Poverty rate up at 25.8% in H1 2014

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Increases in consumer prices last year and the impact of Super Typhoon Yolanda have raised the poverty level among Filipinos in the first half of 2014 to 25.8 percent from 24.6 percent a year earlier, the latest official survey shows.

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The Annual Poverty Indicators Survey (APIS) released by the Philippine Statistics Authority (PSA) on Friday said the estimated figures refer to the proportion of people below the poverty line to the total population during the period.

Among Filipino families, poverty incidence increased by 1.1 percentage points to 20 percent during the six-month period from 18.8 percent in the comparative months of 2013.

The APIS explained that the data does not reflect the whole poverty situation in the Philippines as the provinces of Batanes and Leyte were not included in the survey.

Higher incomes, food prices

The National Economic and Development Authority (NEDA) said the higher poverty incidence among Filipino individuals and families can be traced to the rapid rise in food prices, particularly of rice, and the lingering effects of Typhoon Yolanda in the first half of 2014.

In a statement, Economic Planning Secretary Arsenio Balisacan said 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, indicating that economic growth has benefited the lower income groups.

“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, who is also the NEDA director general.

However, high inflation rate during the period eroded growth in the per capita income of Filipinos.

Philippine headline inflation rate hovered near the higher end of the 3 percent to 5 percent inflation target in the first half of 2014, averaging 4.2 percent for the semester. During the same period, the consumer price index for food went up to 6.5 percent, and climbed to 2.7 percent for non-food items.

“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,” Balisacan said.

‘Revisit’ grains policy

Balisacan noted that rice prices posted a double-digit growth of 11.9 percent in the first semester of 2014 from only 1.7 percent in the same period in 2013, on the back of a tight supply given lean harvests coupled with less imports.

In this regard, the NEDA chief stressed the need to revisit the government’s grains sector policy, particularly the quantitative restrictions (QR) policy on rice to achieve rice self-sufficiency goal, 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,” he said.

Balisacan said the private sector should be allowed to take the driver’s seat as the government simply facilitates access to both the import and export markets.

Finally, the NEDA chief stressed the need of updating the budget components of the government poverty reduction programs to achieve balance between the movement of prices and the incomes of the poor.

He said the government’s social development programs, particularly the Conditional Cash Transfer provided through the Pantawid Pamilyang Pilipino program, may have provided additional support to temper the rise in poverty but could have contributed more toward reducing poverty had the value of the grants increased with inflation.

“It is also important to ensure the timely disbursement of the budget to maximize the impact of programs and projects,” he concluded.

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