The Philippines is an archipelagic country in Southeast Asia, consisting of more than 7,000 islands. The South China Sea bounds it to the west, the Philippine Sea to the east and the Celebes Sea to the south. The country has made gains in poverty reduction but further reduction is necessary. The future of poverty in the Philippines rests on the country’s economic development and the work of government initiatives. Here is everything you need to know about poverty in the Philippines.

The Extent of Poverty in the Philippines

Poverty in the Philippines declined to 22.4% in 2023, down 1.3% from the same period in 2021. However, despite this decrease, the current state of poverty and inequality is startling. The poverty incidence was 22.4% in the first semester of 2023, affecting approximately 25.24 million Filipinos. The poverty incidence refers to the proportion of Filipinos whose per capita income is insufficient to meet their basic needs. On average, a family of five needs at least PhP 13,797 monthly to cover their basic needs, according to the Philippine News Agency. Additionally, the subsistence incidence or the proportion of Filipinos whose income is insufficient to buy basic food needs stood at 8.7%, meaning approximately 9.79 million Filipinos are unable to fulfil basic food needs.

These statistics demonstrate the extent of poverty in the Philippines and provoke the question of why the Philippines continues to struggle from poverty despite its growing economy. The Philippines struggles with a huge disparity in wealth equality. According to the World Bank, the Philippines holds one of the highest Gini Coefficients in the East Asian and Pacific region, sitting at 40.7% as of 2021. This means that, despite economic improvements, those most susceptible to poverty may not see the benefits of economic growth.

The Affected Population

Poverty affects the unemployed and underemployed and those who lack education most in the Philippines as they are unable to find opportunities or jobs which pay a sufficient wage. Environmental instability is also an issue, in regions most vulnerable to natural disasters schools have to shut down, disrupting education. In April 2024, hundreds of schools in the Philippines had to close due to extreme heat, an issue which annually rising global temperatures will exacerbate.

The World Bank estimates that 60% of the land in the Philippines is vulnerable to multiple natural hazards. This causes severe damage to homes and transport infrastructure, interrupting business and education and costing billions to repair. This has been an issue in Mindanao recently, where flooding caused more than 411,000 people to flee.

The State of the Economy

Despite the pessimism surrounding poverty in the Philippines, there is reason for optimism. The Philippine economy grew by 5.5% in 2023, making it one of the best-performing economies in Asia, according to the Philippine News Agency, but high inflation has offset the benefits of income growth on poverty reduction. To overcome inflation, growth must remain consistently high. Currently, economic growth for 2024-2025 could be at an average of 5.8% if growth in the domestic market is achieved. The World Bank expects this domestic market to grow due to the thriving tourism sector and the information technology-business process outsourcing industry. This indicates a bright future for the Philippine economy. For the poorest Filipinos to benefit from the projected growth in 2024, income gains from economic growth must be guided towards reducing inequality.

Positive Progress in Poverty Alleviation

The reduced poverty rate from 2021 to 2023 is a move in the right direction. The government achieved this through initiatives such as the fuel subsidy and the one-time rice allowance, according to the Philippine News Agency. However, greater income equality must still be strived for if President Marcos wants to reach his goal of a single-digit poverty rate by 2028. The Philippine Development Plan of 2023-2028 is one initiative which can help achieve this goal. This plan aims to bring economic and social transformation by reinvigorating job creation and accelerating poverty reduction. It aims to be the mechanism of implementation of the Sustainable Development Goals (SDGs) and includes programmes to improve education and to upskill the workforce. If The Philippines achieves this plan, it can make further poverty reductions by addressing the key areas where inequality thrives.

To relieve the problem of environmental instability, the government is building new infrastructure under The Metro Manila Flood Management Project. This benefits the Metropolitan Manila area but fails to help other areas susceptible to flooding. This only furthers the issue of inequality, benefiting the city of Manila instead of reaching more deprived areas. More deprived areas struggle to recover from natural hazards, weakening their ability to become more prosperous and resistant to annually occurring hazards. Last year, Bulacan was placed under a state of calamity due to the damage that typhoons and subsequent flooding caused.

Looking Ahead

Despite projected economic growth and current initiatives being in place to address poverty, there remains a significant proportion of Filipinos who are vulnerable to poverty. While there is room for improvement, the country has great potential to reduce poverty further. The progress made in 2023 and the current economic growth projections are a testament to this. The persistence of inequality requires greater attention from the government in addressing areas of education and environmental relief. Initiatives to help those most vulnerable to poverty must be used to ensure more people can benefit from the coming economic growth. In this way, the Philippines can continue to progress in reducing poverty.

– Lauren Alkhalil

Lauren is based in London, UK and focuses on Good News and Technology for The Borgen Project

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