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Poverty in the Philippines

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Poverty in the Philippines

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  • September 30, 2011
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POVERTY IN THE PHILIPPINES

During the 1990s, the Philippines made significant progress in fighting poverty. According to the Family Income and Expenditure Survey of 1997, poverty incidence fell from 49.3% of total population in 1985 to 40.6% in 1994 and 36.8% in 1997. According to an ADB study conducted by Ernie Pernia and Arsenio Balisacan, however, the decline in poverty rates did nothing to improve the country's notoriously inequitable income distribution. Despite the more-or-less sustained economic growth from 1985 to 1997, the poorest 20% of the population only improved their income 0.5% for every 1% growth in average income. In other words, they slipped further behind and income inequality became even more extreme.

Although the Philippines escaped the Asian financial crisis in better shape than many of its neighbors, the crisis did have a significant impact, an impact exacerbated by the damage done to the agricultural sector by the El Niño phenomenon during 1997-98. Both urban and rural sectors were hard hit by rising prices and a weakened labor market, causing poverty to begin edging up again. These factors contributed to a major increase in the number of Filipinos earning less than $276 a year (considered the minimum required to meet basic living requirements here), from 27 million in 1997 to 31 million in 2000 (39.4% of the population)

Poverty in the Philippines is most acute and widespread in rural areas. Although Manila certainly has its share of urban poor, the National Capital Region has the lowest poverty incidence in the country. Nationwide, one can compare the 1997 poverty incidence rates of 21.5% in urban areas to the 50.7% rate in rural areas. The rural poor tend to be self-employed, primarily in agriculture or casual labor. They are almost all landless.

The state of "landlessness" is, of course, nothing new. The Spanish bequeathed to the Americans a colony with an extreme concentration of wealth and land, with the Spanish elites and...