If the Philippine economy continues its current pace of economic growth of around 6 percent every year, poverty can be eradicated in just one generation, as the average income of Filipinos can double in 10 years and grow twelvefold in 30 years, World Bank Philippines lead economist Rogier van den Brink said on Thursday.
The 6-percent growth is below the revised World Bank target for the Philippines this year and in 2015, as well as the growth projections made by the government.
“For 2014 as a whole, growth projections are revised downward from 6.6 percent to 6.4 percent for 2014 and from 6.9 percent to 6.7 percent for 2015. Sustaining growth at this rate would increase per-capita income by two times in 10 years, five times in 20 years and 12 times in 30 years,” van den Brink said.
“When we use this idea of maintaining growth rates at these levels, at 6 percent for 10 years, for 20 years, for 30 years, this is to say that at these levels, in one generation, you can definitely eradicate poverty,” he added.
The government targets a growth of 6.5 percent to 7.5 percent in 2014 and 7 percent to 8 percent in 2015.
World Bank Philippines senior country economist Karl Kendrick T. Chua said significantly growing the country’s per-capita income is not a far-fetched goal.
Chua said in the last 10 years, the country’s gross domestic product per capita grew by an average of 3.4 percent, higher than the average of 1.4 percent between 1950 and 2003.
This, he explained, enabled the country to double per-capita income in just seven years to $3,270 from $1,660.
Data from the Philippine Statistics Authority (PSA) estimated that the country’s gross national income (GNI) per capita is at P82,796, or around $1,925.49, in 2013.
Using the World Bank’s projections and PSA data, the country’s per-capita GNI could grow to P165,592, or $3,850.98, in a decade and P413,980, or $9,627.44, in 20 years.
In 30 years, the country’s per-capita GNI could increase to around P993,552, or $23,105.86.
“This is the experience Malaysia, Thailand and China had in the last three decades. In the last seven years when growth reached as high as 7 percent to 7.5 percent, we were able to double per-capita GNI in just seven years. So, I guess, there’s a bright prospect for us and this growth really has to be sustained,” Chua said.
Chua said growth can be sustained by increased investments, particularly on the health and education of the poor.
The World Bank Group estimates that the country needs to spend an additional 5 percent of GDP on health and education to raise labor productivity and competitiveness of Filipino workers. This is on top of the government’s planned doubling of infrastructure spending to 5 percent of GDP.
The World Bank said the country’s poverty incidence between 2000 and 2012 was slow to decline. It was only in 2013 when poverty reduction posted a considerable decline.
It added that decent jobs continue to be a challenge. The Washington-based lender said around 75 percent of Filipino workers have at least one attribute of informality, such as the lack of a written contract, social or health insurance and protection from dismissal.
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