PHL child poverty rates underestimated

The Philippine Institute for Development Studies (PIDS) said current methods of measuring child poverty tend to produce estimates on the low side, misleading policymakers responsible for resource-allocation decisions.

“The stark divergence between standard poverty measures and our individual-level estimates reveals that current methodologies may significantly understate the extent and depth of poverty, particularly among vulnerable demographic groups,” PIDS said in a report this month.

In the “Measuring Poverty within Filipino Households: Examining of Resource Sharing and Economies of Scale” study, PIDS found that child poverty rates could be up to twice as high as the official estimate of 57% in 2021.

PIDS said although the county is seeing progress in reducing overall poverty rates, “a substantial portion of child deprivation may be hidden by household-level measurement approaches.”

These underestimates particularly occur in larger households and those with complex family structures, it said.

“Gender disparities in resource allocation emerge as another critical measurement challenge,” the report found, adding that adult women’s poverty rates are consistently higher than provided by household-level measures. 

This suggests that “conventional approaches” may be “masking” significant gender-based inequalities in access to resources, it said.

Official statistics also put poverty rates at 30.0% for farmers and 30.6% for fisherfolk in 2021, while PIDS findings suggest rates ranging from 25-29% and 24-28% respectively.

“Our findings suggest that targeting mechanisms based on household-level poverty measures may be insufficient for reaching all individuals experiencing deprivation, with this inadequacy varying significantly across different vulnerable groups,” it said.

It cited programs such as the Pantawid Pamilyang Pilipino Program that may need to add “more nuanced targeting criteria” factoring in household composition and sector-specific patterns of intra-household inequality.

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Source: Business World

PH to miss income status goal

Economic growth will likely fall short of official targets for this year and the next, a government-owned think tank said, delaying the Philippines' bid to hit upper middle-income status by 2025.

"[The] outlook on Philippine GDP (gross domestic product) growth remains volatile, uncertain, complex, ambiguous, and disruptive (VUCAD) as indicators remain conditioned on economic policies to be implemented by global powers and how responsive the economy would be," the Philippine Institute for Development Studies (PIDS) said in a November discussion paper.

Lower-than-expected third-quarter GDP growth of 5.2 percent has put this year's 6.0- to 7.0-percent goal at risk. As of end-September, growth was below target at 5.8 percent — a 6.6-percent fourth-quarter expansion will be needed to hit the lower end of 6.0 percent.

The PIDS said that October-December growth could pick up to 6.0 percent, driven by "continued government spending on infrastructure development but hampered by the damages of recent natural calamities."

While higher than the previous quarter, full-year growth will fall between 5.8 percent and 6.0 percent, it added.

Moreover, 2025 growth is expected to also fall below the 6.5- to 7.5-percent target at 6.1 percent. Easing inflation and policy rates that will reinforce both consumption and investment activities of the private and public sectors were seen as driving the expansion.

"While the Philippines continued above-expectation results in the first half of 2024 at 6.1 percent... it remained short of the required growth for the Philippines to be escalated to an upper middle-income economy by 2025," the think tank noted.

The goal can be achieved by late next year or early in 2026 " if the economy can grow as much as 8.0 percent with an exchange rate not depreciating much beyond the PHP/USD 58.00 mark," the PIDS said.

Hiking gross national income (GNI) will be crucial to achieving the income status goal, and the think tank said that "by sustaining at least a six to seven percent GDP growth, accompanied by continued growth in net factor income from abroad through remittances and overseas investment income, GNI can increase alongside the current decline in average annual population growth rate."

The country's GNI per capita rose to $4,230 in 2023, up from $3,950 in 2022. This is still within the lower-middle income range of $1,146 to $4,515, which was updated from the $1,136 to $4,465 level set last year.

To achieve upper-middle income status, GNI per capita has to hit $4,516 to $14,005, also now higher than the previous range of $4,466 to $13,845.

Economic managers are still optimistic about hitting the income status by the end of next year, stressing that a nominal growth of 10 percent should take the country there.

Nominal GDP growth, which is not adjusted for inflation, was reported at 8.8 percent as of March 2024, lower than the 9.28 percent recorded in December 2023.

Significant headwinds to growth will persist into next year, the PIDS said, with the key risks being a global economic slowdown, inflationary pressures, currency volatility, rapid climate change, political and governance issues, skills mismatches and other labor issues, and geopolitical tensions.

To address this, it recommended that households improve their financial resilience, private firms adapt to a VUCAD economy and the government work on promoting economic stability and resilience via effective policy directions.

Source: Manila Times