PHL confident it will bring down poverty rate to 9% by 2028

The Philippines is on track to reducing poverty incidence rate to 9% by 2028, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.

“I think given the recent developments and economic data we’ve seen, we are definitely on track,” he said during the Post-State of the Nation Address (SONA) Discussion in Pasay City on Wednesday.

Poverty incidence among individuals rose to 18.1% in 2021, from the 16.7% recorded in 2018, latest data from the Philippine Statistics Authority (PSA) showed. This is equivalent to 19.992 million Filipinos living in poverty in 2021.

Poverty incidence refers to the proportion of Filipinos whose incomes fell below the per capita poverty threshold from the total population.

Under the Philippine Development Plan, the government is targeting to reduce the poverty incidence rate to 16.4% this year, to 13.2% by 2025, and to 9% by 2028. It aims to have a “prosperous, predominantly middle-class society where no one is poor” by 2040.

Mr. Balisacan told reporters that sustained growth will be crucial to meet the Marcos administration’s poverty reduction goal.

“The requirements are we keep our growth target. We make that growth inclusive by ensuring that everyone benefits from that growth, even those who are suffering from shocks,” he said.

This year, the government is targeting 6-7% gross domestic product (GDP) growth and 6.5-8% growth from 2024 to 2028.

Job creation will also help pull people out of poverty, the NEDA secretary said.

“What’s the socioeconomic development agenda? Primarily it’s about creating jobs, not just more jobs but better-quality jobs so that we can achieve poverty reduction to single-digit levels,” Mr. Balisacan said.

The Philippines’ unemployment rate in May eased to 4.3%, from 6% in the same month last year. The number of unemployed Filipinos also decreased by 760,000 to 2.17 million from a year ago.

Mr. Balisacan said it is important to improve job quality and employability of workers, as well as enhance human capital development.

The skills of workers should also “match the kinds of jobs needed by emerging sectors like the internet, artificial intelligence, the green economy and so on,” he added.

Ramping up the creation of quality jobs will also require massive investment, Mr. Balisacan said.

“Without investment, there’s no way to improve the quality of jobs. You have to build factories, plants, roads, bridges, and so on to employ more people in areas where our people can earn decent incomes,” he said.

“That’s the challenge, and we are in a hurry because many of our neighbors have left us long ago, but now we have the opportunity… If we get our act together, there’s no reason we can fail this time.”

Price stability will also be crucial in supporting poverty reduction, Mr. Balisacan said.

With more jobs and stable prices, the “effects of economic growth on poverty will be quite strong,” he added.

While he still expects progress on poverty reduction, he noted this may not be linear as elevated inflation dampened the impact of economic growth.

“Usually, when inflation is low and economic growth is high, then the rate of poverty reduction is faster,” he said. “This time, 2023, and the latter half of 2022, inflation was elevated, and the pandemic also made inflation and prices elevated. That is what dampens economic recovery in poverty.”

Inflation has remained elevated since last year. June saw inflation slowing to a 14-month low of 5.4%, but it still marked the 15^th straight month of inflation exceeding the central bank’s 2-4% target band.

Average inflation stood at 7.2% in the first half. The Bangko Sentral ng Pilipinas has said inflation is on a downtrend, expecting it to average 5.4% this year. — Luisa Maria Jacinta C. Jocson