Millions of Filipino families remain at risk of poverty, even as the country moves closer to upper-middle-income country (UMIC) status, showing that national economic gains are not trickling down to the poorer segments of society.
The latest study by the state-owned think tank Philippine Institute for Development Studies (PIDS) showed that, relative to the World Bank’s UMIC poverty threshold of $8.30 a day, 58.7 percent of the Philippine population remains vulnerable to poverty.
The poverty vulnerability rate measures the proportion of households or individuals with a high probability of falling into or remaining in poverty due to unforeseen economic, health, or climate-related shocks. It is generally double or triple the official poverty rate, identifying those near-poor households at risk.
According to PIDS, a major factor driving household vulnerability was the pandemic, which disrupted the trajectory of middle class development and highlighted the fragility of previous economic gains.
“While the country has made significant strides in reducing extreme poverty and in expanding the middle-income class over the past three decades, the COVID-19 pandemic highlighted the fragility of these gains and the vulnerability of many households to shocks,” PIDS noted.
PIDS also cited a persistent urban-rural divide as a key driver of vulnerability, with rural areas continuing to lag in economic opportunities, infrastructure, and access to essential services.
It said the country should focus on preventing future poverty, not just reducing current poverty, by transitioning toward universal social protection mechanisms. “This implies that a social protection system focused narrowly on the poorest is no longer sufficient in a context where poverty is increasingly dynamic and shock-driven. As the Philippines approaches upper-middle-income status, social protection must therefore evolve from a primarily poverty-alleviation instrument into a broader system for preventing downward mobility and strengthening household resilience,” PIDS said.
The goal of achieving upper-middle-income country status is a laudable one for any government, but our government officials have to understand that the real goal is not in the metrics, but in the actual living conditions and future outlook of the Filipino people. As we work towards being classified as a UMIC, other aspects such as the poverty vulnerability rate have to be given the attention it deserves, or such an achievement will only look good on paper, especially if it is not sustainable.
Achieving UMIC status must be done in a way that every Filipino can feel the improvement and see that their future is brighter.*
