as delivered by Dir. Reynaldo R. Cancio of NEDA National Policy and Planning Staff
27 October 2016, 10:00 AM
Philippine Statistics Authority, CVEA Building, East Avenue, Quezon City, 1101

          Good morning, ladies and gentlemen, members of the media. As the Philippine Statistics Authority reported today, the country’s poverty incidence for the whole of 2015 declined significantly to 21.6 percent, from 25.2 percent in 2012 and 26.3 percent in 2009. We are pleased to note that this is within the target set in the Philippine Development Plan, which is 20.0 to 23.0 percent for the year. This has resulted from a generally low and stable inflation, improved incomes, and higher employment rates in the period.  Even so, the rate of poverty reduction between 2012 and 2015 could have been faster, if not for the major shocks, especially the intermittent typhoons and El Nino that adversely affected agricultural production, rural incomes, and food prices.

          The decline in poverty has been more pronounced in recent years. The data showed that there are about 1.4 million less poor Filipinos in 2015 than in 2009. Among families, poverty incidence was also at a record-low of 16.5 percent in 2015, versus 19.7 percent in 2012 and 21.0 percent in 2006. Also, the subsistence incidence, which measures extreme poverty, was reduced by more than half as of 2015, attaining the target of halving extreme poverty under the first Millennium Development Goal. This signifies improvements in the quality of living conditions, which may indicate that the government’s programs and projects, such as the Conditional Cash Transfer Program, have been gaining traction.

          The magnitude or the extent of the reduction in poverty incidence also improved in the period between 2012 and 2015 by 3.6 ppts, compared to 1.1 ppts in the period between 2009 and 2012. This faster decline in poverty is definitely supported by the significant improvements in incomes, particularly among lower income groups.

          Also, while the growth of per capita income in nominal terms accelerated, consumer price inflation decreased from 12.1 percent in 2009-2012 to 9.5 percent in 2012-2015. This means that in real terms, average incomes are growing at a faster rate in the last three years, which is likely to have contributed to poverty reduction.

         Moreover, from 2012-2015, the per capita income of the bottom three deciles of households grew significantly by 24.3 percent and even faster compared to the average for all income groups and even compared to the top 20 percent income group, which grew by 15.8 and 12 percent, respectively. Inflation was also moderate for the lower income segment. For the bottom three deciles, inflation slowed down from 12.0 percent in 2009-2012 to 11.7 percent in 2012-2015, even with higher food prices, particularly of rice.

          Furthermore, the decrease in poverty incidence was observed in all regions and eased disparities across regions. But from 2012 to 2015, the largest drop in poverty incidence was recorded in Region XI and Region XII, at 8.7 and 7.4 percentage point reduction.  Also, for the first time, poverty incidence in CALABARZON is now at single digit level, at 9.1 percent.

            One of the major factors in this improvement of poverty reduction is the increased budget in government’s social development programs, which significantly augmented the income of the poorest households.  The broader implementation of the Conditional Cash Transfer or the Pantawid Pamilya Program, which had a 194.1 percent increase in terms of budget from PhP21.2 billion in 2011 to PhP62.3 billion in 2015, recorded a 91.3 percent growth in terms of coverage from 2.3 million families in 2011 to 4.4 million household beneficiaries in 2015. The regularity of the cash transfer sustained for three years for many CCT beneficiaries has accorded them some resiliency to weather certain shocks.  The program also induced more economic activity in the poor barangays given the presence of a cash economy.  These conditions may have also encouraged a number of them to diversify their livelihood sources.

             Still, there is a lot more work ahead, particularly in reducing inequality across regions and sectors. We need to pay greater attention to the lagging regions particularly in Mindanao, as well as to the agriculture sector where many of the poor are found.

             The underemployment rate still tends to be steep among regions with high poverty incidence. This signals the low earning capacity of the poor and their limited access to regular and productive jobs, otherwise known as in-work poverty. The working arrangements are typically informal, temporary or casual, and low-paid, which cause them to desire additional work.

         Therefore, we in government should leverage on employment as a tool for sustaining the momentum of reducing poverty. This involves addressing both demand and supply side constraints in order to raise job-preparedness of the labor force. We need to significantly improve the business climate to create opportunities for quality, productive employment. Maintaining rapid economic growth that increases incomes of the poorest sector is a crucial factor in sustaining this momentum of reducing poverty. Strategies to improve the business climate, boost competitiveness of the productive sectors, and improve access to financing are definitely important. Easing restrictions on foreign investments will also help boost job generation. Also, reforming agricultural policies to shift the emphasis to food security rather than self-sufficiency could help reduce food prices, particularly of rice. This should be accompanied however by appropriate safety nets for farmers who may be potentially displaced.

            Meanwhile, regional data show that ARMM and Eastern Visayas posted the highest poverty incidence rates. These are the regions that are most vulnerable to natural and man-made shocks.  Man-made shocks, mostly arising from armed conflict, can be addressed by the current efforts to attain lasting peace, along with deliberate strategies to bridge the development gap.  Natural shocks, however, are mostly outside of human control, but individuals and communities can be made more resilient to the impact of the shocks.  A mechanism to accelerate relief and then recovery and rehabilitation efforts following a calamity also needs to be put in place immediately.

           In conclusion, this improved poverty reduction indicates that our goal to eradicate poverty in our country is very possible and highly achievable. As you know, President Duterte has issued Executive Order No. 5 which states as one of the goals, to eradicate poverty by 2040, if not sooner.  We will work hard to fasttrack poverty reduction, reducing it to between 13-15 percent by 2022.  This will be driven by rural and regional development, while addressing the capacity constraints in the other sectors. At present, we are crafting the next Philippine Development Plan for 2017-2022, per the directive of President Duterte, guided by the long-term vision of the country, which is AmBisyon Natin 2040, the Sustainable Development Goals and the 0+10–point Socioeconomic Agenda of the Duterte administration. There is still so much work to be done but we have already begun to lay a strong foundation for the kind of development we want that will enable every Filipino family to enjoy a matatag, maginhawa, at panatag na buhay.

              Salamat at mabuhay tayong lahat.