Poverty in the Philippines: Causes, Constraints and Opportunities

Publication | December 2009

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.

Contents 

  • List of Tables, Figures, Boxes and Appendixes
  • Acknowledgments
  • Abbreviations
  • Part 1 Executive Summary
  • Part 2 Introduction
  • Part 3 Poverty Profile
  • Part 4 Causes of Poverty
  • Part 5 Impacts of Poverty on Economic Growth and Development
  • Part 6 Institutions and Governance in the Poverty Response
  • Part 7 Summary of Key Findings and Recommendations
  • References
  • Appendixes