Poverty incidence drops to 21.6%

The country’s poverty incidence for the whole of 2015 has declined to 21.6 percent from 25.2 percent in 2012 and 26.3 percent in 2009, the Philippine Statistics Authority (PSA) reported yesterday.

This current rate is still within the target of 20 to 23 percent set in the Philippine Development Plan (PDP) for the year.

National Economic and Development Authority (NEDA) deputy director general Rosemarie Edillon attributed this to a generally low and stable inflation, improved incomes and

higher employment rates during the period.

“Even so, the rate of poverty reduction between 2012 and 2015 could have been faster, if not for the major shocks, especially the intermittent typhoons and El Niño that adversely affected agricultural production, rural incomes and food prices,” she said during the launch of the report yesterday.

She said the government is raising its target for the reduction of poverty incidence to between 13 to 15 percent by the end of President Duterte’s term in 2022 from the previous target of 17 percent. This would be driven by rural and regional development coupled with addressing the capacity constraints in other economic sectors.

“We’re confident that it can be reduced so much more, especially now we are coming from a much lower base of 21.6 percent. And since we want to up the ante a bit, we’re looking at something like a 1.25 percentage points reduction every year,” said Edillon.

In 2015, the food threshold, or the minimum amount needed to meet a person’s basic food needs, was estimated at P15,189.

The annual per capita poverty threshold or the minimum income required to meet the basic food and non-food needs was estimated at P21, 753. This, however, is higher at P25,007 annually in Metro Manila.

Based on these thresholds, a family of five would need P6,329 per month to meet its basic food needs and P9,064 per month to meet its basic food and non-food needs. This is higher by 15 percent from the requirements in 2012.

Based on the food threshold, it is estimated that 8.1 percent of the population or 8.23 million Filipinos are subsistence poor as their incomes are not sufficient to buy even their basic food needs.

Based on the poverty threshold, on the other hand, poverty incidence was estimated at 21.6 percent. This means 21.93 million Filipinos cannot afford to buy their basic food and non-food needs.

Among Filipino families, the subsistence incidence was estimated at 5.7 percent translating to 1.30 million families who cannot afford their basic food needs.

The poverty threshold, meanwhile, was placed at 16.5 percent translating to 3.75 million families whose incomes are not enough to buy their basic food and non-food needs. This has been falling from 21 percent in 2006, 20.5 percent in 2005, and 19.7 percent in 2012.

Edillon attributed the falling incidence of poverty among families to improving living conditions supported by the government’s conditional cash transfer program.

“This signifies improvements in the quality of living conditions, which may indicate that the programs and projects, such as the conditional cash transfer program, have been gaining traction,” she said.

PSA said that in 2015, a poor family with five members needed an additional monthly income of P2,230 to move out of poverty.

Regions with the lowest poverty incidence among families from 2006 to 2015 remain to be National Capital Region (NCR), Central Luzon, and Calabarzon. From 2012 to 2015, PSA said significant improvements in the poverty incidence was seen in Regions I, II, VI, VIII and XI.

“Still, there is a lot more work ahead, particularly in reducing inequality across regions and sectors. We need to pay greater attention to the lagging regions particularly in Mindanao, as well as to the agriculture sector where many of the poor are found,” said Edillon.

The government, she said, should leverage on employment to sustain the reduction in poverty.

“The underemployment rate still tends to be steep among regions with high poverty incidence. This signals the low earning capacity of the poor and their limited access to regular and productive jobs, otherwise known as in-work poverty. The working arrangements are typically informal, temporary or casual, and low-paid, which cause them to desire additional work,” she said.

Edillon also noted the need to improve the business climate, boost the competitiveness of the productive sectors, and improving access to financing.

Easing restrictions on foreign investments, she said, would also help boost job creation. Reforming agricultural policies to shift the emphasis to food security rather than self-sufficiency would also reduce food prices, particularly of rice.

“This should be accompanied however by appropriate safety nets for farmers who may be potentially displaced,” she said.

Meager savings

Meanwhile, PSA’s 2015 Family Income and Expenditure Survey (FIES) showed that the average Filipino family earned enough to cover annual expenses in 2015 but had little left in terms of savings.

The survey placed the annual family income of an average Filipino family at P267,000 during the reference period, which covers the average annual expenditure of P215,000. As such, families have savings of P52,000 a year on the average.

Families surveyed were ranked into per capita income deciles. The lowest income decile reported annual income of P86,000 while the highest ingovernment’s come decile reported P786,000 annual income.

Those belonging to the lowest income decile registered negative savings during the reference period as their incomes were not enough to meet expenditures. Families in the highest income decile registered expenditure of P534,000 resulting in annual savings of P252,000.