MANILA, Philippines - Poverty incidence rose by 1.2 percentage points to 25.8 percent in the first six months of 2014 from the 24.6 percent registered during the same period in 2013.
This was mainly due to higher food prices and the negative impact of Super Typhoon Yolanda which hit the country in November 2013.
Food poverty threshold also rose by 9.5 percent while overall poverty threshold increased by 9.4 percent year-on-year in the first six months of 2014.
According to the National Economic and Development Authority (NEDA), poverty incidence among Filipino individuals rose to 25.8 percent and among Filipino families to 20 percent.
Data from the Philippine Statistics Authority (PSA)’s Annual Poverty Indicators Survey released yesterday also revealed that poverty incidence among Filipino families increased by 1.1 percentage points in the first semester of 2014 from 18.8 percent in the same period in 2013. The PSA is a line agency of NEDA.
Economic Planning Secretary and NEDA director general Arsenio Balisacan noted that per capita income in the first semester of 2014 was higher by 6.4 percent than in 2013.
Among the bottom 30 percent of income-earners, per capita income increased by about 7.3 percent in the same period the previous year.
The fastest growth rate was observed among those in the fifth income decile (8.5 percent) while the slowest increase was experienced by the top income decile (four percent).
However, per capita income data last year imply that economic growth benefited the lower income groups, including the poor.
“This means that the twin strategies of encouraging investments and production alongside the implementation of a large-scale income redistribution program have worked,” said Balisacan.
However, the country’s inflation rate hovered near the higher-end of the inflation target in the first half of 2014.
The consumer price index for food went up to 6.5 percent and 2.7 percent for non-food items in the same period. This eroded the growth in per capita income of Filipinos.
“The very high prices of food wiped out the gains in per capita income. This situation could have been avoided, especially in the case of rice, which is a staple food for low-income and vulnerable families, usually accounting for 20 percent of their budget. Just at the time when the world price of rice was declining, the domestic price of rice was skyrocketing,” he said.
Balisacan wants government to revisit its grains sector policy, particularly the quantitative restrictions policy on rice to achieve rice self-sufficiency, taking into consideration its broader impact on food prices and poverty.
“While we definitely need to support the agriculture sector in general, we should also maximize the gains from trade and globalization. The private sector should be allowed to take the driver’s seat while government simply facilitates the access to both the import and export markets,” the state economic manager said.