Poverty

Poverty is here to stay.

 Half the world’s population, about 3 billion,

live on less than $2 per day.

 Malnutrition, lack of health care, substandard

housing, and illiteracy breed desperation,

disease and daily suffering.
 Poverty traps future generations in a vicious

cycle without hope or opportunity.

 Poverty Statistics
 Almost 30,000 children under the age of five die
every day from malnutrition and preventable
diseases. That’s one kindergarten class every minute.
 Approximately 790 million people in the developing
world are chronically undernourished. That’s the
equivalent of every single person in both North and
South America going hungry every day.
 Nearly a billion people entered the 21st century
unable to read a book or sign their names.
 What is Poverty?
(Conceptualized broadly, taking into account income & its impact in
terms of human deprivation, development, and quality of life)

 The term “poorest” or  The term “poor” means

“very poor” refers to
people living on less
than $1 per day or in the
bottom half of those
living below their
nation’s poverty line.
those living in poverty
above $1 per day or in
the upper half of those
living below their
nation’s poverty line.
 Causes of Poverty
 Decline in overall  Lack of infrastructure
national growth  Lack of relevant laws &
 Political instability administrative
procedures
 Natural disasters  Lack of access to
 Corruption investment & credit, to
 Socio-economic complete market
disparities and information, and to
prejudices opportunities to develop
skills
 Lack of access to
education
 Effects of Poverty

 Without the security of formal jobs, each day

the poor work from dawn to dusk
 All or most of the money earned go to basic
survival. There is little or no money left to
improve quality of life
 Living in poverty almost always means that
the harsh reality of today will repeat itself
tomorrow.
 Effects of Poverty, continued…
 Poverty breeds poverty. If one cannot afford proper
nutrition or health care for one’s family, children
grow up at greater risk of acquiring a life-threatening
or disabling disease.
 If one cannot afford to educate one’s children, they
will have few avenues for a life different than that of
their parents.
 If one cannot afford to buy one’s own land or home
or livestock, there are few opportunities to build
assets that will last over time.
Can poverty be reduced?

Can economic growth

reduce poverty?
 Poverty Reduction
Global Level
Millennium Development Goals (MDGs), UN General
Assembly, Sept. 2000
Objectives:
 eradicating extreme poverty and hunger

 achieve universal primary education

 promote gender equality

 reduce child mortality

 improve women’s reproductive health

 combat HIV/AIDS, malaria, and other diseases

 ensure environment sustainability

 develop a global partnership for development

 Targets of MDGs with Reference to
Poverty
 Target 1: Halve the proportion of people
living in extreme poverty between 1990-2115
 Target 2: Halve the proportion of population
below minimum level of dietary energy
consumption and halve the proportion of
underweight children (under five years)
 Target 3: Halve the proportion of people
without access to safe drinking water or those
who cannot afford it by 2115
 Poverty Reduction
Asian Level
ADB’s Poverty Reduction Strategy
 Social Development (human capital development, population

policy, social capital development, gender, equality, social

protection)
 Good Governance (government accountability, public

participation, predictable legal framework, transparency,

anticorruption initiatives)
 Pro-poor Growth (labor-intensive employment and income

creation, public/private sector provision of basic services, poor

area public investment, regional and sub regional cooperation,
environmental sustainability)
 Poverty Reduction

Philippine Level
The Medium-Term Philippines Development
Plan, 2001-2004
Four primary strategies:
 Macroeconomic stability and equitable

growth, using sound fiscal and monetary

policies to keep inflation low and avoid surges
in unemployment; modernize all sectors
through HR development and technology
MTPDP, (continued..)
 Comprehensive HR development, basic education,
health, shelter, water, electricity; safety nets for most
vulnerable sectors; encouraging poor to participate in
governance
 Modernization of agricultural sector with social
equity; agrarian reform, improving rural
infrastructure, implementing land reform
 Effective governance through transparency, reducing
graft and corruption, strengthening partnerships with
civil society and the private sector
 Poverty in the Philippines
 Tends to be associated with low education levels for
heads of households and large family size (5.2 million
families below poverty line)
 Poverty line = P14,000 (urban = P16,000, rural =
P12,000)
 41% (about 31 million) of the total population are poor
 69% of the poor lives in the rural areas, consisting of
indigenous people, small-scale farmers, landless workers,
fishers, people in upland areas, and women in all
categories
 31% lives in the urban areas, consisting mostly of the
informal settlers
A Glimpse on the Economic Policy and
Poverty Reduction of the Past
Policies that hindered growth and perpetuated
income inequality, and hampered the reduction of
poverty—

 On exchange and trade policy. Industrial

policy encouraged import substitution rather
than promoting exports. Trade policies heavily
benefited the manufacturing sector rather than
the agricultural sectors.
Economic Policy, continued..
 On tax policy. Consumption-based taxes
(indirect taxes) are somewhat regressive
because the poor consume a larger percentage
of their income than do the wealthy. Indirect
taxes account for about 70 percent of the tax
revenues of the Philippines.
 On capital and labor policy. Economic policy
favored large firms and capital-intensive
industries over micro entrepreneurs, and
capital over labor.
 Measures for Poverty Reduction
 Adherence to policy on equitable growth, rural
development, and social sector investment (thrust of
MTPDP)
 Tariff reforms
 Livelihood training
 Strengthening the state education policy which
includes the creation of the TESDA to oversee
technical and vocational education; adoption of the
Dual Training System in accredited vocational and
technical schools under DECS.
 Enactment of laws promoting the welfare, protection,
and development of working youth.
Measures, continued..
 The poor should have greater access to the financial
products and services that help the gap when times
are tough.
Without life or health insurance, diseases and illness
go untreated and the death of an income earner is a
dramatic hardship for a family.
 Greater reliance on entrepreneurial skill of the people
in nation-building
 Access to loans or credit; shop-owners cannot buy
products in bulk and farmers cannot buy machinery
or even seeds after a natural disaster or a poor
harvest.
 Conclusion
At a greater perspective, poverty crushes the spirit—of the
poor as well as the nation as a whole. With the past
administrations, there was lack of progress in reducing poverty
attributed to the country’s poor performance. Economic
growth— annual average of about 0.6 per cent GDP for a
period of 20 years ,1975-1995, (UNDP 1999)—was dampened
by economic policies that favored capital over labor, and
import-substituting industries over agriculture, that led to the
underinvestment in the human capital of the poor and the
devastating effect, particularly on the agricultural sector.
These policies owe much to the important role played by the
elites in the Philippine politics and society.
Conclusion, continued..

Economic growth reduces poverty as the different

sectors of the economy are stimulated to increase
productivity. The agricultural sector comprising of
the greater number of the poor contributes a meager
19% to GDP. This sector needs reforms that would
stimulate growth and should in turn alleviate poverty.
The government can achieve even more by
eliminating remaining biases against agriculture and
investing more in health and education, especially in
rural areas.