STATEMENT

NEDA-OIC ADORACION NAVARRO

POVERTY STATISTICS FOR THE FIRST HALF OF 2018

Eton Centris Cyberpod Three, EDSA, Quezon City

9:00 AM | April 10, 2019

 

Members of the Philippine Statistics Authority,

Colleagues from NEDA,

Friends from the media,

Ladies and gentlemen,

Good morning.

I will be delivering NEDA’s statement on behalf of Socioeconomic Planning Secretary Ernesto Pernia, who is currently representing the country at the IMF-World Bank Spring Meetings in Washington D.C.

Together with the Philippine Statistics Authority and the rest of the NEDA family, we are pleased to present the results of the preliminary report of the Family Income and Expenditure Survey, or FIES, for 2018.

As reported by PSA, poverty incidence among Filipinos has decreased to 21 percent during the first half of 2018 from the adjusted 27.6 percent during the first half of 2015.

Over the course of three years, we can see that poverty decreased substantially—down by 6.6 percentage points—thanks to sustained economic growth and critical and broad-based reforms and investments that have translated to employment generation and social protection.

For one, growth in the construction and manufacturing sectors created more employment opportunities for Filipinos. Second, we like to highlight the increase in income of Filipino households as well as employment shifts to the industry and service sectors from agriculture.

While inflation rose to 8.1 percent in the period of 2015-2018 from 7.8 percent in 2012-2015, the growth of average income accelerated considerably to 21.2 percent from 15.3 percent, respectively.

Importantly, growth in per capita income of the bottom 30 percent of households picked up significantly to 29.2 percent in the 2015-2018 period from only 20.6 percent in the 2012-2015 period. This implies an increase in real incomes of the poor, which has helped in reducing poverty among Filipino families and individuals.

We note that the top contributor to the strong income growth for the poorest 30 percent of households was an increase in wage and salary incomes. A far second and third were domestic cash receipts/support (including from government) and entrepreneurial activities.

These indicate that the pace (average of 6.5% GDP growth in 2012-2018), quality and consistency of economic growth over the past seven years continue to benefit the poor. In particular, the growing contribution of industry, particularly construction and manufacturing, to output and employment, are creating more income-earning opportunities that are accessible to the poor.

Furthermore, the implementation, expansion and enhancement of government’s social programs have also helped augment incomes.

One of these is the continued implementation of the Conditional Cash Transfer Program, which now includes an additional PhP600-rice subsidy cash grant. The coverage of the Social Pension program widened to over 3.1 million in 2018 from only 930,000 indigent senior beneficiaries in 2015.

Also, the roll-out of Unconditional Cash Transfers or UCT of PhP2,400 per household likely boosted domestic cash receipts of the poor. The UCT Program was released in early 2018 to cushion vulnerable groups from the transitory effects of the tax reform law.

As a result of these social programs and policies, subsistence incidence also declined by 4.5 percentage points to 8.5 percent among individuals, and declined by 3.7 percentage points to 6.2 percent among families in the first semester of 2018. Subsistence incidence refers to Filipinos living in extreme poverty and could not afford basic food requirements.

Moreover, the reduction in poverty is fairly broad-based. Regional disparity eased as all regions, except the National Capital Region, saw a drop in poverty incidence. Eight regions recorded poverty incidence below national average, four of which posted single-digit poverty incidence.

While these initial results are encouraging, we have yet to wait for full-year results of the FIES, as targets in the Philippine Development Plan (PDP) 2017-2022 are based on full-year estimates.

Overall, it is encouraging to see poverty continuing to decline as lives of Filipinos continue to improve. We hope to see robust economic growth and a growing labor market temper the effects of recent high inflation on poverty in the second half of 2018.

We recognize that many challenges remain, and the resolve to reduce inequality does not end. Moving forward, government has to take advantage of the momentum it has built in recent years, while earnestly pursuing other key reforms. One is strengthening partnerships with local government units to expand and enhance the implementation of social programs—specifically the efficient and safe delivery of cash payouts to beneficiaries of the Conditional Cash Transfer program.

We will also see through policies that will help stabilize prices, such as the Rice Liberalization Law, while giving farmers technical support through the Rice Competitiveness Enhancement Fund or RCEF. We are also calling for more opportunities for entrepreneurship, job creation, and sustainable livelihoods for our low-skilled labor force.

Peace-building efforts, especially in the Bangsamoro Autonomous Region in Muslim Mindanao, must be sustained to encourage economic growth. We are optimistic that the implementation of the Bangsamoro Organic Law will introduce a new chapter of peace in the region and in the history of the Philippines.

Lastly, we are continuing the push for reforms that facilitate the creation of new businesses and boost the outputs of firms, which will eventually translate to high-productivity jobs. These are the reduction of foreign investment restrictions and the package 2 of the Tax Reform Program, which will lower corporate taxes and rationalize investment incentives.

Attracting investments, however, should not be limited to urban growth centers but also to other regions and provinces. This is what the National Spatial Strategy aims to address. Improved regional transport infrastructure, for example, will create opportunities for production and create employment and livelihood opportunities in regions outside of Metro Manila.

Rest assured, mga kababayan, we will keep working to ensure that we meet our targets so that every Filipino will be empowered to live a life that is matatag, maginhawa at panatag.

I wish everyone a good day ahead. Thank you.

-END-