STATEMENT
Secretary of Socioeconomic Planning Emmanuel F. Esguerra
Press Conference on the 2015 First Semester Official Poverty Statistics
(As delivered by NEDA Deputy Director-General Rosemarie G. Edillon)

18 March 2016, 10:00 AM
Elements at Centris, Quezon City

Members of the media, my colleagues in government, ladies and gentlemen, good morning.

As reported by the Philippine Statistics Authority, our country’s official poverty incidence has eased to 26.3 percent of individuals during the first semester of 2015 – a record-low across all the Family Income and Expenditure Surveys since 2006. We note that family income in the second semester of the year is usually higher than the first semester. Thus, we expect that full-year poverty incidence will be lower than the 26.3 percent poverty incidence recorded in the first semester of 2015. The full-year estimate is between 23.6 percent and 23.8 percent. This is close to the high-end target of 20 to 23 percent for 2015.

Importantly, we are seeing a steady decline in income inequality. Increases in income are becoming more progressive, as incomes of the bottom 30 percent of the population have been continuously rising faster than those in higher income classes.

The acceleration in poverty reduction is likely the result of a faster increase in real incomes in the last three years, as incomes rose faster than the rise in prices. Whereas the growth of average nominal per capita income accelerated from 12.8 percent in 2009-2012 to 15.3 percent in 2012-2015, inflation decelerated from 12.1 percent in 2009-2012 to 9.5 percent in respectively 2012-2015.

The rate of decline between the first semester of 2006 and the same period in 2015 could have been faster, if not for the occurrences of major shocks, particularly from natural calamities like Typhoon Yolanda and the Bohol earthquake and man-made disasters like the Zamboanga siege.

Meanwhile, the country’s subsistence incidence, which is a measure of extreme poverty, also reflected a sustained downward trend across all years. This means that the proportion of families that do not have enough income to meet basic food requirements has been declining. Subsistence incidence recorded its first single-digit occurrence of 9.2 percent among families. Among individuals, subsistence was recorded at 12.1 percent.

Moreover, we are seeing improvements in income distribution. Per capita income of the bottom 30 percent of households grew much faster in fact it was over 20 percent in 2012-2015 than the average income of all households, which grew by 15.3 percent.

These numbers send a strong signal that our efforts in the past years to foster inclusive growth and good governance have translated to actual and tangible improvements in the lives of our people. The well-targeted social protection programs, such as the 4Ps proved vital in helping the poor to get back up after going through major shocks. At the same time, we know that the conditions imposed on the 4Ps beneficiaries will make for a more robust poverty reduction in the future.

Certainly, a lot more needs to be done and we cannot be content with these achievements. Despite these improved numbers, the decline in poverty could have been more. The increase in income was still not enough to offset the increase in food prices, particularly those that are being consumed more by the poor. In particular, the price of rice, which declined in 2015 relative to its 2014 levels, has remained high; actually almost 20 percent higher than its price in 2012.

Moreover, there are still regional disparities in personal income across the country. The National Capital Region consistently posted the lowest poverty incidence due to the vibrant economic activity and growth of employment opportunities, which spill over to adjacent areas like Central Luzon and the Calabarzon, which recorded the second and third lowest poverty incidence. On the other hand, poverty incidence was highest in regions in Mindanao, particularly ARMM. This could be linked to the recurrent armed conflicts and peace and security problems in the area, combined with the island’s exposure to natural hazards. It can also be partly explained by the high dependence on agriculture and the under-performance of the agriculture sector as a whole. We should note that more than 70 percent of all workers in the region are employed in agriculture sector. Meanwhile, regional data showed that Region VIII or the Eastern Visayas posted the second highest poverty incidence, signaling that people there might still be reeling from the destructive aftermath of Typhoon Yolanda which struck the region the hardest in late 2013.

This factor of natural calamities really merits a closer look. We note, for instance that across all periods, the years 2013 to 2015 witnessed the highest number of typhoons and the worst damage to properties, including to infrastructure and agriculture. The country was visited by 94 typhoons in 2011-2015, 9.3 percent higher than the number of typhoons in 2006-2010, resulting in almost triple the cumulative cost of damages amounting to 242.9 billion pesos in 2011-2015 compared with the previous five years.

Amid the lingering challenges, overall, we can still see that the government’s social development programs have brought down poverty, as these helped the poor and vulnerable sectors of the society in meeting their basic needs. Of particular significanc1e is the broader implementation of the Conditional Cash Transfer or the Pantawid Pamilya Program, the KALAHI-CIDSS and the Sustainable Livelihood Program. These three major programs of the government helped build the capacity of poor families and communities to lift themselves out of poverty through healthcare and educational support, as well as access to finance and employment opportunities. No less important is the near-universal PhilHealth coverage among poor families and senior citizens, which was achieved from 2012 to 2015 using revenues from the Sin Tax. This has already begun to provide significant protection from the financially catastrophic expenses arising from illnesses.

Moving forward, the government remains committed to continue and enhance efforts to further reduce poverty and inequality. We will continue to implement our 3-pronged strategy of one, growing the pie, two, improving the distribution of the benefits of the pie and three, building up socioeconomic resiliency.
Therefore, strategies to improve the business climate, boost competitiveness of the productive sectors, and improve access to financing will continue to be our priority. We need to cultivate an atmosphere where businesses and private investments could thrive, so that more employment opportunities are created.
We also need to make sure that the incomes of the poor will continue to rise. We need to continue investing in human capital development, particularly of the poor. (And I would like to add that this is exactly the goal of the 4Ps). This will then be complemented by infrastructure development to promote physical connectivity across the archipelago. Economic linkages should also be encouraged. The idea is to link the poor to growth sectors and areas.

Building up socioeconomic resiliency, meanwhile, requires a comprehensive strategy. The metaphor of “building up” is appropriate in that one really needs layers upon layers of protection against shocks. First is a stable income stream or a means of smoothing the cash flow, for which one a stable income source and easy access to saving instruments. Second is the means to build up assets, preferably a mix of liquid and durable assets. Third is the access to insurance schemes. In all these, we need an efficient and inclusive financial system, which is what our Bangko Sentral has initiated recently. Of course, we also need to give due importance to public social protection systems and social capital. Disaster risk reduction strategies also need to be implemented alongside. We need to continue to improve our capabilities to forecast the incidence of disasters, the early warning devices, the incidence of disasters and its path of destruction. Accordingly, we then need to prepare and widely disseminate plans of action, to which, everyone should be admonished to comply. We also need to be vigilant against sudden increases in the price, especially those commodities that are commonly consumed by the poor. Knowing fully well, that the poor will have to make substantial spending adjustments just to absorb the price increase.

Finally, as we reach the end of this administration, we can say that the government’s implementation of poverty reduction policies and programs have been bearing fruit despite the daunting challenges along the way. What is crucial now is to build on these gains. A lot of groundwork has been laid down and important lessons have come up. The next administration should take stock of these, continue those programs that worked, modify, enhance and complement these, as necessary. Indeed, ang feeling ko, may chance tayo na maabot ang AmbisyonNatin sa 2040.

Salamat at mabuhay tayong lahat.

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