Pandemic sets back PHL’s targets to wipe out poverty

THE goal of eradicating both subsistence and income poverty may not be achieved due to the extent of the pandemic’s impact on the economy, according to the National Economic and Development Authority (Neda).

Government targets to eradicate subsistence poverty by 2030 and bring down income poverty to zero by 2040. Subsistence incidence in poverty is the proportion of the population who could not even provide for their basic food needs, while the income poverty rate includes those who could not provide for their basic food and non-food needs.

However, Neda Undersecretary for Policy and Planning Rosemarie G. Edillon told BusinessMirror at the sidelines of the Philippine Economic Briefing on Tuesday that the pandemic has cost the Philippines at least two years worth of gains in poverty reduction.

“We need to catch up. We’re coming up with a catch-up plan for growth and poverty,” Edillon said. “If we met the  (poverty incidence of) 13 percent to 15 percent this year, we could have easily met our targets because we want zero (poverty incidence). We were expecting (before the pandemic that) by 2030, we would be able to bring down to zero subsistence poverty because we already hit single digit in 2018.”

Based on the World Bank’s report released on Tuesday, poverty incidence is also expected to increase in light of the increase in commodity prices this year.

A simulation by the Washington-based lender showed that if cereal prices rise by 10 percent in the Philippines, this would be expected to increase the $3.20/day poverty rate by 1 percentage point or about 1.1 million additional poor.

If the low-case GDP growth scenario, pegged at 4.9 percent for the Philippines, were to materialize this year, some 6 million more people would remain trapped in poverty in 2022 at the $5.50/day poverty line.

The World Bank estimates showed that using the International Poverty Rate of $1.9 a day in 2011, poverty in the Philippines would average 2.6 percent this year; 2.1 percent in 2023; and 1.7 percent in 2024.

Using the $3.20/day poverty rate, or the lower middle-income poverty rate, would lead poverty to average 16.3 percent in 2022; 14.6 percent in 2023; and 12.9 percent in 2024.

Based on the Upper middle-income poverty rate of $5.5 per day, poverty incidence in the Philippines would average 46 percent in 2022; 43.4 percent in 2023; and 40.9 percent in 2024.

“Recent food price increases in the region, reinforced by food and fuel price rises related to the Ukraine-Russia war, could threaten expected progress in poverty reduction in 2022, as poor households tend to spend substantial shares of their incomes on food and energy,” said the World Bank report.

The latest official data from the Philippine Statistics Authority (PSA) showed poverty incidence increased to 23.7 percent in the first semester of 2021 from the 21.1 percent in the first semester of 2018.

This translates to 26.14 million Filipinos who lived below the poverty threshold—estimated at P12,082, on the average, for a family of five per month—in the first semester of 2021.

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