Poverty incidence rises in Philippines

ABS-CBN News

Posted at Mar 06 2015 02:35 PM | Updated as of Mar 07 2015 01:48 AM

MANILA – Poverty incidence in the Philippines increased in the first half of 2014, according to the National Economic and Development Authority (NEDA).

Data from the Philippine Statistics Authority (PSA)’s Annual Poverty Indicators Survey (APIS) showed that poverty incidence among Filipino individuals rose by 1.2 percentage points to 25.8 percent in the first semester of 2014 from the 24.6 percent registered in the first half of 2013.

The rise in poverty incidence was attributed to the rapid rise in food prices, particularly of rice, and the lingering effects of Typhoon Yolanda.

Poverty incidence among Filipino families also increased by 1.1 percentage points in the first half of 2014 to 19.9 percent from 18.8 percent in the same period in 2013.

Economic Planning Secretary Arsenio Balisacan noted that per capita income in the first semester of 2014 was higher by 6.4 percent than in 2013.

Among the bottom 30 percent of income-earners, per capita income increased by about 7.3 percent in the same period in the previous year.

The fastest growth rate was seen among those in the fifth income decile (8.5 percent) and the slowest increase was experienced by the top income decile (4 percent).

“Per capita income data in 2014 show that economic growth has benefitted the lower income groups, including the poor. This means that the twin strategies of encouraging investments and production alongside the implementation of a large-scale income redistribution program have worked,” said Balisacan.

The country’s inflation rate, however, hovered near the higher-end of the inflation target in the first half of 2014.

The consumer price index for food went up to 6.5 percent and 2.7 percent for the non-food items in the same period, which offset the growth in per capita income of Filipinos.

“The very high prices of food wiped out the gains in per capita income. This situation could have been avoided especially in the case of rice, which is a staple food for low-income and vulnerable families, usually accounting for 20 percent of their budget. Just at the time when the world price of rice was declining, the domestic price of rice was skyrocketing,” Balisacan explained.

He also stressed the need to revisit government’s quantitative restrictions (QR) policy on rice to achieve rice self-sufficiency goal.

“While we definitely need to support the agriculture sector in general, we should also maximize the gains from trade and globalization. The private sector should be allowed to take the driver’s seat while government simply facilitates the access to both the import and export markets,” he said.

In the first half of 2014, rice prices posted a double-digit growth of 11.9 percent from only 1.7 percent in the same period in 2013 due to a tight supply given lean harvests coupled with less imports.

However, inflation tempered in the latter part of 2014 after measures to address supply constraints were implemented.

Balisacan also stressed the need of updating budget components of government poverty reduction programs to balance the movement of prices and incomes of the poor.

“The government’s social development programs, particularly the Conditional Cash Transfer provided through the Pantawid Pamilyang Pilipino program, may have provided additional support to temper the rise in poverty but could have contributed more towards reducing poverty had the value of the grants increased with inflation,” said Balisacan.

“It is also important to ensure the timely disbursement of the budget to maximize the impact of programs and projects,” he added.

The income and poverty estimates were generated from the 2014 Annual Poverty Indicators Survey but do not include sample households from Batanes and Leyte. To be comparable, the PSA also excluded the poverty statistics of the said provinces in the 2013 poverty estimates.