Poorest Filipinos would need more support in order to get out of poverty, especially after the pandemic significantly affected their lives and livelihoods, according to the Asian Development Bank (ADB).
In the Key Indicators for Asia and the Pacific 2022 report, ADB said the poorest 10 percent of Filipinos experienced a 21.1 percent decline in consumption. This is the steepest drop in consumption among all income classes.
The pandemic caused a 13.6 percent contraction in household consumption per capita nationwide. All income classes saw a decline in per capita consumption with the top 10 percent of the income decile experiencing a 14.8 percent contraction in consumption.
“The poor and the vulnerable have been hit hardest by Covid-19, and while economies are recovering, many people may find that getting out of poverty is even more difficult than before,” ADB Chief Economist Albert Park said in a statement.
“Governments in the region should focus on resilience, innovation, and inclusiveness to provide more balanced economic opportunities and greater social mobility for everyone,” he added.
ADB said the region’s fight against poverty has been derailed by at least two years and many in the region will likely find it harder to achieve upward social mobility.
The Manila-based multilateral development bank said social mobility or the movement from one socioeconomic status to another is an important consideration in looking at inequalities between the rich and poor members of society.
“Temporary increases in the prevalence of poverty due to economic shocks may merit less policy or structural intervention in places that enjoy high social mobility [where the poor may have good chances of getting out of poverty eventually],” ADB said in the report.
“On the other hand, increased poverty levels in places with low social mobility [where poverty may be generational and due to factors beyond a person’s control] could be more problematic and require strong policy intervention,” it added.
Despite this, ADB said the region’s economic growth this year is expected to reduce extreme poverty—defined as living off less than $1.90 a day—to a level that would have been achieved in 2020 had the pandemic not happened.
By 2030, ADB said, the prevalence of extreme poverty in the region is expected to drop below 1 percent. At the same time, about 25 percent of the population is projected to achieve at least middle-class status, defined as having income or consumption of $15 or more a day, adjusted for purchasing power parity.
“However, this outlook is threatened by differences in social mobility as well as other uncertainties. Developing Asia faces the potential for stagflation, ongoing conflicts involving key global actors, increased food insecurity, and energy price shocks,” ADB said in the statement.
ADB said the pandemic significantly affected tourism, transportation, information and communications technology, and energy. Efforts to help these sectors recover will be important in helping more people in the region get out of poverty.