NEDA: Government has good chance of cutting poverty rate to 11%

THE National Economic and Development Authority (Neda) on Monday expressed confidence that the Duterte administration will be able to halve the number of poor Filipinos by 2022, particularly if social programs are better targeted.

If the administration achieves its goal of reducing poverty rate to 11 percent by 2022, the Neda said this will be the first time in the country’s history that the figure will be cut in six years.

The Development Budget Coordination Committee (DBCC) recently revised the poverty rate target to a more ambitious rate of 11 percent from 14 percent by 2022.

“This would be the first time in history that the poverty rate will be halved in just six years, a significant contribution and achievement of this administration,” said Socioeconomic Planning Secretary Ernesto M. Pernia.

Pernia noted that the country’s poverty incidence dropped to 16.6 percent in 2018, from 23.3 percent in 2015. This means that the reduction averaged 2.23 percentage points per year, making the previous target achievable by mid-2022.

The Neda chief said the decline was also broad-based, as all regions, except the Autonomous Region in Muslim Mindanao (ARMM), recorded a decline in poverty incidence among population.

Former Socioeconomic Planning Secretary Romulo L. Neri told the BusinessMirror that the Neda’s data indicate that halving poverty by 2022 is feasible. Neri said growing the economy by 7 percent annually will allow the government to hit this goal.

However, University of Asia and the Pacific School of Economics Dean Cid Terosa said halving poverty by 2022 may be a tall order for the government.

Tall order

“It will be a challenge to halve the country’s poverty rate to 11 percent by 2022 simply because it will require the economy to grow consistently by about 7 or more percent in the next two years. I believe, however, that the poverty rate can go down to about 15 or 16 percent by 2022,” said Terosa.

While achieving the target is statistically probable, University of the Philippines Diliman School of Economics Associate Professor Toby Melissa Monsod told the BusinessMirror that the government must look beyond income poverty.

Monsod said income poverty is “a very narrow indicator of welfare” and must also be viewed together with health and nutrition indicators, which have worsened in the past 25 years.

“Health and nutrition have not improved and have in fact gotten worse, [such as] maternal mortality, child stunting, and now diseases that were supposed to have been controlled or eradicated,” she said.

“The narrow focus on income poverty is very misleading. We should be concerned for human development outcomes and not just incomes per se,” she added.

Monsod also stressed the difficulty of reconciling the fact that while health and nutrition outcomes have worsened, the Philippines is still aiming to become an upper middle income country.

Action for Economic Reforms (AER) Coordinator Filomeno Sta. Ana III and said halving poverty to 11 percent is going to be a “fighting target.”

“It’s good to aim high but at the same time recognize the headwinds. Tailwind though is the growth momentum, but it can be dissipated by undisciplined populism and threat of contract/policy reversals,” Sta. Ana said.

Doing the work

Pernia, himself, admitted that halving poverty to 11 percent by 2022 will not be “a walk in the park.” The first order of battle, he said, is to sustain efforts that helped bring down the country’s poverty rate to 16.6 percent in 2018.

He said more jobs should be created for the poor, and that there is a need to increase incomes to lift more Filipinos out of poverty.

Pernia said the implementation of social programs—like conditional and unconditional, cash transfers and pensions; population and family planning program, and less extreme weather conditions—will help reduce poverty.

“Inclusive, job-generating growth and better-targeted programs helped increase the incomes of the poor. For those in the bottom 30 percent of the population, mean per-capita income increased by 31.9 percent, outpacing the income growth of those in the top 20 percent of households,” Pernia said.

“The government must continue to generate more quality jobs, increase the income of the poor, reduce the vulnerability of the poor through social programs and financial literacy, and the intensified implementation of the National Program on Population and Family Planning [NPPFP],” the Cabinet official said.

He emphasized the need for the NPPFP to be fully funded for the next three years to help further strengthen and broaden its implementation at the local level.

In particular, this will help boost the implementation of sexuality education program in all schools to reduce teenage pregnancies.

Pernia also said it is important to have programs that will encourage savings to increase people’s resilience to disasters, and protection against unexpected income losses or expenses.

“We must remember that we are aiming for comfortable and secure lives for all, so we must be more ambitious in terms of poverty targets,” he added.

“We must unite and work even harder in the next three years as we aim to lift even more Filipinos out of poverty, and make good of our promise to leave no one behind,” Pernia said.

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