DUE to structural problems in the economy, the global economic crisis and the recent typhoons, at least 1.4 million Filipinos will be thrust into poverty by 2010, according to the latest Philippine Quarterly Update (PQU) released by the World Bank on Wednesday.

The World Bank said that despite its upward revision of the country’s gross domestic product (GDP) growth in 2009 and 2010 and the efforts exerted by the national government to eradicate poverty, this will not be enough to prevent at least 1.4 million Filipinos from being thrust into poverty next year.

The bank said the country’s poverty rate is estimated to be higher compared with a scenario without any global crisis. The bank said the country’s poverty rate is seen to be 0.9 percentage points and 1.5 percentage points higher in 2009 and 2010, respectively.

“Despite [the] improvements and the strong fiscal stimulus undertaken by the government, it is estimated that the global economic recession will throw 1.4 million Filipinos into poverty by 2010 compared to a no-crisis situation. Damages and losses inflicted by typhoons Ondoy and Pepeng are estimated to further worsen poverty incidence in the Philippines,” the bank said in the report.

The World Bank said the effect of the crisis on urban areas, the manufacturing and services sectors, as well as for female-led households, will be “particularly high.” This will be largely due to reduced employment and labor earnings that will slow down economic activity in the country.

Further, the massive flooding and landslides caused by typhoons Ondoy and Pepeng affected many families through loss of life and livelihoods. With the loss of jobs, the bank expects poverty and hunger incidence to increase.

Typhoon Ondoy alone is estimated to have pushed 150,000 to 250,000 near-poor into poverty, which could increase the national poverty incidence by 0.1 to 0.3 percentage points. The typhoon also dragged a considerable number of urban poor further into poverty.

As of October 20,  the bank cited that the flood left at least 902 people dead and affected about 8.7 million people; around 1.5 million of this number were displaced either in camps or forced to seek temporary residence from relatives.

“National poverty incidence, based on preliminary findings, could have increased by 0.1 to 0.3 percentage points as a result of Ondoy—the latest official poverty rate is 32.9 percent in 2006. A similar order of magnitude is tentatively expected from Pepeng,” the  report stated.

“The poverty gap and poverty severity area also expected to have widened noticeably,” the bank added. 

Meanwhile, the bank cited the increase in the number of poor Filipinos is due to noninclusive growth. World Bank Philippines lead economist Ulrich Lachler said that while the country enjoyed high growth rates before the crisis, most notably is the 7.2-percent GDP growth in 2007, poverty increased to 4.7 million families or 27.6 million Filipinos living below the poverty line in 2006.

Lachler said one of the reasons poverty increased over a supposedly high-growth period was that growth during this period may have been more modest compared with what was declared in the National Income Accounts (NIA).

This does not, however, involve reasons of sanitizing official data but of more technical in nature. He said  these technical issues with the NIA are not unique to the Philippines. Lachler said  the bank observed this in other countries.

“It turns out that the divergence between survey- and NIA-based growth data is not unique to the Philippines,” the bank said in the East Asia Update.

“NIA estimates are typically, though not always, larger than survey-based estimates, and there is a tendency for the National Accounts-based estimates to grow more rapidly than the survey-based estimates,” the bank added.