Poverty Income Distribution And Economic Policy In The Philippines

Income distribution in the Philippines is highly uneven, and poverty rates are higher than in other ASEAN countries. In addition, although the poverty rate has declined over time, the rate of decline has been lower than in other countries, and income inequality has been persistent. These facts are due to historically slow economic growth, owing in part to poor policies, as well as to past failures to reduce structural impediments to a more equal distribution of income. Despite reforms in recent years, it will likely take some time to erase the effects of past policies.

The report is based on a multi dimensional approach to poverty following ADB's poverty reduction strategy, which defines poverty as a deprivation of essential assets. The analytical framework of the country poverty analysis blends a more traditional analysis of income poverty with an assessment of access to five different types of assets. Taken from the sustainable livelihoods approach, these assets are human, physical, natural, financial and social capital.

Against the backdrop of the global financial crisis and rising food, fuel, and commodity prices, addressing poverty and inequality in the Philippines remains a challenge. The proportion of households living below the official poverty line has declined slowly and unevenly in the past four decades, and poverty reduction has been much slower than in neighboring countries such as the People's Republic of China, Indonesia, Thailand, and Viet Nam. Economic growth has gone through boom and bust cycles, and recent episodes of moderate economic expansion have had limited impact on the poor. Great inequality across income brackets, regions, and sectors, as well as unmanaged population growth, are considered some of the key factors constraining poverty reduction efforts. This publication analyzes the causes of poverty and recommends ways to accelerate poverty reduction and achieve more inclusive growth. it also provides an overview of current government responses, strategies, and achievements in the fight against poverty and identifies and prioritizes future needs and interventions. The analysis is based on current literature and the latest available data, including the 2006 Family Income and Expenditure Survey.

The increasing inequality and poverty that seem inevitably to accompany economic growth in developing countries have become more and more evident in recent years. The search for development paths that lead to growth with equality—all too difficult to find—is now an area of central concern for development economists. One result of their concern is this volume, in which internationally known representatives of a range of disciplines address themselves to ways in which growth with equity might be successfully achieved. The book begins with both empirical and theoretical background to the development issues involved, and with an overview of the experience of the international development assistance community. focuses on operational definitions of the poor that will permit analytical, policy-oriented research to lead to useful conclusions. Specific concern is expressed for small-business owners, women, peasants, and recent migrants from rural to urban areas. The basic question, of course, is what can be done about poverty and inequality. includes suggestions for specific measures and provides a comprehensive comparison across a wide range of policy options. The book does not solve the problem, but it does point to directions that promise a reasonably high probability of success. And throughout, suggestions are made for the kind of interdisciplinary research required to raise that probability even further.

In terms of its impact on poverty, the recent economic crisis in the Philippines was more of an El Niño phenomenon than a financial crisis.

In terms of its impact on poverty, the recent economic crisis in the Philippines was more of an El Nintilde;o phenomenon than a financial crisis. Using household survey data for 1998, Datt and Hoogeveen assess the distributional impact of the recent economic crisis in the Philippines. The results suggest that the impact of the crisis was modest, leading to a 5 percent reduction in average living standards and a 9 percent increase in the incidence of poverty-with larger increases indicated for the depth and severity of poverty.The greater shock came from El Nintilde;o rather than through the labor market. The labor market shock was progressive (reducing inequality) while the El Nintilde;o shock was regressive (increasing inequality).Not all households were equally vulnerable to the crisis - induced shocks. Household and community characteristics affected the impact of the shocks. Ownership of land made households more susceptible to the El Nintilde;o shocks; higher levels of education made households more vulnerable to wage and employment shocks.The impact of the crisis was greater in more commercially developed communities. Occupational diversity within a household helped mitigate the adverse impact.There is some evidence of consumption smoothing by the households affected by the crisis, but the poor were less able to protect their consumption, which is a matter of policy concern.This paper - a product of the Poverty Reduction and Economic Management Sector Unit, East Asia and Pacific Region - is part of a larger effort in the region to better understand the social impact of the crisis.