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Causes of poverty in the Philippines

Discuss about the Multidimensional Poverty in the Philippines.

Poverty remains a big social problem not only in Philippines but also in the world. The people below the poverty line in the Philippines makes a per capita income of almost 16,841 pesos in a year. More than 28% of the population in Philippines live below the poverty line. The government is doing a lot to eradicate poverty in the Philippines. Compared to other neighboring countries, the roughness of the decline in poverty levels is attributed to a large range of income levels across the region and unmanageable population growth (Alkire and Seth, 2015). In 2016, the population of Philippines was 103 million and that is quite high to eradicate the deep rooted poverty in the country. Poverty reduction has been slow and unequal but much slower than neighboring countries like Thailand, Indonesia, and Vietnam. Through the PDP, the government has planned a six year poverty eradication problem with an annual economic growth rate of 7-8% and the achievement of Millennium Development Goals (MDGs). Extreme poverty has been reduced from 33.1 % in 1990 to 16.6% by 2015. 

There are different methods that were used in the research.

  • Interviews

We interviewed a lot of people both the rich and the poor. Most of them in the interview said that poverty is as a result of economic deprivation. Most of the poor people have low skills and therefore can’t employed easily.

  • Questionnaires

Questionnaires on poverty and poverty reduction methods were filled by the residents in various parts of the country. Most of the questionnaires suggested that; In two years, the implementation of the ambitious initiative of the United Nations - the Millennium Development Goals (MDGs) - should be completed. This program was designed to help reduce poverty, promote education, health and achieve gender equality (Asitik and Phelan, 2016).

The people explains why the Philippines does not develop, and the people of the Asian country are doomed to be poor. There are many reasons for this. Among them there is a high birth rate, a devastation of natural resources and a high level of corruption, which, like a cancer, has started metastasis in all areas of public administration.

It can also be noted that 35% of residents from the 94 million population of the country - have not reached 14 years. Most of the country's inhabitants are poorly educated. The Catholic Church has a strong influence, both on the state and on the worldview of the inhabitants. Millions of Filipino peasants are deprived of land, able to feed themselves and do not give a report to the events taking place in the country. Nevertheless, these people do not lose their self-respect.

  • Observation

Efforts to reduce poverty in the Philippines

I have seen many children in different parts of the Philippines. But I have never seen a child with a toy. No toys for all this time.

When you drive past the village, all the children are on the street. Sit on the edges of the road and play what they could get: pebbles, shelves. It is difficult to see a child in the window of the house, and this is understandable: there is absolutely nothing to do at home - neither TV nor computer. In one of the cities I saw about a dozen boys playing with their slippers. Everyone - in the hand on the flip flop with which they compete, who will strike harder (Bruce, 2016).

Remember any cattle for livestock in the village. Any peasant family will be happy with this "home" here. The houses here are very small and consist of one room. They are made of bamboo, branches, rags; on the roof - straw. Inside the house there is no furniture. Windows without glasses. The family absolutely will not lose anything if their house is destroyed by a typhoon. They just go, they will collect new branches and build anew ( Balisacan , 2015).

In cities - houses made of concrete, in two or three floors and terrible in appearance. Nobody cares about appearance here. All cities are the same, the streets are the same everywhere. Transport

Everything I had to ride on was in a terrible state. Tricycles (a local taxi - a motorcycle with a stroller welded to it), a jeep (a city bus made from an American jeep) - are metal trash on wheels, which in any European country would be found unfit and dangerous to the lives of passengers (Yonson and Gaillard, 2018)

With the growth of prosperity, people expand the border of what is important to them. For example, a European is not only important as he looks and his house, but also what surrounds him. In Philippines, this border ends at its own place of residence: they care about their apartment, but do not care about what's going on in the staircase - it's not mine, it does not matter. The border of people living in Asian countries, even more - they do not care about their own housing and their own appearance.

Filipinos do not care what their own homes look like, and how they look. They can walk around in tattered pants, outstretched faded blocks and feel great at the same time. Many women do not have anterior teeth (Cantillon and Vandenbroucke, 2014). The varnish is wiped off half the nails. In men, the floor of the chin is shaved, the floor - no. Here comes to mind the Maslow pyramid, which shows that people first seek to satisfy their basic needs (food, security), and then needs higher order (self-realization, recognition). To look good from the outside is a need of just a higher order, or rather, the fourth of the seven. Here is where most of the Filipinos are, not moving from the third step above. But at the same time everyone needs to say that the Philippines is a fabulous country with beautiful, kind people who inhabit it. (Rakodi , 2014)

Poverty statistics in the Philippines

According to the World Bank, many countries that managed to achieve the greatest progress were helped by one important factor - urbanization. This conclusion is contained in the World Bank's recently published Global Monitoring Report for 2013. As the World Bank notes, countries and regions with a high level of urbanization are ahead of other states in terms of achieving the Millennium Development Goals. It is noted, for example, that in East Asia, where many large cities, for example, China, have made significant progress in the process of reducing poverty (Danquah and Polack, 2014).

According to the World Bank, in countries of Central Asia cities, the mortality rate among children under the age of one year is as much as 9 percent lower than in rural areas. For comparison, in sub-Saharan Africa, this difference is 21 percent.

Cities are centers of economic activity, economic growth and job creation," he says. - Consequently, the level of poverty is much lower in cities than in rural areas. In Philippines, poverty in rural areas is about 27 percent, compared to 16 percent in urban areas. This is a rather significant difference. "

Analysts warns that although urbanization can greatly contribute to economic and social progress, the uncontrolled growth of cities can quickly lead to slums. He believes that governments should plan urban construction, including pursuing a policy that ensures transparency of land purchase and sale transactions (Datt, 2017).

If you are not properly registered as a city dweller, you often do not have access to public services," explains the World Bank's leading economist. - You may be refused servicing in a public medical institution if you cannot confirm that you live in this city. This is a serious problem for many people who become slum dwellers. "

Both in cities and in rural areas, financing is one of the important factors for increasing the effectiveness of health care and social services. The World Bank recommends that countries that have significant reserves in capital and other minerals use the proceeds from the sale of these resources to finance health and education (Khemani, 2015). During the last Spring Meetings of the World Bank and the IMF, representatives of African countries discussed the question of how best to finance social services. Some believe that it is necessary to strengthen government support and increase the amount of funding for health and education systems. Others prefer a combination of public and private financing. It is important to ensure that resources are available to improve health and education in rural areas, he says, which in turn will help rural residents to improve their skills and acquire new skills, making them easier to learn in case of migration to the city.

Effects of poverty in the Philippines

In 2012, a study done showed that 19.2 percent of the Fillipinos were in extreme poverty situation. This is about 18.4 million of the total population based on the set limit of $1.25 per day international poverty line. Most of these people are concentrated in the rural areas where they work in agricultural farms mainly fishing and farming. However, it has been noted that urban poverty has been on the rise where migrants from the rural areas cannot be able to find decent jobs and afford decent housing(Newland, 2017).. As a result, mushrooming of informal settlement has been the trend in most cities in the phillipines.

Most of the poorest provinces in Philippines have high levels of conflict. An average family of the poor has 6 members all dependent on one earner. The members only have an elementary education and below. They have no assets and minimal access to toilet facilities, water and electicity. They also have minimal access to education and health facilities. Among all the population, the poorest face the wrath of financial and price shocks and are highly vulnerable to natural disasters. Due to theses shocks and their efforts to cope with the same, they crawl back in deeper levels of indebtedness(Datt, 2017)..

Weak governance systems and a the lack of fiscal space has been the greatest challenge facing poverty eradication in the country. These problems coupled with corruption, state capture and elite capture of the state organs have been the greatest hindrance of any development not only in Philippines but the world in general(R.U and Yap, 2016).. Inadequate health and education services especially in the ten provinces which are hit by poverty the most is also one of the factors affecting development and therefore entrenching poverty to even more of the masses.

In the southern Island of Mindanao, armed conflicts has persisted while the government lacks a strategy to reduce the conflict. Lack of good management of the resources and increased intensity of natural disasters have made it impossible to develop some parts of the country. With frequent changes in government, a sustained policy for growth and development has been derailed by subsequent governments. Cities have not been able to keep u with the human population increase which is one of the highest in the world. The private sector has also been hard to invest in the country and to increase the job opportunities especially decent jobs to the growing population.

Possible solutions to poverty in the Philippines

The government has introduced social protection programs especially for the extremely poor. A conditional cash transfer program when they fullfil requirements and are provided child immunization and child enrollment programs to school. The government is aware that ending extreme poverty requires growth strategies and programs aimed at sustaining growth(Newland, 2017).. The government is improving public expenditure management and addressing the constraints to economic growth. Additionally, partnerships with agencies such as USAIDto improve human capacity development and growth have also been inculcated.

The Philippines has a population of more than 103 Million, which is one of the highest populations in the world. With this kind of population, poverty levels increase due to the inability of the government to provide economic opportunities to all its citizens.  In this regard, it seems timely to analyze the progress made by the Philippines in reducing poverty, as well as the future challenges facing the country.

Over the past fifteen years, significant progress has been made in the Republic of Philippines: the proportion of the population below the poverty line (in the national definition) has decreased from 33.9% in 2000 to 23.1% in 2016. In addition, the nation manages to reduce poverty indicators much more rapidly than other countries in the Europe and Central Asia region Mendoza, (R.U and Yap, 2016).

The share of the population below the poverty line in the Republic of Philippines decreased from 33% in 2000 to less than 22% in 2013, at an internationally comparable poverty rate of $ 5 per day at purchasing power parity (PPP). In comparison, in the Europe and Central Asia region in general, the ratio of the population below the poverty line ($ 5 per day) was initially lower (47% in 2000), but by 2013, the share of the population of the region with incomes below this level decreased only up to 14%.

The reduction in poverty in the Republic of Philippines reflects the inclusive nature of economic growth in the country over the past fifteen years. In the Republic of Philippines, the highest growth rates of consumption of the least well-off 40% of the population in 2006-2011 were recorded - at a time when many countries were faced with the consequences of the financial crisis and a fall in income of the poorest 40% of the population.

What contributed to inclusive growth and rapid poverty reduction? This is due to a number of factors. The high rate of economic growth was based on the possibility of importing Filipino energy resources at reduced prices and sustained economic growth in the Filipino Federation and other countries that are the main trading partners of the Republic of Philippines, which stimulated output in the industry and the agricultural sector of the country.

Challenges facing poverty eradication in the Philippines

High rates of economic growth allowed the Government to maintain a high level of employment of the population, as well as a consistent increase in real wages and pensions, which increased in connection with the growth of wages(Newland, 2017).

The tax policy and the model of public spending contributed to the redistribution of money from the rich to the poor. Indeed, 97.5% of the population with market income of less than $ 10 per day in PPP enjoys the benefits of this policy. In the Republic of Philippines, direct transfers to the population (especially pensions) are those measures of fiscal policy that ensure the greatest leveling effect in the interests of low-income segments of the population.

As for future prospects, the main reason for concern is that the factors underlying the success of the Republic of Philippines over the past period have exhausted themselves. Productivity in the public sector is not growing at a rapid pace in order to provide opportunities for a significant increase in wages. Demand for Philippine products in the Filipino market is decreasing, the prices for imported energy are not so favorable, the debt burden on the budget is increasing, and fixed assets become obsolete. In the absence of structural changes in the economy, the growth rate will not exceed 5 percent per year, and incomes will increase insignificantly. To ensure payment for housing and communal services, it is necessary to increase the corresponding tariffs, but at the same time, low-income citizens should receive compensation (Newland, 2017).

The recession that has been going on for two years has shown that Philippines' achievements in the field of poverty reduction are unsustainable: in 2014-2016 the share of the population with incomes below $ 10 per day in PPP (the indicator used to determine the lower middle class) increased by 3 percentage points; and in rural areas this indicator increased by 6 percentage points.

Recommendation and Conclusion

In the long term, the problem of population aging will also worsen in the Republic of Philippines. According to the recent report "The golden age of aging", the Republic of Philippines is one of the countries in Central Asia, which face the greatest challenges related to aging of the population: fewer employees, fewer investments and more expenses for pensions.

These factors complicate the efforts of the Republic of Philippines to achieve sustainable general welfare. However, the acceleration of economic growth in neighboring countries opens up new opportunities in the future, provided that the Republic of Philippines starts implementing economic policy, it is necessary to grow the economy to help the socio-economic policy.

According to public opinion polls, the people consider poverty to be the main life problem, causing constant concern, anxiety, and discontent with the authorities. In different polls it is called differently - lack of means of subsistence, low incomes, distress of the family, high cost, but all this is about one - the low standard of living of the majority of the people, the large number of people living in poverty and poverty (Rakodi, 2014). The theorists of market reforms predicted a rise in poverty among part of the population in the early years of transition to capitalism, but then forecast rapid economic growth because of greater market efficiency compared to the "decaying" planned command economy and the concomitant

There are several reasons for the ineffectiveness of the fight against poverty. One of them is ideological. As in the earlier era, ideologists of the ruling bureaucracy said that in the country of victorious socialism there can be no poverty, since social justice prevails, and poverty and poverty are the features of decaying capitalism, and now the official doctrine declares that the country has risen from its knees, stability has come and economic growth, which will only increase, so there is no place in this bright picture of poverty (Paqueo and Lanzona, L.A, 2016.).

Therefore, of course, economic policy should be based on where the country have the main sources of economic growth. Of course, they are in the field of high-tech industries, where it is possible to create modern competitive goods with high added value and so on.


Alkire, S. and Seth, S., 2015. Multidimensional poverty reduction in India between 1999 and 2006: Where and how?. World Development, 72, pp.93-108.

Asitik, A.J., Sharpley, R. and Phelan, C., 2016. Establishing a link between entrepreneurship, built capital and poverty reduction in rural Ghana.

Balisacan, A.M., 2015. The Growth–Poverty Nexus: Multidimensional Poverty in the Philippines. In Sustainable Economic Development (pp. 445-468).

Bruce, M., 2016. CONDITIONAL CASH TRANSFERS (CCTs), EDUCATION AND LABOR MARKETS: An inquiry into poverty reduction in Ghana through the Livelihood Empowerment Against Poverty (LEAP) program.

Cantillon, B. and Vandenbroucke, F., 2014. Reconciling work and poverty reduction: how successful are European welfare states?. OxfordOxford University Press9780199926589.

Danquah, L., Kuper, H., Eusebio, C., Rashid, M.A., Bowen, L., Foster, A. and Polack, S., 2014. The long term impact of cataract surgery on quality of life, activities and poverty: results from a six year longitudinal study in Bangladesh and the Philippines. PLoS One, 9(4), p.e94140.

Datt, G., 2017. Multidimensional Poverty in the Philippines, 2004-13.

Khemani, S., 2015. Buying votes versus supplying public services: Political incentives to under-invest in pro-poor policies. Journal of Development Economics, 117, pp.84-93.

Mendoza, R.U., Beja Jr, E.L., Venida, V.S. and Yap, D.B., 2016. Political dynasties and poverty: measurement and evidence of linkages in the Philippines. Oxford Development Studies, 44(2), pp.189-201.

Newland, K., 2017. Migration as a factor in development and poverty reduction: the impact of rich countries’ immigration policies on the prospects of the poor. In Impact of Rich Countries' Policies on Poor Countries (pp. 187-213). Routledge.

Paqueo, V.B., Orbeta, A.C. and Lanzona, L.A., 2016. The impact of legal minimum wages on employment, income, and poverty incidence in the Philippines (No. 2016-54). PIDS Discussion Paper Series.

Raitzer, D.A., Sparks, A.H., Huelgas, Z., Maligalig, R., Balangue, Z., Launio, C., Daradjat, A. and Ahmed, H.U., 2015. Is rice improvement still making a difference? Assessing the economic, poverty and food security impacts of rice varieties released from 1989 to 2009 in Bangladesh, Indonesia and the Philippines.

Rakodi, C., 2014. Urban livelihoods: A people-centred approach to reducing poverty. Routledge.

Yonson, R., Noy, I. and Gaillard, J.C., 2018. The measurement of disaster risk: An example from tropical cyclones in the Philippines. Review of Development Economics, 22(2), pp.736-765.

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