THE WORLD Bank has reported that the Philippines has significantly reduced the poverty level, but the next challenge is how to move Filipinos up to the secure middle class segment.
World Bank senior economist Liliana Sousa said the Philippines’ poverty rate, or the poor segment, is 15.5 percent based on the latest 2023 study, which is much lower than the 23.5 percent in the 2018 study.
There was also a big leap in the emerging middle class segment from 24.9 percent in 2018 to 32.9 percent in 2023. However, the secure middle class and high income only slightly moved from 21 to 23.8 percent. This means, she said, many are stuck in the emerging middle class level.
The group said Filipino families just earn enough to stay above the poverty line – but not enough to feel economically secure.
“We see a very strong poverty reduction. We see families exiting poverty, exiting vulnerability. However, this is not necessarily a story about a growing middle class; it’s a story about many people being stuck in the middle – where they exit poverty, but are not quite economically secure,” said Sousa.
One of the biggest barriers why those in the emerging middle class segment are not moving to the secure middle class is jobs, or the lack of high quality jobs.
World Bank Division Director Zafer Mustafaoglu added that aside from jobs, the government must also improve on addressing gaps in insurance and social protection systems. The World Bank said a single typhoon or an illness can push Filipinos back to poverty.
“If you don’t have a resilient protection system, shocks push people to poverty for vulnerable groups,” he said.
He said the government needs more comprehensive reforms, such as the creation of better quality jobs, strengthening resilience, like improving social protection mechanisms, better agricultural insurance, and the government also needs to improve public services in health and education.
If the government addresses these concerns, the World Bank said the country can hit its Ambisyon Natin 2040 goals of a 2.9 percent poverty rate and 55 percent middle class by 2040.
The Marcos administration “recognizes that many Filipino families are vulnerable to falling into poverty, including those arising from employment, health, and climate-related shocks,” Malacañang said in a press briefing.
The administration is also “positive” that it could maintain the downward trend of unemployment in the country, she said, noting the unemployment rate in the Philippines slipped to 4.7 percent in April from 5.8 percent in March. (ABS-CBN News)
