Latest WB report on PH
As many as 2.7 million Filipinos will slip into poverty this year due to the economic disruptions brought about by the coronavirus pandemic, the World Bank said.
In a report, “Philippines Economic Update,” the Washington-based institution estimated that poverty rate in the country would rise to 22.6 percent this year from 20.5 percent last year, reversing the country’s recent gains in poverty reduction.
That 2.1 percentage point increase, based on World Bank’s poverty threshold for lower middle-income countries of $3.2 per day, would spawn around 2.7 million new poor Filipinos in 2020.
Rong Qian, World Bank senior economist, said the culprit for the rise in poverty incidence are the containment measures implemented by the government to fight the COVID-19 outbreak.
Qian said the community quarantines, in particular, have resulted in job losses, a decline in wage incomes, a slowdown in business activities, and a fall in overseas Filipino remittances.
“The poor and vulnerable, many of whom work in the informal sector, are especially likely to experience significant welfare losses, given their limited capacity to manage risks,” the World Bank economist said.
Qian added that Filipino families’ perceptions regarding their income sources are also bleak, as a recent survey by the World Bank showed that 88.6 percent of households in country have expressed concerns over their finances.
The Philippine Statistics Authority reported last week that about 3.8 million Filipinos aged 15 years old and above were unemployed in October 2020, that is two million more compared with the same month last year.
“The COVID-19 pandemic threatens to partly reverse the gains made in poverty reduction and shared prosperity in recent years,” World Bank said.
“The expected growth contraction in 2020, along with the subsequent pressure on household income, is likely to increase poverty in the short term,” the lender added.
However, Qian said the rise in poverty incidence in Philippines is just temporary as World Bank expects the economy to recover beginning next year.
“As the threat of the COVID-19 pandemic dissipates and business activities gradually return to normal, the economic recovery is expected to contribute to poverty reduction,” World Bank said in the report.
“The poverty rate is projected to fall to its 2018 level in 2021 and keep falling throughout 2022,” it added.
The Philippines’ poverty rate decreased from 23.3 percent in 2015 to 16.6 percent in 2018.
Prior to the pandemic, the Duterte administration had intended to slash the poverty rate to 14 percent by the end of its term in 2022.