Philippines: Pandemic raised poverty rate to 23.7% in 1st half of 2021

Philippine Daily Inquirer via Asia News Network

18:45 JST, January 2, 2022

The prolonged COVID-19 pandemic which shed jobs and livelihoods, coupled with high consumer prices, jacked up the Philippines’ poverty rate to 23.7% in the first half of 2021, the government reported Dec. 17.

National Statistician Dennis Mapa said the increase in poverty incidence at the start of 2021 reversed a downward trend during the preceding three rounds of the first-semester family income and expenditures survey (FIES) conducted by the Philippine Statistics Authority (PSA) every three years.

From a first-half rate of 27.9% in 2012, poverty slightly declined to 27.6% in 2015, and then dropped to 21.1% in 2018, Mapa said.

The increase in poverty incidence among the population during the first half meant an increase in the number of poor Filipinos to 26.14 million from 22.26 million three years ago before the COVID-19 pandemic struck.

Mapa said the latest FIES results showed that the poverty threshold — the estimated minimum monthly cost that covered basic food and non-food needs of a family — rose 14.7% to 12,082 Philippine pesos ($241) per household from P10,532 in 2018.

It did not help that food items, especially meat like pork, became more expensive in 2021, no thanks to the supply shortage caused by a local African swine fever (ASF) outbreak. As such, headline inflation jumped above the government’s target range of 2-4% manageable year-on-year price hikes in 2021.

Inflation among the bottom 30% income households averaged 4.8% as of end-November, higher than the nationwide headline rate of 4.5%, which meant that the poor shelled out more for basic commodities.

For food alone, households spent an average of P8,393 per month during the first six months, up 13.8% from P7,374 in 2018, Mapa said.

On the other hand, Mapa said average family incomes nationwide rose by a slower 4.5% in 2021 compared to 2018 levels.

While the PSA was unable to measure poverty in 2020 — when about three-fourths of the economy stopped at the height of among the most stringent COVID-19 lockdowns in the region, Mapa said some vulnerable sectors likely experienced spillover effects early this year from the worst post-war recession in 2020 which shed millions of jobs and shut down thousands of businesses.

Mapa pointed to much lower incomes in the first half of 2021 compared to 2018 levels among entrepreneurs, those working in the transportation, storage, and services sectors, as well as households reliant on cash remittances from loved ones working abroad.

Thousands of overseas Filipino workers (OFWs) returned home due to the global recession.

“If we look at our labor force surveys, we will see that these are the sectors which have high unemployment,” Mapa noted.

As such, poverty among households also rose to 18%, or 4.74 million, families in the first half of 2021, from 16.2%, or 4.04 million, three years ago.

“Food poor” families whose spending on food items fell below the food threshold rose to 7.1% (1.87 million households) from 2018’s 6.2% (1.55 million). In the general population, subsistence incidence also increased to 9.9% (10.94 million people) from 8.5% (9.03 million).

Among the Philippines’ regions, the National Capital Region (NCR) — the country’s commercial and business center — continued to have the lowest poverty incidence, although it rose to 7.8% in the first half of 2021 from 6.6% in 2018.