PH think tank study: Poverty eradication doable in 2030 if…

MANILA, Philippines—It is possible for the Philippines to wipe out chronic poverty but only if it uplifted the most vulnerable populations, especially in the agriculture sector, and made itself more disaster-resilient, according to the state-run think tank Philippine Institute for Development Studies (PIDS).

“We can eradicate chronic poverty by 2030 with sustained and inclusive economic growth but it would be difficult to eradicate transient poverty due to the various shocks that we experience,” said former PIDS president Celia Reyes in a paper published on Monday (Dec. 27) titled “Is Eradicating Poverty In the Philippines by 2030 Doable?”

The transient poor Reyes referred to included those who temporarily slid to poverty due to shocks like the COVID-19 pandemic and natural disasters. Reyes noted that the government’s poverty statistics currently did not differentiate between chronic and transient poverty.

The latest Philippine Statistics Authority (PSA) data released this month showed that the nationwide poverty rate rose to 23.7 percent — equivalent to 26.1 million Filipinos — in the first half of 2021, from 21.1 percent or 22.3 million poor Filipinos during the same period in 2018, mainly due to the prolonged COVID-19 pandemic plus high food prices at the start of 2021.

The onslaught of Super Typhoon Odette this month was expected to aggravate transient poverty, which prompted Socioeconomic Planning Secretary Karl Kendrick Chua to seek immediate relief for worst hit areas and population.

“We should have risk management strategies in place to minimize transient poverty and well-designed and well-targeted social protection programs to help the new poor recover more quickly from shocks,” Reyes said.

On top of its AmBisyon Natin 2040 long-term vision aimed at making the country a prosperous, middle-class society where no one is poor 19 years from now, the Philippines had also committed to the United Nations’ (UN) sustainable development goals (SGD), one of which was to wipe out poverty by 2030.

Reyes pointed to recent gains in poverty alleviation, including the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which had lowered personal income tax rates, and, in turn, “reduced the tax burden on the poor,” she said.

However, much more was needed to be done as economic growth alone cannot eliminate poverty.

“For periods of sustained economic growth, the pace of poverty reduction has accelerated. However, the country is known for a boom-bust cycle of growth, where periods of growth have been disrupted by natural and man-made shocks,” Reyes noted.

Prior to the COVID-19 pandemic, the Philippines’ poverty rate dipped to a record-low 16.7 percent in end-2018. The Duterte administration targets a lower poverty rate of 15.5-17.5 percent in 2022 when President Rodrigo Duterte steps down.

For Reyes, chronic poverty can be eliminated if the government will promote more inclusive economic growth, especially in the agriculture sector, where the majority of the country’s poor currently belong. In particular, Reyes urged expanding agriculture risk management via agricultural insurance.

Reyes also urged these measures:

• Increase education opportunities
• Increase access to reproductive health services among poor and marginalized sectors
• Expand risk management tools to cope with catastrophic illnesses through the state-run Philippine Health Insurance Corp. (PhilHealth)
• Improve the design, targeting and implementation of social protection programs like the Pantawid Pamilyang Pilipino Program (4Ps) and social amelioration program (SAP), especially when disasters and disease outbreaks strike.

“Education is a pathway out of poverty,” said Reyes.

“The 4Ps program, providing incentives to families to send their children to school, can be improved by targeting the chronic poor. This would reduce the number of beneficiaries significantly,” she said.

“Moreover, the policy on providing free tuition to all in public tertiary institutions should be revisited to see if this could be targeted to the poor, to make it more pro-poor. The students belonging to the richer income groups need not be given financial assistance and this would make the program more financially sustainable,” Reyes said.

Also, Reyes said keeping consumer prices stable through increased market competition would slash poverty.

“The Rice Tariffication Law, enacted in 2019, liberalizes the importation, exportation and trading of rice to reduce the retail price of rice,” Reyes said.

“There are still commodities where prices are much higher in the country than in the neighboring countries and policies can be revisited to identify measures to make these sectors more competitive,” she said.

“Electricity prices in the country are the second highest in the region. Prices of medicines in the country are much higher than in Vietnam and India,” Reyes noted.

Improving disaster preparedness and conducting post-disaster assessments would also help reduce poverty, Reyes added.

“Since the country is vulnerable to shocks and shocks can lead to higher transient poverty, disaster preparedness is important,” her report said.

“Greater capacity building for local government units in preparing for disasters, will be helpful in dealing with the shocks,” it added.

“Putting in place the necessary infrastructure, such as evacuation centers, will facilitate immediate response. In addition to identifying evacuation centers, lists of persons who should go to where could be prepared ahead of time and this will also facilitate positioning of food packs and other supplies,” she said.

“While we are regularly visited by natural disasters and other shocks, we do not draw lessons from past experiences to allow us to identify best practices and replicate these throughout the country,” Reyes said.

“There is a need to conduct post-disaster assessment to determine gaps and come up with solutions to address these gaps. It is important to document responses made and critically assess these and learn from them,” she added.

TSB