World Bank sees PH poverty falling below 20% in 2020
Easing inflation and rising incomes are teaming up to bring poverty rate in the Philippines below 20 percent starting in 2020, according to World Bank projections.
The World Bank’s Macro Poverty Outlook for East Asia and the Pacific report released this week said poverty rate was likely to hover within 20.8 percent by end of 2019, down from 26 percent, or more than a quarter of the population, in 2015.
The report was released on the sidelines of a WB meeting.
The WB had estimated poverty rate at 24.5 percent in 2016, 23.1 percent in 2017 and 21.9 percent in 2018.
WB poverty projections were based on lower middle-income poverty line of $3.20 per day.
At that threshold, the WB sees the Philippines’ poverty rate further declining to 19.8 percent next year and 18.7 percent in 2021.
“Despite a temporary growth slowdown in the first half of 2019, progress on shared prosperity is likely to continue,” the WB report said.
It said income among lower-middle class households “grew at a much faster pace than the average.”
The WB said cash transfer schemes, like the 4Ps, “will continue to help cushion the impact of negative shocks.”
“The declining trend in poverty is likely to continue,” the WB said.
In an earlier report last month, the WB said the 12-year-old conditional cash transfer scheme called Pantawid Pamilyang Pilipino Program (4Ps) slashed the nationwide poverty rate by 1.2-1.5 percentage points between 2012 and 2015.
4Ps also reduced income inequality by 0.5-0.6 ppt during the same period, according to the WB.
“Real wages continue to rise and employment continues to expand towards non agriculture wage employment,” the WB said.
The latest poverty rate figure—equivalent to 23.1 million Filipinos— dropped from 28.8 million below the poverty threshold in 2016.
But a 10-year record inflation of 5.2 percent in 2018 “may have dampened gains from higher wage and salary incomes,” the WB said.
The record inflation was blamed mainly on a surge in global oil prices and increase in rice prices brought mainly by lack of supply.
The state planning agency National Economic and Development Authority (Neda) had pointed out that traditionally, full-year poverty rates were lower than those during the first half.
“What we hope is that the increase in income will offset the increase in prices in the second semester of 2018,” said Assistant Socioeconomic Planning Secretary carlos Bernardo Abad Santos last April.
The Philippine Statistics Authority (PSA) will release the full-year 2018 poverty data in December.
The WB said continued “high-quality job creation” and “boosting human capital investment” would further boost the impact of economic growth on poverty reduction and “shared prosperity.”
Investments and government support for industries and sectors that create “high-quality” jobs were needed to further reduce poverty and inequality, the WB said.
Investments on education, health and skills development were also needed “for workers to stay competitive in a fast-changing global work environment,” it said.
Programs, like 4Ps, need to be improved to “support incomes of poor households and help build their resilience,” the WB said./TSB