WB: PH poverty level to ease to 17.1% in ’22 | Inquirer Business

WB: PH poverty level to ease to 17.1% in ’22

/ 02:26 AM October 17, 2022

Poverty incidence in the Philippines, recorded at 18.1 percent of the population in 2021, is projected to ease to 17.1 percent this year thanks to recovering labor market indicators, according to the World Bank (WB).

In a two-page commentary on the poverty situation in the country, the World Bank said that a decrease was expected based on its poverty line of $3.65 per day for lower-middle income countries like the Philippines.

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Such was the outlook for the Philippines while, globally, the multilateral lender said efforts in reducing “extreme poverty”—when people subsist on less than $2.15 per day—has ground to a halt.

According to the latest labor force survey of the Philippine Statistics Authority, the rate of employment decreased in August to 94.7 percent from 94.8 percent in July.

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Economic reopening

This still meant a 2.8-percentage-point improvement from 91.9 percent in August 2021, when economic reopening was just gaining momentum.

The World Bank expects the growth of Philippine gross domestic product to go faster at 6.5 percent in 2022 from 5.7 percent in 2021, and average at 5.8 percent in 2023 and 2024.

The bank said strong domestic conditions would compensate for the unfavorable external environment characterized by a global growth deceleration, high global inflation and tighter global financing conditions.

“This year, the economic reopening will benefit the contact-intensive services sector, while industry growth moderates in line with weak manufacturing due to soft external demand,” it added. “Current growth projections augur well for a further decrease in poverty through 2024.”

According to the National Economic and Development Authority, poverty incidence rose to 18.1 percent of the population or about 20 million people in 2021 from 16.7 percent or 17.7 million Filipinos in 2018.

Significant reduction

This happened after a significant reduction in the previous three years from 23.5 percent or 23.7 million people in 2015.

The World Bank’s latest Poverty and Shared Prosperity Report released earlier this month suggests that the world is unlikely to meet the goal of ending extreme poverty by 2030 if there are no “history-defying” rates of economic growth over the remainder of this decade.

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The study estimates that the pandemic pushed about 70 million people into extreme poverty in 2020, the largest one-year increase since global poverty monitoring began in 1990.

As a result, an estimated 719 million people subsisted on less than $2.15 a day by the end of 2020.

“Progress in reducing extreme poverty has essentially halted in tandem with subdued global economic growth,” World Bank Group president David Malpass said in a statement.

“Adjustments of macroeconomic policies are needed to improve the allocation of global capital, foster currency stability, reduce inflation and restart growth in median income,” Malpass said.

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