Philippines unlikely to cut poverty rate to single digits by 2028

Poverty incidence in the Philippines is unlikely to fall to the government’s single-digit target by 2028, the latest World Bank report showed.

In its report “Building the Filipino Middle Class: Towards Resilient Futures and Poverty Eradication,” the World Bank projected the national poverty rate to drop to around 12.3% by 2028 “if the pre COVID growth-poverty relationship holds.”

Under the Midterm Update of the Philippine Development Plan 2023-2028, the government projects poverty incidence to decline to 8-9% by 2028.

“The report projects poverty to 2028 and it does find that it will be above the (government’s) goal,” said World Bank Senior Economist Liliana D. Sousa in a media briefing on Thursday. “As of this moment we are not projecting poverty in single digits by 2028.”

The poverty rate fell to 15.5% in 2023 from 23.5% in 2015, while income inequality reached its lowest level in four decades, according to the World Bank.

Despite the gains, about 28% of Filipinos remain vulnerable to falling back into poverty, underscoring the fragility of recent progress.

“The typical Filipino family earns just enough to stay above the poverty line – but not enough to feel economically secure,” it added.

However, the World Bank said poverty incidence could fall to 2.9% by 2040, in line with the government’s long-term target, if authorities implement policies that boost growth, create jobs and strengthen resilience.

Under a business-as-usual scenario or without government intervention, however, poverty incidence would decline only to 6% by 2040.

The government seeks to make the country a predominantly middle-class society where no one is poor by 2040.

World Bank Division Director for the Philippines Zafer Mustafaoğlu said the country could nearly eliminate poverty by 2040 with reforms that boost productivity, job creation, equity and resilience.

“The goal is ambitious, but it is achievable with strong commitment to reforms. The World Bank stands ready to support the government of the Philippines in this journey,” he added. – Justine Irish D. Tabile