Community Developments
The outreach blog : from the field, the state of poverty in the philippines: what are the causes.
The Philippines and its roughly 117,000,000 people have struggled with income inequality for generations. Even as infrastructure and opportunity has improved in highly populated areas in recent decades, poverty in the Philippines, particularly for people living in remote areas, remains a serious issue.
In this blog post, you’ll learn about the complex issue of chronic poverty in the Philippines, its causes, and its impact on families. Additionally, you’ll see how Outreach International is working to alleviate poverty in this Southeast Asian nation.
Decoding Poverty: A Deep Dive into the Statistics
According to the World Bank , between 1985 and 2018, the poverty rate in the Philippines declined by two-thirds, thanks to economic growth initiatives and investment in infrastructure, including education. However, the improvements were largely focused in the most populated areas, where the most opportunities already existed. According to the Asian Development Bank , the top one percent of earners have benefitted the most, capturing 17 percent of the national income, while only 14 percent of national income is obtained by the lowest-earning 50 percent of the population.
The Philippines’ income inequality stems from several structural factors. Higher education and job skills development remain out of reach for many. Unequal access to college, and social norms that leave women at a disadvantage, also contribute to persistent inequality. And the geography of this archipelago nation makes the issue even more difficult to solve, as opportunities and natural resources are unevenly distributed.
Understanding the Impact of Family Poverty
Family poverty is not just about financial struggle. It affects every aspect of a household’s well-being. Children who live in poverty are less likely to enroll in school and reach age-appropriate grade levels because their time is needed to help the family strive to meet their basic daily subsistence needs. This stifles their access to higher education and the future opportunities it would bring, limiting earning potential, the potential economic growth of families, and the possibility of community development.
Managing Resources: Addressing Poverty in High Population Areas
Population density has a significant impact on poverty in the Philippines. High-population areas often struggle to manage limited natural and government resources, which negatively impacts quality of life. And a lack of job opportunities in densely populated areas contributes to poverty rates. These challenges trickle into remote areas, making it even more difficult for rural communities and marginalized people to break their own unending cycle of poverty .
Living Conditions and Resource Challenges
Living conditions in densely populated areas of the Philippines are affected by resource scarcity and inadequate government support systems. Access to basic necessities like electricity, safe drinking water, and quality education remains uneven. This scarcity not only limits the potential for development across the nation but also perpetuates inequality. As a result, impoverished communities face daily struggles, making it all the more challenging to break free from the cycle of poverty.
The Pandemic’s Impact: A Crisis Amplifying Poverty
The COVID-19 pandemic had a profound impact on poverty in the Philippines. In 2020, the pandemic halted economic growth, leading to even higher unemployment rates. As this trend continued into 2021, poverty rates rose to 18.1 percent (World Bank). This amounts to just under 20 million people. And though the economy continues to recover, this recovery is uneven, with the poorest households benefiting the least. As improvements are bringing many areas back to normal, communities in many remote areas still struggle to bring their economies back to even just the already challenging pre-pandemic levels.
One constant struggle for families living in poverty is food insecurity. And according to sources such as the National Library of Medicine , this became even more significant during the pandemic. Almost two-thirds (61.2%) of households experienced moderate to severe food insecurity during the many months of quarantine. And with rising food prices and limited natural resources, vulnerable households often had to limit their food intake. This caused a lack of proper nutrition, particularly for children. Outreach International has implemented an effective method of combating food insecurity for even the most impoverished families. Our partners in OPI have helped community-led organizations develop rice loans . These are low-interest loans of rice or the funds to buy it. And because the communities manage these loans themselves, borrowers can avoid predatory outside lending institutions and can deal with people they know and trust.
Initiatives That Changed the Reality
In response to the challenges posed by the pandemic, both the Philippine government and organizations like Outreach International have implemented various initiatives to alleviate poverty and its effects. Some organizations have provided health services and relief assistance to affected communities. Such initiatives are essential in mitigating the immediate impact of the crisis and helping vulnerable populations in the short term.
But Outreach International also focuses on more long-term and sustainable initiatives that can forever break the cycle of poverty . Our methodology of community-led development allows people who live in chronic poverty to learn that they have the power within themselves to improve their lives permanently. Our partners in the Philippines, Outreach Philippines Incorporated (OPI), work with leaders in communities to identify their own unique poverty-related issues, and then mobilize to solve them. They learn how to develop networks with government agencies and NGOs that are able to provide resources. And they learn how to set ever-increasing goals of improvement, leading to continuous development that is sustainable for generations.
Join the Cause: How You Can Help
You can choose to play a role in alleviating poverty in the Philippines. And there are so many ways to help , from donating to Outreach International to fundraising to volunteering . By working together, we can collectively make a difference in the lives of those affected by poverty in the Philippines.
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- The Philippines has made significant progress in reducing poverty, but income inequality has only recently begun to fall. Thanks to high growth rates and structural transformation, between 1985 and 2018 poverty fell by two-thirds. However, income inequality did not begin to decline until 2012. It is still high: the top 1 percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent.
- Several structural factors contribute to the persistence of inequality. The expansion of secondary education and mobility to better-paying jobs, citizen ownership of more assets and access to basic services, and government social assistance have helped reduce inequality since the mid-2000s. However, unequal opportunities, lack of access to tertiary education and a scarcity of skills, coupled with inequality in returns to college education, gendered social norms and childcare, and spatial gaps, sustain inequality.
- Inequality of opportunity limits the potential for upward mobility. While there has been considerable progress in expanding access to basic services such as electricity, safe drinking water, and school enrollment, large disparities limit the development of human capital. Inequality of opportunity and low intergenerational mobility waste human potential, resulting in a lack of innovation and a misallocation of human capital in the economy.
- While schooling is widely accessible, its quality and attainment vary by income group. Children from poorer households are less likely to be enrolled and, if they are, to reach age-appropriate grade levels. That means they are less likely to reach tertiary education, which severely constrains their earning potential and their prospects for upward mobility. With the relatively low share of workers with tertiary education, the premium for college education has remained high. Additionally, tertiary education tends to deliver much higher returns for rich than poor households, possibly due to differences in school quality or f ields of study and employment.
- COVID-19 partly reversed decades-long gains in reducing poverty and inequality. The pandemic halted economic growth momentum in 2020, and unemployment shot up in industries that require inperson work. In 2021, poverty rose to 18.1 percent despite large government assistance. The economy has begun to rebound but signs are emerging that the recovery will be uneven. Prolonged loss of income has taken a heavy toll on the poorest households. With food prices going up and a reliance on adverse coping strategies, among them eating less, there is a risk of serious consequences for the health and nutrition of children in vulnerable households.
- The shock from the COVID-19 pandemic led to a shift in the workforce to less productive sectors and occupations. Employment in wage work has notably decreased and employment in agriculture has risen. These trends have been concentrated among youth and the least educated, which suggests an uneven recovery and widening income inequality.
- The pandemic is likely to result in long-term scarring of human capital development. Over half of households estimate that their children learned from remote learning less than half what they would have learned from face-to-face schooling. The proportion increases to 68 percent in poor households. Extended distance learning is expected to have reduced the learning-adjusted years of schooling by over a full year. Learning loss, combined with the de-skilling associated with prolonged unemployment, could lead to sizable future earnings losses.
- Job polarization could further increase as the nature of work changes. Job polarization among wage workers emerged between 2016 and 2021: employment in middle-skilled occupations went down and employment in both low-skilled and high-skilled occupations went up. This pattern may rise with the transformation of jobs post-COVID-19 and could increase prevailing disparities in incomes.
- Policy can reduce inequality by supporting employment and workers, improving education access and quality, promoting inclusive rural development, strengthening social protection mechanisms, and addressing inequality of opportunity.
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Poverty, Government and Unequal Distribution of Wealth in Philippines Essay
Poverty data gathering tools, etiologies of poverty, programs to alleviate poverty.
Filipinos are in grave situations of poverty as of now. According to UNDP statistic last 2004; the numerical rate 36.8% is the poverty level of the entire Filipino population. Crude estimation of this count into raw rate is 70 million Filipinos are below poverty line. However, statistics do not reveal the complex nature of poverty; indeed, it is a mistake to assume that poverty can be measured in monetary definitions (Eadie 35).
The Philippines provides a concrete example of GDP growth that did not reduce poverty, although the economy recorded growth of more than 4% in 3 of the past 4 years. The 2003 FIES illustrates average family incomes to have increased by only 2.5% over the 2000 level, while the CPI shows an inflation rate of 13.9%. Judging all these data obtained, it is therefore almost certain that the poverty level has increased during this period. It most likely has increased by a greater level than from 1997–2000, when average family incomes has grown by 18%, inflation has been 22%, and the poverty incidence of the population has increased by 1% (Poverty in the Philippines 2). The author of the book Poverty And The Critical Security Agenda , Eadie (33), added:
Quantitative analyses of poverty have become more sophisticated over the years to be sure, yet remain problematic and in certain ways rooted in assumptions of rational choice behavior. For instance, poverty can be measured through simple income and expenditures or poverty line however; this does not account the expenditures on those goods and services that are variables for well-being such as food and education. Negative expenditures, such as alcohol or cigarettes, also play part in the considerations.
With this, various instrumentations are being utilized to assess the conditions of poverty. Subjective claims remain to be weak basis if it is not validated. Subjective inferences are those data obtained from the subjects but have no specific proofs or reference in any study done by trained individuals. Objectivity is a must in statistical gathering however, if this is not provided proper validation, still the data remains to be weak basis (Maglaya 176).
Poverty measurement practices for determining the numerical data partly reflect what we know – or think we know – about inequality and poverty profiles in the Philippines. According to Edmonds in his book, Reducing Poverty in Asia: Emerging Issues in Growth, Targeting, and Measurement , the phase of assessment usually involves the set poverty lines and welfare indicators. This is where statistics label an individual poor. Such considerations are dealt first before producing such claims (Eadie 198).
In terms of welfare indicators, determining the magnitude of poverty and inequality the government uses current household incomes and expenditures via national surveys. Using standard arguments in microeconomic theory, it can be concluded that since welfare level are being determined by “life-cycle” or permanent income, and since current consumption is a good approximation of this income, current consumption can be better justified as a measure of current welfare. This, however, does not suggest that income does not vary over time. It does, and sometimes these changes are largely comparable to the former (p.198-199).
Talking about setting poverty lines, this does not depend on subgroup’s conditions or to which standard of living do they belong. Poverty lines constructed for various subgroups must be fixed in terms of given standard of living. These set are said to be consistent and imply the same command over basic necessities of consumptions. It is well known that as household income rises, the consumption of cheap and low quality goods decrease and the families focus more on the quality products that they can still afford. These are some of the scenarios that indicating the dynamic characteristic that affects poverty lines (Eadie 200).
Another sophisticated data-gathering tool in quantitative diagnosis of poverty conditions is by the use of Human Development Index (HDI) that has been introduced by ul Haq in the 1990s. This involves the consideration of life expectancy, literacy rate and GDP per capita. The HDI is now being used by the United Nations Development Programme or UNDP, to rank countries in terms of their economic development status. According to the 2004 Human Development UNDP repot, the Philippines has been ranked 83 rd and considered to be a medium development country. The advantage of this tool is the test of comparison between different countries annually. However, the negative aspect that coincide in this method it its limitation towards other factors such as domestic variations that exists between different regions, rural and urban areas that exist in the household. This primarily occurs because of the generalized perspective of this intervention (Eadie.39-40).
Filipinos are usually known for their extravagant fiestas and their various tourist attractions. The proud natural resources have lured “balikbayans” or Filipinos from abroad and tourists. Adding into that are the OFW or Overseas Filipino Workers that produce additional income for the country through remittances. Aside from the macro-economical income source of Philippine government, such conditions give off pseudo-economic boost for the country’s economy. DFA or Department of Foreign Affairs has estimated that there are 5,488,167 Filipinos working overseas that are scattered to over 193 countries during 2002 (Arya 72). The question left for the public is where does this sum of money go considering that the incomes both internal and external are present? Such question triggers the public minds that usually cause demonstrations and governmental blame.
Another factor to be considered is the Philippine international debts that primarily occurred during the time of Marcos and has progressed in the current regime. Sad to mention but as of today, Filipinos are part of the 100 most heavily indebted poor and middle-income countries that must service over 2.3 trillion American dollars in combined debt-stock yearly (Debt for Equity Eadie). According to an online data, Poverty in the Philippines , economic growth has become insufficient in order to support the population growth of the country: GNP per capita has lingered at around $1,000 for the past 20 years and has not even increased. Disasters that have occurred are one of the main reasons that tarnished the economy of the Philippines. Importantly, the crisis came at the same time as the devastating El Niño drought during mid-1990s. This evidently caused domino effect in the economy of the Philippines in which decline has been the particular evident strata. Here is the list of the chronic macroeconomic problems in the Philippines that have long been occurring:
- Gradually diminishing revenue collection inducing fiscal deficit and heavy public sector debt
- Low investment environment that results in particularly low foreign direct investment
- Inactive loans in the banking firms
- Chronic loss of international competitiveness
- Corrupt structural governance and inefficient economic management
In the article found in the official website of the Philippine government (27) entitled, Poverty alleviation tops PGMA’s main goals in the next 3 years, proclaims the president’s own statement regarding her programs and future programs for the alleviation of poverty.
She said increased government earnings or revenues either through raising the effective collection of taxes or sale of government assets is necessary component of poverty alleviation. With the raised revenues, she said the next important thing to do in the next three years is to invest more in human resources and physical infrastructures to create jobs and upgrade the country’s competitiveness. She said social services, like making cheap medicines available, improved healthcare and anti-hunger campaign, which are already being addressed by her administration, are also important components of the poverty reduction program of her administration.
The president’s statement has been questionable to most of the public and the tarnished trust of the people’s body has greatly affected the initiations of this plan. People’s cooperation has become difficult to initiate due to the governmental corruptions that have occurred. The effectiveness of such programs being implemented by the Philippine government has seen to be effective however, only for a short time (Glatzer 124). Most of the programs regarding poverty alleviation are still ongoing as per current administration. Target outcomes of these projects are 2010. However, according to some critics, the results so far of these projects are not yet being that evident (Debt for Equity…27).
The poverty status of the Philippines has not yet been alleviated. The condition of poverty still affects more almost half of the Filipino population. The inequalities of resources partitions are not specific hence; the divisions of such are also affected. The question about the condition of poverty and inequalities in the Philippines is now answerable by the summary of the crude poverty rate 40% and 70 million poor families living in this country. These poverty claims are being validated by the use of Human Development Index (HDI) that are also being utilized by the (UNDP) United Nation development Programme in order to obtain their data. Various notes are important upon the obtaining of these data such as welfare indicators and setting of poverty lines. The probable etiologies of this poverty in terms of macro-economical scope, as addressed in the body of study, are the following gradually diminishing revenue collection inducing fiscal deficit and heavy public sector debt, low investment environment that results in particularly low foreign direct investment, inactive loans in the banking firms, chronic loss of international competitiveness and the corrupt structural governance and inefficient economic management. There are programs being initiated to combat poverty situations however, as according to the study the results seem to be not evident especially for the public’s perspective. Poverty still lingers and unequal distribution of resources are still present in the Philippine society.
Arya, Sally. Living Home: Filipino Women Surviving Migration. In M. C. Pagaduan (Ed.), Poverty, Gender and Migration (pp. 72). Sage Publications Inc, 2006.
Arya, Sally. Poverty, Gender and Migration . Sage Publications Inc, 2006.
Barcelon, Ed. Fight Philippine poverty.(Voice from the South). Manila Bulletin . 2007. Web.
Debt for Equity in MDG Projects; A Philippine Proposal for Converting 50 percent of the Debt Owed by the 100 highly indebted countries to equity investments in the Millennium Development Goals of the United Nations.(Opinion & Editorial) [Letter to The Editor]. Manila Bulletin .2011. Web.
Eadie, Peter. Poverty And The Critical Security Agenda . Ashgate Publishing, Ltd., 2005.
Edmonds, Cedric. M. Reducing Poverty in Asia: Emerging Issues in Growth, Targeting, and Measurement . Edward Elgar Publishing, 2003.
Glatzer, Walter. Rich and Poor: Disparities, Perceptions, Concomitants . Springer, 2002.
Maglaya, Allan. S. Nursing Practice in the Community . Marikina City: Argonauta Corporation, 2005.
Orbeta Jose., H. C. Family, Vulnerability and Family Size: Evidence from the Philippines. In H. Khan (Ed.), Poverty Strategies in Asia: A Growth Plus Approach (pp. 72). Edward Elgar Publishing, 2006.
Poverty-in-the-Philippines: Causes of Poverty in the Philippines . 2011. Web.
Poverty Strategies in Asia: A Growth Plus Approach . 2010. Web.
Son, John.Philippines: For Growth to Continue, Poverty Rate Must Come Down. Inter Press Service English News Wire , 1997, pp. F3.
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IvyPanda. (2022, January 9). Poverty, Government and Unequal Distribution of Wealth in Philippines. https://ivypanda.com/essays/poverty-government-and-unequal-distribution-of-wealth-in-philippines/
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IvyPanda . 2022. "Poverty, Government and Unequal Distribution of Wealth in Philippines." January 9, 2022. https://ivypanda.com/essays/poverty-government-and-unequal-distribution-of-wealth-in-philippines/.
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Home / Essay Samples / Social Issues / Homelessness / The Root Causes of Poverty in the Philippines
The Root Causes of Poverty in the Philippines
- Category: Social Issues , Economics , Government
- Topic: Homelessness , Income Inequality , Unemployment
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