Poor Filipinos on the rise despite economic growth, says ADB

The Philippines holds the peculiarity of being the only country in East Asia where the number of poor people is increasing despite relatively steady economic growth, the Asian Development Bank (ADB) said.

In a study titled ‘Poverty in the Philippines: Causes, Constraints, and Opportunities,’ the Manila-based lender said the country's yearly poverty reduction rate of 0.47 percent is slower than neighboring Cambodia, Indonesia, Laos, Thailand and Vietnam.

The number could further rise as a result of the global economic crisis and recent increases in the poverty incidence, the ADB warned.

“Because of the current global economic crisis and recent increases in the poverty incidence, the goal of reducing the proportion of people living in extreme poverty may not be achieved," it said.

The poorest provinces in the country are mostly located in Mindanao. These are Tawi-Tawi, Zamboanga del Norte, Maguindanao, Lanao del Sur, Surigao del Norte, and Misamis Occidental. The ther poorest provinces are Apayao, Masbate, Northern Samar and Abra.

Poverty trap “For the Philippines, given the main assumption of gross domestic product growth rate of 1.6 percent and considering three scenarios, the poverty incidence will still be in the range of 21.1 percent to 28.7 percent by 2020. Unless the Philippine economy is able to shift to a higher growth trajectory, it might be stuck in a poverty trap," the ADB said.

The main causes of poverty in the country were the low to moderate economic growth for the past 40 years; low growth elasticity of poverty reduction; weak in job generation and low-quality jobs; and the government’s failure to develop the agriculture sector.

The bank also cited high consumer prices during crisis periods; high population growth; inequality in income and assets, which dampen economic expansion; and exposure to economic crisis, conflicts, natural disasters, and environmental poverty.

The study noted that the poverty incidence among households increased from a fourth to 26.9 percent in 2006, while the number of poor families rose from 4 million in 2003 to 4.7 million three years ago.

Meanwhile, the headcount index went up to 32.9 percent in 2006 from 30 percent in 2003, while the number of poor people jumped from 23.8 million in 2003 to 27.6 million three years ago.

The ADB said, self-rated poverty has ranged from 50 percent to 52 percent for most of 2008, peaking at 59 percent — an estimated 10.6 million Filipinos — in the second quarter.

Large families The poor usually have large families — up to six or more members. “Family size is also positively correlated with poverty incidence and vulnerability," the bank said.

Less than a fifth of households with four members or less are poor, and the percentage doubles to more than 40 percent when the household size is six or more, the ADBsaid.

To ensure better anti-poverty efforts, the ADB said the Philippines needs a more coordinated response to attain higher levels of sustained growth and bolster the country's overall development.

“Poverty reduction will not only benefit the poor themselves but society as a whole. It is in everyone's interest to make poverty reduction a priority," said Camila Holmemo, a poverty reduction specialist at ADB"s Southeast Asia Department.

Key priorities should include strengthened social protection, improved human development, more efficient population management, job creation, infrastructure investments, and continued economic reforms for sustained and inclusive growth, the ADB said।

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