News Analysis: Philippines remaining poor in Asia despite faster growth

Despite impressive economic growth during the past few years, the Philippines continues to be among the poorest countries in Southeast Asia as shown by recent findings of two reputable agencies, one foreign and the other locally-based.

In its report, entitled An Outlook for Key Emerging Asian Markets, released this month, the Economist Intelligence Unit (EIU) said the gap between the rich and the poor in the Philippines has continued to widen.

The EIU is the research analysis division of The Economist Group that includes The Economist newspaper which is based in London but with global affiliates.

The EIU said by 2019, "the Philippines will remain one of Southeast Asia's poorest economies, with a lower level of GDP ( gross domestic product) per head than the majority of the region's other major economies."

Despite the robust growth and rising average income per capita, poor Filipinos would be left behind and they would not feel the gains from a fast-expanding economy, the EIU said.

"The Philippine economy will also remain marked by wide inequalities of income, and the disparity between the richest and poorest households will stay particularly acute. Consequently, large numbers of Filipinos will continue to live in poverty," the report said.

Based on 2014 EIU data, the country remained a "small market" despite a medium-sized population of about 100 million as the GDP per head or the value of the economy divided by the population stood at only 2,843 U.S. dollars at market exchange rates and 6, 914 U.S. dollars at purchasing power parity (PPP) rates.

The EIU projected the GDP per head in the Philippines to rise to 3,122 U.S. dollars (market exchange rates) or 7,320 U.S. dollars (PPP rates) in 2015.

In contrast, EIU data showed that ASEAN neighbor Indonesia, even with a bigger projected population of 265.3 million in 2019, would still have a higher GDP per head of 5,515 U.S. dollars given expectations that it would have a 1.46-trillion U.S. dollar economy, or almost three times larger than that of the Philippines, four years from now.

The EIU findings confirmed the result of a survey conducted by the Social Weather Stations (SWS), a local survey firm, which showed that the number of Filipinos who consider themselves as poor remain the same.

According to the SWS, about 51 percent of Filipinos felt they are poor in the first quarter this year, unchanged from 52 percent in December survey last year, or equivalent to 11.4 million families.

The survey was conducted last March 20-23 among 1,200 respondents.

The EIU said it expected the Philippine economy to grow by 6.3 percent this year, "led by strong growth in private consumption," The government's GDP growth target is at a higher range of 7 percent to 8 percent, although international ratings agencies have all trimmed their growth forecast for the Philippine to only about 6 percent this year.

Still, the Philippines' average annual growth rate of 6.3 percent from 2010 to 2014 was the highest five-year average during the past 40 years.

Arsenio Balisacan, director general of the National and Economic Development Authority, the country's highest economic policy-making body, has also confirmed that despite the robust economic growth rates being posted by the country, the Philippines has yet to see the real sign of progress, which was the " improvement in the lives of our people."

"We need to do more to ensure that our country's economic progress is felt by all Filipinos, regardless of geographic location or social standing. To ensure inclusivity, we need new approaches that are more responsive to the needs of sectors and areas where many of the poor are found so that they can contribute to and benefit from economic growth," Balisacan said. Endi