http://www.adb.

org/publications/poverty-philippines-causes-constraints-and-opportunities
Poverty and inequality in the Philippines remains a challenge. In the past four decades, the
proportion of households living below the official poverty line has declined slowly and unevenly
and poverty reduction has been much slow.
Economic growth has gone through boom and bust cycles, and recent episodes of moderate
economic expansion have had limited impact on the poor. Great inequality across income
brackets, regions, and sectors, as well as unmanaged population growth, are considered some of
the key factors constraining poverty reduction efforts.
Causes of Poverty
The main causes of poverty in the country include the following:

low to moderate economic growth for the past 40 years;

low growth elasticity of poverty reduction;
weakness in employment generation and the quality of jobs generated;
failure to fully develop the agriculture sector;
high inflation during crisis periods;
high levels of population growth;
high and persistent levels of inequality (incomes and assets), which dampen the positive
impacts of economic expansion; and
recurrent shocks and exposure to risks such as economic crisis, conflicts, natural
disasters,and "environmental poverty."

Key Findings
The report's key findings include the following:

Economic growth did not translate into poverty reduction in recent years;
Poverty levels vary greatly by regions;
Poverty remains a mainly rural phenomenon though urban poverty is on the rise;
Poverty levels are strongly linked to educational attainment;
The poor have large families, with six or more members;
Many Filipino households remain vulnerable to shocks and risks;
Governance and institutional constraints remain in the poverty response;
There is weak local government capacity for implementing poverty reduction programs;
Deficient targeting in various poverty programs;
There are serious resource gaps for poverty reduction and the attainment of the MDGs by
2015;
Multidimensional responses to poverty reduction are needed; and
Further research on chronic poverty is needed.

The report comprehensively analyzes the causes of poverty and recommends ways to accelerate
poverty reduction and achieve more inclusive growth. In the immediate and short term there is a
need to enhance government's poverty reduction strategy and involve key sectors for a collective
and coordinated response to the problem. In the medium and long term the government should
continue to pursue key economic reforms for sustained and inclusive growth.
http://www.philstar.com/headlines/2015/03/06/1430828/philippine-poverty-incidence-rises-firsthalf-2014
Philippine poverty incidence rises in first half of 2014
(philstar.com) | Updated March 6, 2015 - 8:00pm
MANILA, Philippines (Xinhua) - Fast-rising food prices and the devastating effects of
Super Typhoon Haiyan (local name Yolanda) caused an increase in poverty incidence
in the Philippines in the first half of 2014, said local authorities today.
The poverty incidence among Filipino individuals and among families increased to
25.8 percent and 20 percent respectively during the period, according to the
National Economic and Development Authority.
Economic Planning Secretary, Arsenio M. Balisacan, said per capita income in the
first half of 2014 rose by 6.4 percent compared to the same period in 2013. Per
capita income increased by 7.3 percent in the lowest 30 percent of income-earners.
"Per capita income data in 2014 show that economic growth has benefited the lower
income groups, including the poor. This means that the twin strategies of
encouraging investments and production alongside the implementation of a largescale income redistribution program have worked,"said Balisacan.
However, the country's inflation rate hovered near the higher- end of the inflation
target in the first half of 2014. The consumer price index for food went up to 6.5
percent and 2.7 percent for the non-food items in the same period.
These eroded the growth in per capita income of Filipinos.
Rice prices posted a double-digit growth of 11.9 percent in the first semester of
2014 from only 1.7 percent in the same period in 2013, on the back of a tight supply
given lean harvests coupled with less imports.
Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1
Higher food prices resulted in a huge increase in poverty thresholds. Food poverty
threshold rose by 9.5 percent while overall poverty threshold increased by 9.4
percent year-on-year in the first six months of 2014. Ten out of the 17 regions
experienced double-digit increases in their poverty thresholds.
Balisacan also stressed the need of updating budget components of government
poverty reduction programs to balance the movement of prices and incomes of the
poor. "The government's social development programs may have provided
additional support to temper the rise in poverty but could have contributed more

towards reducing poverty had the value of the grants increased with inflation,"he
said.

https://www.usaid.gov/frontiers/2014/publication/section-1-extreme-poverty-philippines
Extreme Poverty in the Philippines
Gil Dy-Liacco, Development Assistance Specialist in USAID/Philippines Office of Program
Resources Management
How would you describe extreme poverty in the Philippines?
In 2012, extreme poverty in the Philippines was estimated at 19.2 percent of the population, or
about 18.4 million people, based on the international poverty line of $1.25 per day. Most of the
poor in the Philippines live in rural areas and work in the agriculture sector, mainly in farming
and fishing. Urban poverty, however, has been increasing in recent years. Migrants without jobs
or with low-paying jobs are unable to afford decent housing. As a result, Philippine cities have
high proportions of informal settlers who are among the poorest of the poor.
Moreover, poverty is severe in parts of the country with high levels of conflict. The Philippines
10 poorest provinces are considered either conflict-affected or vulnerable to conflict.
The poor in the Philippines have families of six or more members, with greater numbers of
younger and older dependents. In the majority of poor families, the head of household has only
an elementary education or below. These families have few or no assets and minimal access to
electricity, water sources and toilet facilities. They also have limited access to health and
education services.
Among Philippine citizens, the poor are most vulnerable to financial and price shocks and
natural disasters. Often their efforts to cope with these shocks and make up for lost livelihoods
and income result in deeper levels of indebtedness.
What do you see as some of the biggest challenges to ending extreme poverty in the Philippines?
What have been the most promising efforts so far in reducing extreme poverty?
In the Philippines, the key challenges to ending extreme poverty are the same as the countrys
development challenges: weak governance and a lack of fiscal space, which reflect pervasive
corruption, elite capture and state capture; inadequate education and health services; the
persistence of armed conflict in the southern island of Mindanao; inadequate natural resources
management; and increased frequency and intensity of natural disasters.
The countrys long history of policy distortions has led to patterns of growth that have failed to
provide good jobs to the majority of Filipinos. Cities in the Philippines have not been able to
keep pace with the explosive growth of urban populations, as evidenced in infrastructure and
housing deficiencies, traffic congestion and environmental pollution. The private sectors

reluctance to invest and create more and better quality jobs reflects the countrys weak
investment climate for firms of all sizes.
The Government of the Philippines currently provides targeted direct assistance to the extremely
poor through social protection programs. Through a conditional cash transfer program, extremely
poor families receive cash assistance when they fulfill requirements for free, governmentprovided child immunizations and enroll their children in school. In order to fund and implement
its universal health program and improve access to basic education, the Government of the
Philippines is aggressively accelerating revenue collection, improving public expenditure
management and addressing constraints to effective local governance.
At the same time, the Government of the Philippines recognizes that ending extreme poverty
requires strategies and programs aimed at sustaining inclusive, resilient growth. USAID, through
the U.S.-Philippines Partnership for Growth, is helping the Government of the Philippines
address binding constraints to inclusive growth by improving the quality of policies, regulations
and their implementation; strengthening rule-of-law and anti-corruption measures; improving
fiscal performance; and promoting human capacity development. USAID supports efforts to help
the secondtier cities outside of Metro Manila to become effective engines of growth in their
localities and surrounding areas.
USAID is fostering peace and stability in conflict-affected areas of Mindanao, where many of the
countrys poor reside. USAID is enhancing environmental resilience through programs that
mitigate the impact of natural disasters, so as to minimize the impact on the poor, who are
disproportionately affected by these disasters. USAID is also implementing programs that
improve access to quality education and health services. Finally, through humanitarian assistance
work in disaster- and conflict-affected areas, USAID is supporting efforts to restore immediate
accessespecially for the poorto basic services.
Data Sources and References:
Asian Development Bank Poverty in the Philippines: Causes, Constraints and Opportunities,
December 2009
National Economic and Development Authority Mid-Term Update of the Philippine
Development Plan, April 2014
Philippine Statistics Authority National Statistical Coordination Board
Social Weather Stations
USAID/Philippines Country Development Cooperation Strategy, 2012-2016
World Bank: Country Partnership Strategy for the Republic of the Philippines for the Period FY
2015-2018, May 2014

The views expressed in this Q&A are those of the interviewee and do not necessarily represent
the views of the United States Agency for International Development or the United States
Government.