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The outreach blog : from the field, the state of poverty in the philippines: what are the causes.

The Philippines and its roughly 117,000,000 people have struggled with income inequality for generations. Even as infrastructure and opportunity has improved in highly populated areas in recent decades, poverty in the Philippines, particularly for people living in remote areas, remains a serious issue.

In this blog post, you’ll learn about the complex issue of chronic poverty in the Philippines, its causes, and its impact on families. Additionally, you’ll see how Outreach International is working to alleviate poverty in this Southeast Asian nation.

Adequate access to safe water is a pressing issue for many rural communities in the Philippines.

Decoding Poverty: A Deep Dive into the Statistics

According to the World Bank , between 1985 and 2018, the poverty rate in the Philippines declined by two-thirds, thanks to economic growth initiatives and investment in infrastructure, including education. However, the improvements were largely focused in the most populated areas, where the most opportunities already existed. According to the Asian Development Bank , the top one percent of earners have benefitted the most, capturing 17 percent of the national income, while only 14 percent of national income is obtained by the lowest-earning 50 percent of the population.

The Philippines’ income inequality stems from several structural factors. Higher education and job skills development remain out of reach for many. Unequal access to college, and social norms that leave women at a disadvantage, also contribute to persistent inequality. And the geography of this archipelago nation makes the issue even more difficult to solve, as opportunities and natural resources are unevenly distributed.

Communities work to fight poverty in the Philippines.

Understanding the Impact of Family Poverty

Family poverty is not just about financial struggle. It affects every aspect of a household’s well-being. Children who live in poverty are less likely to enroll in school and reach age-appropriate grade levels because their time is needed to help the family strive to meet their basic daily subsistence needs. This stifles their access to higher education and the future opportunities it would bring, limiting earning potential, the potential economic growth of families, and the possibility of community development.

Children attend school in the Philippines.

Managing Resources: Addressing Poverty in High Population Areas

Population density has a significant impact on poverty in the Philippines. High-population areas often struggle to manage limited natural and government resources, which negatively impacts quality of life. And a lack of job opportunities in densely populated areas contributes to poverty rates. These challenges trickle into remote areas, making it even more difficult for rural communities and marginalized people to break their own unending cycle of poverty .

Living Conditions and Resource Challenges

Living conditions in densely populated areas of the Philippines are affected by resource scarcity and inadequate government support systems. Access to basic necessities like electricity, safe drinking water, and quality education remains uneven. This scarcity not only limits the potential for development across the nation but also perpetuates inequality. As a result, impoverished communities face daily struggles, making it all the more challenging to break free from the cycle of poverty.

Communities identify access to safe water as an urgent issue in the Philippines.

The Pandemic’s Impact: A Crisis Amplifying Poverty

The COVID-19 pandemic had a profound impact on poverty in the Philippines. In 2020, the pandemic halted economic growth, leading to even higher unemployment rates. As this trend continued into 2021, poverty rates rose to 18.1 percent (World Bank). This amounts to just under 20 million people. And though the economy continues to recover, this recovery is uneven, with the poorest households benefiting the least. As improvements are bringing many areas back to normal, communities in many remote areas still struggle to bring their economies back to even just the already challenging pre-pandemic levels.

A remote Philippine community gains access to safe water.

One constant struggle for families living in poverty is food insecurity. And according to sources such as the National Library of Medicine , this became even more significant during the pandemic. Almost two-thirds (61.2%) of households experienced moderate to severe food insecurity during the many months of quarantine. And with rising food prices and limited natural resources, vulnerable households often had to limit their food intake. This caused a lack of proper nutrition, particularly for children. Outreach International has implemented an effective method of combating food insecurity for even the most impoverished families. Our partners in OPI have helped community-led organizations develop rice loans . These are low-interest loans of rice or the funds to buy it. And because the communities manage these loans themselves, borrowers can avoid predatory outside lending institutions and can deal with people they know and trust.

Community-led rice loans are a brilliant solution for fighting poverty in the Philippines.

Initiatives That Changed the Reality

In response to the challenges posed by the pandemic, both the Philippine government and organizations like Outreach International have implemented various initiatives to alleviate poverty and its effects. Some organizations have provided health services and relief assistance to affected communities. Such initiatives are essential in mitigating the immediate impact of the crisis and helping vulnerable populations in the short term.

Community-led organizations in the Philippines work tirelessly to solve their poverty-related issues.

But Outreach International also focuses on more long-term and sustainable initiatives that can forever break the cycle of poverty . Our methodology of community-led development allows people who live in chronic poverty to learn that they have the power within themselves to improve their lives permanently. Our partners in the Philippines, Outreach Philippines Incorporated (OPI), work with leaders in communities to identify their own unique poverty-related issues, and then mobilize to solve them. They learn how to develop networks with government agencies and NGOs that are able to provide resources. And they learn how to set ever-increasing goals of improvement, leading to continuous development that is sustainable for generations.

Join the Cause: How You Can Help

You can choose to play a role in alleviating poverty in the Philippines. And there are so many ways to help , from donating to Outreach International to fundraising to volunteering . By working together, we can collectively make a difference in the lives of those affected by poverty in the Philippines.

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Poverty and inequality in the Philippines

The new World Bank (WB) report “Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future” is a welcome reminder of what is needed for the country, and the government’s urgent agenda on the dual malaise of poverty and inequality. This had been a persistent challenge to the country, not only historically but also comparatively in the context of the Asean, especially its original neighbors in the region.

The WB paper is well-organized, starting with trends in the past 30 years, the present structural causes, future prospects, and policy recommendations. First, poverty rate declined from 49.2 percent in 1985 to 18.1 percent in 2021. Inequality (Gini index) at 42.4 percent in 1985, after climbing to 49.2 percent, trended back down to 42.3 percent in 2018. The shift of workers, including the poorer ones, to more productive sectors with wage income, besides expanded subsidy, largely accounted for the reduction in poverty. As well, better access to services and assets helped the downtrend in inequality to its previous level.

Nonetheless, the Philippines ranks as the 15th most unequal of 63 countries. More than half of laborers with only elementary schooling or less are in agriculture. Household heads who are college graduates have average per capita income fourfold higher than for household heads with no more than elementary education.

Inequality begins early in life and typically is sustained over the life cycle, starting with antenatal care and postnatal care which are disproportionately accessible to poorer families and mothers with lower education. Which leads to markedly higher rates of stunting, underweight, and wasting among poor families. Then children of poor households are greatly disadvantaged as regards schooling that links to future work and income opportunities. All this leads to intergenerational transmission of poverty.

Unequal distribution of hospitals, health centers, and educational institutions across subnational regions/provinces further worsens poverty and inequality. One bright note is that the Philippines is first in gender equality in Asia and 19th in the world. However, while women have generally higher education attainment than men, their labor force participation rate has been lower.

While the WB paper is an edifying read, it has a limited past perspective, thereby ignoring the population factor, which has made a crucial difference in the current state of the country vis-à-vis its Asean neighbors that used to trail it. The Philippines initiated population management-cum-family planning (PM-FP) program in 1970, along with other Asean countries. However, while the others sustained their programs over time without letup, the Philippines was constrained to jettison its own program in the late ’70s on orders of President Marcos Sr., who acceded for political expediency to the demands of the Catholic Church hierarchy.

In 1970, the Philippines’ population was 36.6 million and Thailand’s was 36.9 million. It had a gross national income (GNI) per capita of $220 close to Thailand’s $210, and both countries had identical poverty incidence at 13 percent.

Indonesia, with a very expansive land area (or resource base), had a much larger population of 115 million and also initiated its PM-FP program in 1970, but its GNI per capita was only $80. Malaysia, with a much smaller population of 11 million in 1970, started its program in 1966, and its GNI per capita was $370.

Fast forward to 2020, the foregoing indicators had dramatically diverged. Philippine population ballooned to nearly 110 million, while Thailand’s rose to slightly less than 70 million. GNI per capita was $3,430 in 2020 ($3,850 in 2019) for the Philippines, and $7,050 ($7,407 in 2019) for Thailand. On the other hand, poverty rate was estimated at 18.1 percent in 2021 (16.7 percent in 2018) for the former, and 8.8 percent in 2020 (6.2 percent in 2019) for the latter.

Indonesia’s population increased to 274 million in 2020. Its GNI per capita rose sharply to $3,870 in 2020 ($4,050 in 2019). Its poverty rate at 13 percent in 1970 was brought down to 9.8 percent by 2020. Malaysia’s population was up to 33 million in 2020, and its GNI per capita escalated exponentially to $10,580 ($11,230 in 2019), which enabled Malaysia to drastically cut its poverty rate to 8.4 percent in 2020 from a high of 49.7 percent in 1970.

The foregoing indicators show that the Philippines had the fastest growing population (threefold in 50 years) and also the largest relative to land area in all of Asean. As regards economic indicators, it has considerably lagged behind its original Asean neighbors, being the last to achieve demographic transition, thereby falling to bottom of the pile from the top in the ’60s to mid-’80s. One wonders, therefore, why the WB paper has eschewed the population factor in their analysis of poverty and inequality. It can be recalled that in the mid-1960s through to the mid-1990s, the World Bank had a major population program touted as a success in many developing countries, save the Philippines, unfortunately. So, is the program now regarded as an “elephant in the room” sleeping and not to be disturbed?

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Ernesto M. Pernia is professor emeritus of economics, University of the Philippines Diliman, and former secretary of socioeconomic planning, National Economic and Development Authority.

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PHILIPPINES: Reducing Inequality Key to Becoming a Middle-Class Society Free of Poverty

MANILA, November 24, 2022 – Policies that support employment and workers, raise education quality and improve access, boost rural development, and strengthen social protection can reduce inequality, thus enhancing Filipino peoples’ chances for improving their well-being.

In a report titled “Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future” released today, the World Bank said that the Philippines has made important gains in poverty reduction. Driven by high growth rates and the expansion of jobs outside agriculture, poverty fell by two-thirds—from 49.2 percent in 1985 to 16.7 percent in 2018. By 2018, the middle class had expanded to nearly 12 million people and the economically secure population had risen to 44 million.

Yet inequality remains high: the top 1 percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent. With an income Gini coefficient of 42.3 percent in 2018, the Philippines had one of the highest rates of income inequality in East Asia.

“The Philippines aims to become a middle-class society free of poverty by 2040, but we know from global experience that no country has managed to make this transition while maintaining high levels of inequality,” said Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand . “Inequality of opportunity and low mobility across generations wastes human potential and slowdown innovation, which is crucial for building a competitive and prosperous economy that will in turn improve the well-being and quality of life of all Filipinos.”

The report highlights that the expansion of secondary education, mobility to better-paying jobs, access to basic services, and government social assistance have started to reduce inequality since the mid-2000s. However, unequal opportunities, slow access to tertiary education among low-income households, inequality in returns to college education, and social norms putting the heavier burden of childcare on women has slowed down the narrowing of inequality in the Philippines.

Despite the strong recovery of growth and the labor market, COVID-19 pandemic has partly reversed decades-long gains in reducing poverty and inequality in the Philippines. It halted economic growth momentum in 2020, and unemployment shot up in industries that require in-person work. In 2021, the national poverty rate rose to 18.1 percent despite government assistance.

Recovery in the Philippines is uneven across the income distribution and the poorest who suffered the most from COVID have yet to fully recover their incomes. With food prices going up, many families coped by reducing their consumption, including eating less. These coping strategies can have serious consequences on the health and nutrition of children in these vulnerable households.

The report says that inequality starts even before birth and is perpetuated over the life cycle. It starts with maternal nutrition and health during pregnancy. Differences continue into childhood, where disparities in access to health care, proper nutrition, safe drinking water, sanitation, and quality education determine the extent to which a child’s human capital develops.

“Inequality shapes outcomes later in life, such as employment opportunities and income, which in turn influence how much support adult Filipinos are able to provide for their children to help maximize their potential,” said Nadia Belhaj Hassine Belghith, Senior Economist with the East Asia Poverty Global Practice covering Thailand and the Philippines who led the study.

The report says that policy priorities to reduce inequality in the Philippines can be structured around three themes, including healing the pandemic’s scars and building resilience, setting the stage for a vibrant and inclusive recovery, and promoting greater equality of opportunity.

Healing pandemic’s scars will require promoting greater vaccine booster uptake, overcoming the learning loss due to COVID-19, strengthening social assistance, unemployment insurance programs for the informal sector, and taming inflation.

Setting the stage for vibrant recovery entails reskilling of workers, promoting entrepreneurship, increasing the participation of women in the labor force, and raising the productivity of agriculture.

Promoting greater equality of opportunity entails increasing access to quality health care, increasing equality of opportunity in education, and improving access to quality housing, among others. Equality of opportunity needs to target the lagging regions and other people disadvantaged in accessing these because of the circumstances of their birth.

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essay about the poverty in the philippines

What Has Really Happened to Poverty in the Philippines?: New Measures Evidence and Policy Implications

July 31, 2013.

Poverty is increasingly recognized as a multidimensional phenomenon, yet its assessment continues to be conducted almost exclusively in terms of income (or expenditure). This practice is prevalent partly because low household incomes are casually associated with other deprivation indicators, such as low levels of literacy and life expectancy.

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The Root Causes of Poverty in the Philippines

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  • Topic: Homelessness , Income Inequality , Unemployment

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