social issues and push for government policies that promote social justice and human rights.
Despite these efforts, challenges remain. Government programs face issues like corruption and bureaucratic inefficiencies. CSOs often struggle with limited resources and sustainability. Effective collaboration between the government and civil society is crucial to maximize the impact of these initiatives and address the root causes of social problems.
VI. The Role of Filipinos Abroad (OFWs) in the Philippine Economy and Society
Overseas Filipino Workers (OFWs) play a vital role in the Philippine economy and society, acting as both a source of financial support and a symbol of resilience.
A. Economic Contribution
OFWs are the modern-day heroes of the Philippines. Their remittances, which amounted to $34.9 billion in 2021 according to the Bangko Sentral ng Pilipinas (BSP), act as a significant source of foreign currency. These remittances contribute to:
- Increased Foreign Exchange Reserves: They bolster the country’s foreign exchange reserves, which are crucial for maintaining a stable exchange rate and attracting investments.
- Fueling Domestic Consumption: Remittances are often used by families for basic necessities, education, and housing, stimulating domestic consumption and economic growth.
- Investment in Local Businesses: Many OFWs use their savings to invest in businesses back home, creating jobs and contributing to local development.
B. Social Impact
While the economic contributions are undeniable, the social impact of OFWs is complex.
- Family Separation: Leaving families behind to work abroad can have negative consequences, particularly for children who may experience emotional difficulties and developmental challenges.
- Brain Drain: The Philippines loses skilled professionals when they migrate for work, potentially hindering long-term economic development.
- Shifting Family Dynamics: Remittances can sometimes lead to a power imbalance within families, with those working abroad wielding more authority.
Looking Forward
The Philippine government recognizes the importance of supporting OFWs and their families. Programs are being implemented to provide pre-departure orientation, skills training, and mental health support. Additionally, initiatives encourage investments in areas with high OFW concentration to create job opportunities upon their return.
The story of OFWs is one of both sacrifice and contribution. While challenges exist, harnessing their skills and knowledge upon their return can be a powerful driver of long-term development in the Philippines.
VII. Conclusion: A Hopeful Outlook for the Philippines
The Philippines faces a multitude of social problems, from persistent poverty and lack of quality education to issues like health concerns, violence, and internal displacement. These challenges pose a significant hurdle to the nation’s progress. However, amidst these difficulties, there is also a spirit of resilience and a strong sense of bayanihan (communal effort) that fuels optimism for the future.
The Philippine government’s initiatives, coupled with the tireless efforts of civil society organizations, demonstrate a commitment to tackling these issues. While challenges remain in terms of implementation and resource allocation, these efforts offer a pathway towards a brighter future.
The Filipino people, known for their warmth, perseverance, and entrepreneurial spirit, are a powerful asset. Overseas Filipino Workers, despite the sacrifices they make, contribute significantly to the economy and inspire hope with their determination.
By harnessing the collective strength of its people, investing in education and social services, and fostering a culture of innovation and good governance, the Philippines has the potential to overcome these challenges and achieve inclusive and sustainable development. The road ahead will undoubtedly be demanding, but the Filipino spirit of bayanihan provides a foundation for a brighter future where every Filipino can thrive.
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The Root Causes of Poverty in the Philippines
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