While the East Asia and Pacific region has driven the reduction of the Global Prosperity Gap (GPG), the Philippines remains classified as a country with high inequality, World Bank data revealed.
According to a World Bank blog published on Jan. 8, the region has greatly contributed in closing the GPG, which shows how far incomes are from the $25 or about P1,500 per day—a benchmark for high-income status.
It reported that East Asia’s economic progress is primarily driven by rising incomes, with two-thirds of the improvement attributed to higher earnings and the rest to reduced inequality.
The gap shrinks as average incomes rise, especially when the poorest benefit more through inclusive economic growth.
The report said that the World Bank has adopted two new measures to track shared prosperity, which are the GPG and the number of economies with high inequality.
Over 30 years, the GPG more than halved, dropping from 10.9 in 1990 to 4.9 in 2024. East Asia led this improvement, with its Prosperity Gap falling sharply from 16.5 to 2.8, reducing its global contribution from 46 percent to 15 percent.
The region’s income gap is due to lower earnings relative to the $25/day standard. Globally, incomes must increase five times on average to reach this level.
Meanwhile, a related World Bank blog stated that “one in five people live in a highly unequal society.”
According to the latest household survey data, 49 countries, representing about 22 percent of the global population, had a Gini index above 40.
Reports showed that the Philippines has high inequality, posting a 40.7 Gini index in 2021.
Gini index measures income or consumption inequality in an economy, showing how far the distribution is from perfect equality. Countries with an index exceeding the 40 threshold are classified as highly unequal.
“High inequality is more prevalent in low- and middle-income countries as well as countries in fragile and conflict-affected situations (FCS),” the report noted.