By Kyle Aristophere T. Atienza, Reporter
ALMOST HALF of Filipino families said they were living in poverty, with 1.8 million families considering themselves “newly poor,” according to a Social Weather Stations (SWS) poll.
The number of self-rated poor families rose by 700,000 to 13.2 million in September, or 48% of the total, SWS said in a statement on Wednesday. In June, 45% of Filipino families considered themselves poor.
The significant increase in the self-rated poor figure by SWS was likely driven by soaring prices that have reduced people’s purchasing power, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Facebook Messenger chat.
“The continued adverse effects of the pandemic since the first quarter of 2020 also somewhat reduced people’s earnings,” he said, adding that the pandemic has also led to business closures, which reduced livelihood opportunities.
He also attributed the increase in self-rated poverty to economic decline in other countries including the United States, “amid aggressive interest rate hikes since 2022 in an effort to better manage inflation risks.”
Self-rated poverty increased in all areas especially in the southern Philippine region of Mindanao, where it rose to 71% from 54%, SWS said. It also rose in Metro Manila to 38% from 35%. The rate fell in Luzon areas outside Metro Manila to 35% from 39%.
The government seeks to reduce the poverty rate to 16.4% this year, to 13.2% by 2025 and to 9% by 2028 under the Philippine Development Plan, from 18.1% in 2021.
The Philippine central bank last week hiked the key interest rate by 25 basis points (bps) to a fresh 16-year high of 6.5% in an off-cycle move. This has brought the rate increases to 450 bps since May 2022.
The central bank expects average inflation to settle at 5.8% this year before easing to 3.5% in 2024 and 3.4% in 2025.
“The declining economic growth is one of the causes as opportunities for generating incomes are lower today than before,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat.
“However, a crucial factor is inflation because even if one is able to maintain one’s income over time, their real value has declined,” he added.
Philippine inflation rose to 6.1% in September from 5.3% in August amid a double-digit increase in rice prices.
The Philippine economy expanded by 4.3% in the second quarter, the slowest in two years. The country’s economic output averaged 5.3% in the first half, which was below the government’s 6-7% target for the year.
Mr. Lanzona said the monthly poverty threshold used to measure poverty rates in 2021 was roughly P12,000 for a family of five, which was “obviously not enough in meeting basic needs this year.”
“In effect, many of the economic achievements intended for raising social welfare cited in the state of the nation address this year are now proven to be false,” he said. “In effect, the government is not doing enough to reduce poverty, thus moving the country away from development.”
President Ferdinand R. Marcos, Jr. took charge of the Agriculture department in July last year, promising to boost the country’s food security amid rising prices spurred by Russia’s invasion of Ukraine.
More than a year later, the country continues to struggle with rising prices, with rice inflation hitting a 14-year high last month. Mr. Marcos enforced a rice price ceiling on Sept. 5, limiting the commodity’s price to P41 a kilo for regular milled rice and P45 for well-milled rice.
The ceiling was lifted on Oct. 4, and critics have said it did not help bring down prices.
The President’s trust rating fell by three points to 73% in the third quarter from a quarter earlier, the Octa Research Group said on Monday. His approval rating also declined by 6 points to 65%.
SWS interviewed 1,200 Filipino adults for the poll, which had an error margin of ±2.8 points.