Govt says more Filipinos leaving poverty behind as wages rise

12, Apr. 2019

MANILA, NNA – More Filipinos are escaping poverty due to higher wages and state subsidies for the poor, according to a report by the government.

The Philippine Statistics Authority (PSA) on Wednesday released official poverty figures for the first six months of 2018.

Key points:

The ratio of poor families in the Philippines fell from 22.2 percent of the population in January-June of 2015 to 16.1 percent in same period in 2018. The number of poor individuals, likewise, dropped to 23.1 million, or 21 percent of the population, in the first half of 2018, down from 28.8 million, or 27.6 percent, in January-March 2015. This means 21 out of 100 Filipinos or just over one-fifth were living in poverty in 2018.

The PSA’s poverty threshold income is 10,481 pesos ($201) a month for a family of five, meaning those earning less than that are considered poor. The family needs a threshold of 7,337 pesos for food.

Families earning less than the food threshold are considered to be living in “extreme poverty.” Extremely poor families made up 6.2 percent of the population in the first half of 2018, down from 9.9 percent in same period of 2015.

The Philippines’ state planning agency attributed the decline mainly to increased wages in the first half of 2018. “Growth in the construction and manufacturing sectors created more employment opportunities for Filipinos,”

the National Economic and Development Authority said in a statement.

NEDA also noted an increase in per capita income for the bottom 30 percent of households, or the poorest families, of 29.9 percent in the 2015 to 2018 period from 20.6 percent in the 2012 to 2015 period. Growth in average income accelerated to 21.2 percent in the 2015-2018 period (with inflation at 8.1 percent) from 15.3 percent in 2012-2015 (with inflation at 7.8 percent).

The Philippines’ poverty reduction Conditional Cash Transfer program, a cash subsidy to the poor, also contributed to the poverty rate decline. Eligible poor families receive 500 to 1,400 pesos ($9.65 to $26.99) a month depending on the number of children, plus a 600-peso rice subsidy grant.

“The growth momentum spurred increases in salaries and wages especially of the bottom 30 percent of the population. And the social programs augment this income,” NEDA Assistant Secretary Carlos Bernardo Abad Santos told reporters on Wednesday.

Takeaway:

With the current trend in the poverty rate, the Philippines’ economic planners are confident of reaching a target poverty rate of 13 to 15 percent by 2022. “I think it’s a reasonable expectation that we will be able to achieve that at the end of the Philippine development plan period,” said NEDA Undersecretary Adoracion Navarro.

The conflict-torn ARMM region, now known as the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), remains the poorest region in the country. With the transition to BARMM, the government expects peace-building efforts will create more job opportunities.

The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) questions the poverty threshold set by the government, arguing that it should be much higher at 18,000 pesos ($346.86) a month, due to high prices of commodities.

“It's obvious [the government is setting] wages at the lowest rate to attract more investors to the country. This improving poverty rate is fleeting and not inclusive because jobs are temporary and short-term due to [the] government’s loose policy on security of tenure and meager wages,” Alan Tanjusay, spokesman for the ALU-TUCP, told NNA.