By Beting Laygo Dolor, Contributing Editor
All the gains from anti-poverty campaigns earned by the country in the past three years were wiped out in just three months when Luzon, Metro Manila were locked down in the Covid-19 pandemic.
According to an associate professor from the Ateneo de Manila University, millions of Filipinos fell into poverty due to the double-digit increase in unemployment last April.
Speaking before the National Academy of Science and Technology last week, Prof. Geoffrey Ducanes said the government’s efforts to alleviate the effects of the lockdown with its Social Amelioration Program (SAP) would do little to cause the contraction of the economy in the first two quarters of the year.
Prior to the global pandemic, the Philippine economy had been growing at a respectable clip, with a gross domestic product growth of slightly under six percent in 2019. The economy was expected to rise at between six and seven percent this year.
More importantly, the percentage of the population that was deemed poor had been decreasing steadily and was expected to fall in single digits by 2030.
Instead, the Philippines is now officially in recession, although a depression may be avoided depending on how the economy performs in the second semester of the year.
Ducanes said the three years of growth under the Duterte administration was not all that could be lost, as the growth also experienced during the previous Aquino administration could also disappear as well.
He said, “Covid-19 and the enhanced community quarantine have potentially a very large effect on poverty, possibly reversing all the gains in poverty achieved since 2012” or the last eight years.
It was during the Aquino administration that the government first implemented a cash transfer program for the poorest of the poor Filipino families, who were granted regular cash gifts on the condition that their children would remain in school.
The Duterte administration continued the program, resulting in a greater percentage of employable Filipinos with higher skills than the previous generation in recent years.
At the very least, the cash transfers along with the SAP was able to “mitigate the effects of poverty but not fully offset the effect of Covid-19” and the quarantine that was imposed in mid-March.
Based on government data, the nationwide household poverty level was determined to be 14 percent. This would have worsened to 23.5 percent on the assumption that 60 percent of the workforce lost their jobs for three months or until mid-June.
Ducanes, however, worked on a higher assumption of job losses compared to the National Economic and Development Authority’s (NEDA) estimate that only 44 percent lost their jobs during the lockdown period.
Under the NEDA estimate, household poverty would have increased to 21.2 percent, meaning more than one out of five families would be considered as being poor.
The quality of life of the poor would also worsen since higher prices of food would have a serious impact, according to the professor.
He said that if there were a five percent hike in food inflation, poverty incidence would increase to 19 percent, even with the cash grants from the government.
Just how much a Filipino family of five must earn to be considered poor differs, depending on whose data is used.
In 2018, that theoretical family needed a minimum of PHP7,337 (roughly US$146) monthly income for food and PHP10,481 (US$210) for food and non-food needs to be considered as living above the poverty threshold, according to the Philippine Statistics Authority.
The Asian Development Bank, however, set at 16.6 percent of the total population as living below the poverty line in 2018, or slightly higher than the government figure of 16.1 percent for that year.