Philippine poverty worsening despite economic growth

The bleak picture of 3.8 million people, nearly double the population of Slovenia, slipping below the poverty line in 2003-2006 is an embarrassment for President Gloria Macapagal Arroyo, who has paraded her government’s anti-poverty credentials amid a growing economy.

James Wolfensohn, the former president of the World Bank who was visiting the Philippine capital, said figures showing that 33 percent of the population were poor in 2006, deteriorating from 30 percent in 2003, were a disappointment.

“That of course for me, as a former World Banker, is a challenging statistic to place before you,” he said at a briefing on prosperity in Manila.

The Philippines, viewed by the World Bank as one of Asia’s brightest prospects in the 1950s, has failed to match its neighbors’ economic progress and is wracked by income inequality, with plush condominium complexes overlooking filthy slums in Manila.

A hundred or so families control much of the archipelago’s wealth, while 28 million people in 2006, up 16 percent from 2003, could not scrap together the 42 pesos (US$1) a day deemed the bare minimum to get by.

More than 12 million people could not meet the 27.8 pesos a day threshold for food.

Economic Planning Secretary Augusto Santos said on Wednesday that part of the problem was due to rising costs for food and fuel, exacerbated by a hike in the national sales tax, as well as rapid population growth.

“Family formation also rose faster than personal income, which dragged down real average family income from 148,000 pesos in 2003 to 144,000 in 2006, further constraining the benefits of higher economic growth,” Santos said.

The Philippines’ population is currently estimated at 90 million and is growing at an average rate of 1.8 million people per year as Arroyo, a devout Catholic who relies on the support of powerful bishops, emphasizes natural family planning over artificial methods.

Last year, economic growth hit a 31-year high of 7.3 percent and Arroyo has vowed to spend more on social services as government coffers swell from asset sales and renewed investor interest.

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