PH to miss single-digit poverty rate goal
The Philippines is unlikely to meet its goal of reducing poverty to single-digit levels by the end of the Marcos administration, the World Bank said, warning that millions of Filipinos remain vulnerable to economic shocks despite years of progress in poverty reduction.
In its latest Poverty and Equity Assessment, the Washington-based lender projected the poverty rate to decline to 12.3 percent in 2028 from 15.5 percent in 2023.
If realized, this would still fall short of the government’s target of bringing poverty down to between 8.8 percent and 9 percent by the end of the President’s term.
“Given the high concentration of people just above the poverty line and the country’s high prevalence of shocks, progress can easily be reversed,” the World Bank said.
The lender also warned that around 2 million Filipinos could fall into poverty as a result of the fallout from the Middle East war, although World Bank senior economist Liliana Sousa said the estimate assumes no mitigating government interventions.
“What our analysis shows is really it’s the poor and vulnerable that are getting hit hardest with these price shocks because they don’t have that cushion,” Sousa said during a briefing.
According to the report, 28 percent of Filipinos remain vulnerable to falling back into poverty, while only about 24 percent belong to the secure middle class and high-income group.
Stuck
It added that many Filipinos who have escaped poverty remain stuck in an “emerging middle class” that is no longer vulnerable but has yet to achieve economic security.
The World Bank attributed this largely to low incomes and weak job prospects, noting that only about one in 10 workers who did not complete secondary education has a formal job with benefits.
Gaps in insurance and social protection systems also leave many households exposed to shocks, particularly in a country where 61 percent of the population faces a high risk from climate-related hazards.
The report likewise cited uneven public services and limited local government capacity, saying that only about 65 percent of local capital investment budgets are utilized.
“Despite the notable gains made in reducing poverty and inequality, the country remains far from achieving the broad, resilient middle class envisaged by Ambisyon Natin 2040,” the World Bank said.
“Economic security remains elusive for most Filipinos. As the Philippines approaches upper middle-income status, it faces the twin challenge of accelerating poverty reduction while building a robust middle class,” it added.
Twin challenge
Under the government’s Ambisyon Natin 2040 vision, the Philippines aims to virtually eradicate poverty and become a predominantly middle-class society.
The World Bank said this goal remains achievable, but only under a reform agenda centered on faster growth, job creation and stronger social protection.
Under a business-as-usual scenario, the poverty rate is projected to decline to 11.1 percent by 2030 and 6 percent by 2040. An equity-focused reform scenario would lower poverty further to 9.7 percent and 4.8 percent respectively.
Meanwhile, a combined growth, jobs and equity reform package could reduce poverty to 7.2 percent by 2030 and just 2.9 percent by 2040.
“By combining policies to unleash growth and job creation with a focused equity and resilience package, the Philippines can virtually eliminate poverty,” the World Bank said.
“Expand the secure middle class to encompass a majority of the population, keep inequality in check and build a more shock-resilient society in the face of climate-related and other risks,” it added.
