Philippines' poverty rate declines but more job opportunities needed: World Bank

Children play on wooden pallets in Manila Bay, on May 10, 2018.
Children play on wooden pallets in Manila Bay, on May 10, 2018.PHOTO: AFP

MANILA (XINHUA) - The poverty rate in the Philippines has declined by 5 per cent but the World Bank stressed the need to provide more well-paying jobs, especially to the 22 millions Filipinos who still live below the poverty line.

The World Bank says in a new poverty assessment report released on Wednesday (May 30) that robust growth in the Philippines over the past decade has helped reduce the national poverty rate.

Despite the generally good economic performance, the report however says poverty remains high and the pace of poverty reduction has been slow.

From 2006 to 2015, the latest available data, the report says that robust economic growth helped the poverty rate in the Philippines to fall by 5 per cent.

The report says poverty declined from 26.6 per cent in 2006 to 21.6 per cent in 2015, due to factors such as the expansion of jobs outside agriculture, government transfers, in particular to qualified poor Filipinos through the Pantawid Pamilyang Pilipino Program (a conditional cash transfer programme), and remittances.

The report finds that increased wage income and the movement of workers out of agriculture, transfers from government social programmes, and remittances from domestic and foreign sources were major forces in the poverty decline over the past decade.

These gains were tempered by growth that was slower and had a less pro-poor pattern than in many other East Asian countries, as well as the high inequality of income and wealth and the adverse impacts of natural disasters and conflicts, the report says.

"This experience gives us hope that the Philippines can overcome poverty," said Ms Mara Warwick, World Bank's country director for Brunei, Malaysia, the Philippines, and Thailand.

"With a strong economy, the country is well-placed to end the vicious (circles) of unequal opportunity that trap people in poverty, set in place measures to improve service delivery, and boost job opportunities," Ms Warwick said.

In 2015, some 22 million Filipinos, or more than one-fifth of the population, still live below the national poverty line.

Constraints to achieving faster poverty reduction, according to the report, include the less pro-poor pattern of growth; high inequality of income and opportunities; and the adverse impacts of natural disasters and conflict.

Most poor Filipinos have low levels of education and live in large households headed by individuals who are self-employed or work in agriculture as labourers or smallholder producers.

The poorest households are those dependent on agriculture as their main source of income and most of them live in the countryside, in areas prone to disasters or in the conflict-affected areas of Mindanao in southern Philippines.

"Making a difference in Mindanao makes a big difference to the Philippines. Increasing public investment in Mindanao to boost development there would expand opportunities for conflict-affected communities, broaden access to services and create more and better jobs," said senior economist Xubei Luo at the World Bank's Poverty and Equity Global Practice.

Inequitable investment in human capital and insufficient well-paying job opportunities trap the poor in poverty across generations, the report explains.

High concentrations of wealth constrain equal opportunities and access to services, which are necessary for inclusive growth. Natural disasters disproportionately and repeatedly batter the poorest regions of the country, miring them in higher levels of poverty.

The government has prepared strategic plans focused on reducing poverty, specifically AmBisyon 2040, a long-term vision to bring down poverty and improve the lives of the poorest segments of the population, and the Philippine Development Plan (PDP) from 2017 to 2022.

The PDP 2017-2022 spells out strategies and priorities to lay down a solid foundation for more inclusive growth. These plans target reducing poverty to 13 to 15 per cent by 2022.

"The assessment provides us an opportunity to strengthen our collaboration in addressing poverty," Economic Planning Secretary Ernesto Pernia said.