More Filipinos saved from poverty

THE STEADY economic growth in the Philippines over the past three years lifted thousands of Filipinos out of poverty. This to me is a validation that we are on the right track toward our goal of becoming an upper middle-income economy soon.

Preliminary results of the Family Income and Expenditure Survey conducted by the Philippine Statistics Authority show that the poverty incidence among Filipino individuals improved to 21 percent in the first half of 2018 from 27.6 percent in the same period in 2015. Poverty incidence refers to the proportion of the population living below the poverty line.

Poverty incidence among Filipino families, according to the latest PSA data, also eased to 16.1 percent in the first half of 2018 from 22.2 percent in the same period in 2015. The PSA said a family of five needed P10,481 on average in 2018 to meet both basic food and nonfood needs each month, representing the poverty threshold.

The 6.6-percentage-point reduction in poverty incidence over the course of three years became possible because of the sustained economic growth and critical and broad-based reforms and investments that translated into employment generation and social protection, according to the National Economic and Development Authority.

I believe the “Build, Build, Build” infrastructure program of the Duterte administration has already generated tens of thousands of jobs and helped reduce poverty incidence in both rural and urban areas.

Neda itself confirmed the growth in the construction and manufacturing sectors “created more employment opportunities for Filipinos.” It also noted the increase in income of Filipino households as employment shifted to the industry and service sectors from agriculture.

While inflation rate rose to 8.1 percent in the period of 2015-2018 from 7.8 percent in 2012-2015, data show the growth in average income accelerated to 21.2 percent from 15.3 percent.

Neda said the growth in per- capita income of the bottom 30 percent of households picked up to 29.2 percent in the 2015-2018 period from just 20.6 percent in the 2012-2015 period. “This implies an increase in real incomes of the poor, which has helped in reducing poverty among Filipinos,” the economic agency said.

It said the growing contribution of industry, particularly construction and manufacturing, to output and employment would continue to create more income-earning opportunities that are accessible to the poor.

Despite the lower-than-expected 6.2-percent gross domestic product growth in 2018, the growth in employment would continue to reduce poverty incidence in the country in the coming years. Economic growth is expected to pick up this year to around 6.5 percent on the decelerating inflation rate and robust domestic demand, according to the International Monetary Fund. The IMF said growth would be even faster in the coming years.

The PSA reported earlier that the unemployment rate in the Philippines fell to 5.2 percent in January 2019 amid the improving economic conditions. This implies that the poor directly benefits from steady economic growth.

Looking closer at the FIES report, we can find that the poverty incidence in the National Capital Region was only 6.6 percent, compared to the national average of 21 percent. This is consistent with observations that the average income in Metro Manila is around three to four times higher than in other regions.

With the Duterte administration’s strategy to spread out economic activities throughout the country and the infrastructure buildup, more provinces are expected to benefit from the economic growth.

The Build, Build, Build program, for one, will make more towns accessible to investors and tourists, and thus create job opportunities for families living below the poverty line.

Some provinces are now actually enjoying brisk economic activities, as the government builds roads, bridges and airports, implements subsidy programs, and pursues peace initiatives to make growth more inclusive.

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This piece first came out in Business Mirror on April 16, 2019 under the column “The Entrepreneur.” For comments/feedback e-mail to: mbv.secretariat@gmail.com or visitwww.mannyvillar.com.ph./PN