Articles | Light and Grace

To date, the Philippines has made remarkable progress in alleviating poverty. From 49.2 percent in 1985, the country’s poverty rate decreased to 18.1 percent in 2021 owing to structural transformation and high GDP growth rates. However, the rate decline has been slower compared to other Asean contemporaries such as Thailand from 67.0 percent (1986) to 6.8 percent (2020), and Vietnam from 58.1 percent (1992) to 4.8 percent (2020).

Thailand was successful in reducing poverty by significantly investing in its people through human capital development and health care initiatives such as their Universal Health Care Scheme (UHCS), which they were able to achieve in 2002. Vietnam significantly improved its education enrolment, healthcare insurance coverage, and access to amenities (electricity, clean water, and sanitation).

We may have gone a long way, but why does our poverty reduction seem to be slower? If the Philippines has one of the fastest growing economies in Asia, then why is its poverty alleviation not at pace? According to a publication of the World Bank in 2022, persistent economic inequality hinders the Philippines’ potential to move rapidly out of poverty. Economic inequality pertains to the unequal distribution of income and opportunity of different groups in a society. As was the case in the Philippines, the ultra-poor do not have the same level of opportunity to have access to proper nutrition, health care, quality education, jobs, and skills which are essential in ending extreme poverty and creating more inclusive societies.

Improved nutrition empowers people and transcends to empowering communities. It helps education, gender equality, and improves life opportunities. Health care systems improve the health status of the whole population, especially the ultra-poor among whom poor health and access to health care tends to be concentrated. In the Philippines, most of the national burden of health care is taken up by private health providers. This creates inequities in access to health services. Since funding for local government units (LGUs) oftentimes vary, some communities face difficulties accessing public health services.

Additionally, most health services are made out of pocket, especially services from private health entities. This makes health care even more inaccessible for the ultra-poor. Due to these facts, the World Health Organization has defined health care in the Philippines as “fragmented.” This means there is a large gap between the quantity and quality of health services for the poor and the rich. Though efforts are being performed to bridge the gap by the signing of the Universal Health Care Bill of 2019, significant results are still yet to be achieved.

Increased access to education can contribute to poverty alleviation. Education plays an important role in the lives of the ultra-poor. Education determines other factors of livelihood, like occupation, which determines income, and then determines health outcomes. It also helps the impoverished develop usable skills, abilities, and resources that help people reach goals.

The roots of unemployment are often speculated with discrimination at an early age. Children from impoverished households tend to be deprived of access to quality education, so they remain in poverty trap from generation to generation. The Philippines’ educational system struggles with policy implementation, and many public schools need more classrooms, books, and other learning equipment (libraries, computers, and laboratories). While schooling is widely accessible, its quality and attainment oftentimes vary by income group.

Children from ultra-poor families are less likely to be enrolled or to reach age-appropriate grade levels. This means that the poor are less likely to reach college education, which hampers their ability to potentially increase income. Although efforts had been made to improve its quality such as the expansion of secondary education (K to 12), we still need to improve its accessibility for all.

Lack of access to basic services such as water, sanitation, energy, transportation, and solid waste management has its effect at the most basic level of living. 52 percent of the population of the Philippines lack access to a reliable and safely managed source of water and 39 percent lack access to safely managed household sanitation.

At the same time, while the electricity access rate in the country is as high as 98 percent in the capital region, the remote regions are still lagging behind. In terms of transportation, traffic congestion has been an issue, especially in Metro Manila. While the rich can afford to buy cars, public transport is still the most economical choice for the poor, but the country still needs to improve its mass transport system.

Overall, the Philippines has a huge potential to eradicate poverty at a faster rate by addressing inequality. However, right policies and proper implementation are what we need in order for us to reach further heights.

Mr. Thomas L. Lazaro III is a graduate student at the Department of Economics of Ateneo de Manila University.

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