CHAPTER I

INTRODUCTION

Philippines is one of the developing countries in the world. In fact, from being
The Sick Man of Asia, the country has earned its new title as Asias Rising Tiger because of
the macroeconomic stability and improvement in the countrys fiscal status (Konishi, 2013). The
Philippines has been the fastest growing economy in Asia in the third quarter of 2016 with a 7.1
percent growth rate. It was followed by China (6.7%), Vietnam (6.4%), Indonesia (5%) and
Malaysia (4.3%) (Edillon, 2016). However, despite the said improvement, the country still faces
economic problems like corruption, heavy reliance on remittances, poor infrastructure,
unemployment and most especially poverty (Borade, 2016).

National Statistical Coordination Board (NCSB), National Anti-Poverty Commission

(NAPC), National and Economic Development Authority (NEDA) and Department of Social
Welfare and Development (DSWD) were the primary government agencies that monitor the
poverty situation in the country. Based on previous issued listings in the Annual Poverty
Indicator Survey (APIS), Bicol had already outperformed the provinces of Central and Eastern
Visayas, Caraga regions and Northern Mindanao. This result was somewhat contrary to the
statement made by NEDA that majority of the poor population in the country was coming from
Bicol. In a report made to the Regional Development Council, 2.3 million (9.8%) out of the 23.8
million poor population comes from the region (Salceda, 2014). According to NEDA, the
preponderant number of poor residents in Bicol was from Camarines Sur and Albay.

NCSB explained that poverty can be attributed and interlinked to other problems like
population growth, lack of sufficient source of income and even calamities that had happened in
the country. In the year 2012 to 2013, Bicols regional economy grew by 7.1 percent; however
the effect of this growth has not been felt by the people. Continuous efforts and programs that
address this problem are much more needed. More investments that lead to more employment
had been identified as the easiest way to finally escape poverty (Banua, 2014).
 Given the aforementioned current poverty situation of the Bicol Region, this study is,
therefore, a great venue to help in resolving such problem. This research will primarily assess the
poverty situation within the Bicol Region for 2006 to 2015 using the available data from
different government agencies. It aims to identify the contributing factors to the poverty situation
and to determine whether the programs and policies implemented to alleviate poverty were
effective or not.

Statement of the Problem

The main problem of the study is to assess the poverty situation in the Bicol Region from
2006-2015. Specifically, it attempts to answer the following questions:

1. What is the poverty situation in the Bicol Region from 2006 to 2015?
2. What are the contributing factors that affect the poverty situation in the region?
3. What are the programs and policies implemented by the government in order to alleviate
poverty?

Significance of the Study

The fulfillment of the study could be could be highly significant and beneficial to the
following:

Economics Classes.
Future Researchers. This study will serve as a supplementary data for other researches.
The information it will give could become their basis in the studies they will be
conducting in the future.

Scope and Delimitations

 The study is concerned with the poverty situation of the Bicol Region from year 2006 to
2015. The data to be collected will deal only with the poverty incidence of both individuals and
families which will be taken from the statistics provided by different government agencies such
as National Economic Development Agency (NEDA) and Philippine Statistics Agency (PSA).
Other literature and studies related to the present research will also be conducive to the
interpretation of data. The study will be conducted from November 2016 to March 2017.
 Chapter II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presented the related studies and reports which provided relevant
information about the poverty situation of the Bicol Region. It likewise indicated the contributing
factors and the different proposed and implemented government programs to alleviate the
regions problem on poverty.

A. Poverty Situation in the Philippines

A.1 Poverty Incidence

From the official poverty status reported by the National Statistical Coordination Board
(NSCB) of the Philippine Statistics Authority (PSA), the poverty incidence of 2006 to 2009
worsened from 26.4 to 26.5%. The PSA revised their poverty estimation methodology under the
Resolution No. 9 Series of 2011 so there were discrepancies from the poverty reports they
released previously. According to the official poverty report of PSA, the poverty incidence of
21.6% for 2015 declined notably from the 2006, 2009 and 2012 data of 25.2, 26.3 and 26.6%,
respectively. A recent report from the World Bank (WB) in 2014 also highlighted the significant
decline in poverty incidence of the Philippines in 2013. It stated that after long periods of slow
reduction in poverty, in 2012-2013 poverty declined significantly by three percent.

To have a concrete illustration of the poverty statistics, the researchers considered the
poverty threshold and the number of poor families or individual persons from 2006 to 2015.
According to the National Anti-Poverty Commission (NAPC), for a family of five to be
considered non-poor, the monthly threshold to meet the basic food and non-food needs increased
from Php5, 586 in 2006 to Php9, 140 in 2015. Individually counted, PSA reported that there
were 22.6, 23.3, 23.7 and 21.9 million poor Filipinos in 2006, 2009, 2012 and 2015, respectively.
PSA stated that within 9 years, there was an average decrease of 80,000 poor people per year.
A.2 Poverty Incidence and Gross Domestic Product (GDP) Growth

Based from the Policy Notes publication by the Philippine Institute for Developmental
Studies (PIDS) in 2015, the GDP growth in 2012 of 13.2% was significantly higher than the
2009 and 2006 growth of 6.8 and 11.2%, respectively. However, the GDP growth was in contrast
with the stagnant change in poverty headcount. The study also explained that economic growth
does not mean less poverty as proven by poverty analysts such as Ravallion. This was supported
by a report released by the WB (2014) which stated that even though economic growth in the
Philippines was 3.3% over the past ten years, the poverty headcount rates did not change
considerably.

A.3 Poverty Incidence and Unemployment Rate

According to the National Economic and Development Authority (NEDA) report in

2015, the lowest unemployment rate for almost ten years has been recorded. It was supported by
the PSA report and it stated that unemployment rate decreased from 6% in 2014 to a record-low
of 5.7% in 2015. Previous reports by the NEDA showed consistent decrease in the
unemployment rate from 7.3, 7.1, to 6.8% in 2006, 2009, and 2012, respectively. However, it
must be noted also that the participation rate of the labor force decreased from 64 to 63.6% from
2006-2015 even though the population increased then.

Relating the unemployment statistics to poverty, according to a report released by the

PIDS in 2010, the poverty incidence of the unemployed was lower than the employed. In 2012,
the poverty incidence rate of the unemployed was 18.7% while the employed was 21.9%. The
study explained that unemployment is not the problem of the poor in the country. It further
explained that 81% of the unemployed people in 2012 were not poor and that these people have
high educational attainments. Additionally, the report from PIDS illustrated how the poor
underemployed Filipinos were mostly manual and untrained workers, farmers, fishermen and
forestry worker. Meanwhile, the poor employed were mostly situated in the National Capital
Region (NCR).
B. Factors that contributed to Poverty Situation in the Philippines

a.) Increasing Population. Based from the recent PSA Census of Population report, there
were 100,981.437 Filipinos in 2015. PSA reported that population grew by 3.62% from
2000-2015. According to a PIDS publication in 2006, the rapid increase of the population has
been one of the causes of poverty. Consequently, as long as the poor are growing in numbers, the
poverty reduction programs will be overshadowed. The Asian Development Bank (ADB)
poverty study in 2009 also stated that one of the main causes of poverty in the Philippines was
the rapid growth of the population and the failure to manage it properly.

b.) Worsening income distribution. A publication from the PIDS (2010) stated that the
rise in poverty during 2006 was caused by the high income inequality in rural areas. According
to the study, it must be noted that 71% of the poor resides in rural areas that is why the unequal
income distribution made the poor much worse. Another study from the PIDS (2010) reported
that the share of the poorest 20% of the families in the Philippines income did not change
significantly since 1985. In addition, according to a report from the Senate Economic Planning
Office (SEPO) in 2013, the bottom 20% of families in the Philippines has an average of 6% of
the total share in the nations income while the upper 20% has 50% share. The report further
stated that the income of the upper 20% was eight times that of the lower 20 %.

c.) Slow growth rate of the agricultural sector. According to a report by the ADB in
2009, the poverty incidence was high in the rural areas because of the problems the agriculture
sector has been facing for almost 10 years. The report further illustrated the problem by showing
the percentage of poor people (75%) living in rural areas because of the unsustainable
agricultural growth. Additionally, according to a publication released by the PIDS in 2010, the
income inequality in rural areas was the effect of the slow growth and productivity in the
Agriculture, Fishery and Forestry sector. Notably, it was important to know that 45% of the poor
families have family heads working in the Agriculture sector. Another study by PIDS in 2010
proved that indeed the agricultural workers have the highest poverty incidence. It illustrated that
the poverty rate was 54% for workers in the agriculture, fishery and forestry sector.

d.) Family size. PIDS had a study in 2010 stating that family size is one of the
non-income causes of poverty. It stated that the poverty rate increases as the family size becomes
larger. The study further illustrated that in a family with more than 7 members, there was a
higher poverty incidence of 48% than with less than 3 members of 11.2%. Recently, according to
the 2015 discussion paper released by the PIDS, the constantly poor families have an average of
6 members with 3 dependents; while the families who were never poor have an average of 4
family members with only 1 dependent. The paper also explained that the movement of the
people or families in and out of poverty was important to consider. The study further illustrated
that the non poor families became poor because in a period of five years, their dependent
increased by one; while the poor families became non poor because their dependent decreased by
one.

e.) Educational Attainment. In 2010, a study from PIDS listed educational attainment as
one of the factors that contributes to poverty. It stated that as the family heads get educated, the
poverty rate decreases. For instance, during 2006, household heads that were high school
graduates have a poverty incidence rate of 43.9% while those that were at least college graduates
have a poverty incidence rate of 2.3%. A recent study released in 2015 by the PIDS stated that 19
out of 20 poor Filipino families have little or no education at all.

C. Programs implemented to alleviate poverty situation in the Philippines

a. Pantawid Pamilyang Pilipino Program (4Ps). According to a study reported by the

PIDS in 2013, 4Ps was the largest and the most comprehensive poverty reduction program
implemented in the Philippines. It stated that 4Ps helped the poor Filipino families by giving
them the opportunity to send their children to school and have regular health-care check-ups.
Based from the report of the Official Gazette of the Philippines, as of August 2015, there are
4,353,597 active beneficiaries and a total of P27.15 billion cash grants.

According to a publication released by PIDS on 2013 assessing the 4Ps, school

participation rate increased by 3.5% among children aged 6-14 years old. This indicated that
almost 100,000 more children attended the school after the implementation of the program. This
was supported by a 2013 evaluation report from the ADB stating that since the implementation
of 4Ps in 2008, it has helped almost 3 million poor families and has been meeting the key
objectives of the program. The report stated that the 4PS has increased the school participation
rates and improved the utilization of the health care services by the poor household.

Recently, based from the 2015 study of the PIDS, the 4Ps resulted to a decrease of Out
Of School Children (OOSC) by Php2.6 million and Php1.8 million in 2010 and 2011
respectively. Also, a report from the Department of Social Welfare and Development (DSWD) in
2015 reported high percentage of compliance by the beneficiaries. Moreover, according to a
report by the Official Gazette of the Philippines on April 2016, the 1,511,320 beneficiaries of the
4Ps have improved their status to non-poor. However, it must be taken into account that 4.5% of
these recipients were transient poor and still vulnerable to poverty.

The 2013 study by PIDS stated that 4Ps has been controversial because of the inclusion
of non-poor families in the program. Furthermore, according to a study by Fernandez and
Olfindo (2011) using the 2009 FIES, only 72% of the 4Ps beneficiaries in 2009 come from the
bottom 20 percent of the families. This showed that 29 out of every 100 beneficiaries are not
poor. There also have been media reports in 2015 regarding the misuse of 4Ps fund; but, a
statement from the ADBs Philippines Director in 2015 stated that the reports was based from
outdated 2009 data and emphasized that the ADB will continue to fully support the program. It
was also stated that 4Ps was now the worlds third largest Conditional Cash Transfer (CCT)
because it has helped almost 4.4 million families as of 2014 and the program has been meeting
its goals and objectives.

b.) KapitBisig Laban sa Kahirapan Comprehensive and Integrated Delivery of Social Services
Project (KALAHI-CIDSS). As a method of reducing poverty in the country, Department of Social
and Welfare Development (DSWD) in partnership with Word Bank implemented the Kapit Bisig
Laban sa Kahirapan (KALAHI) framework. The project was established during the Arroyo
Administration in 2003. It used the community-driven development (CDD) strategy in
empowering ordinary citizens, mainly from rural areas, to actively and directly participate in
local governance by identifying their own community needs, planning, implementing, and
monitoring projects together to address local poverty issues.
The program in its first years was allotted to the 42 poorest provinces according to NSCB
ranking. Three criteria were used to determine the beneficiaries of the project namely quality of
human capital, housing and amenities, and access to centers and trade. With the success of the
program in its starting years, in 2014, the program was expanded into a national-scale of CDD
approach which covered 26.9 million individuals distributed among 14 regions with a budget of
Php 43.9 billion, to be implemented from 2014 to 2018. This expansion aimed to cater not only
the poor but also the survivors of Typhoon Yolanda in 2013. Out of 659 municipalities covered
in the redesign of the project, 80% were Yolanda-affected municipalities.
 CHAPTER III

METHODOLOGY

This chapter presented the research design employed and the data gathering procedures
used in the study.

Research Design

Descriptive method was used in the study. The quantitative data, showing the poverty
situation of the Bicol Region from 2006 to 2015, was collected from different government
agencies such as National Economic Development Agency (NEDA) and Philippine Statistics
Agency (PSA), among others. Such facts, together with the qualitative data from related
literature and studies, were used to evaluate the contributing factors affecting the poverty
situation of the region as well as the current government policies and programs implemented.

Method of Data Collection

The researchers used primary sources such as official statistics and government reports in
addition to the secondary sources such as newspaper articles, journals and case studies regarding
the poverty situation of the Bicol Region from 2006 to 2015. The data gathered were used for the
review of related literature and studies, as well as, for the analysis of poverty situation in the
Bicol Region from 2006 to 2015.

Data Gathering Procedure

The researchers identified the data to be gathered first. Then, the necessary data were
retrieved from the government sites where it could be accessed. The data collected were used for
analysis and interpretation.

CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

The following were the data gathered by the researches to fulfill the objectives of this research:

A. Poverty Situation in the Bicol Region

A.1. Poverty Incidence of the Bicol Region as a whole

The poverty incidence of the Bicol Region continued to decrease, from 44.23% in 2006
to 36.01% in 2015 among individuals, and from 35.37% in 2006 to 27.50% in 2015 among
families. This showed a reduction in the number of individuals and families whose incomes
were not sufficient to meet their basic food and non-food requirements.

For the year 2015, an individual Bicolano needed around Php 21,476.00 of annual
income to provide for his/her minimum basic food and non-food needs. This showed an
increase of about 62% for the poverty threshold between 2006 and 2015. Regardless of this
situation, some Bicolanos were able to get sufficient income to attend to their needs; thus,
stepping out of the poverty line.
 Fig.1 Poverty Incidence among Individuals and Families in the Bicol Region

from 2006 to 2015 (Source: PSA)

A.2. Poverty Incidence of the Provinces in the Bicol Region

Fig.2 Poverty Incidence among Families in the Bicol Region

from 2006 to 2015 (Source: PSA)

a.) Albay. After having an increasing poverty incidence among individuals and families from
2006 to 2012, it lowered down to 25.21% and 17.64% in 2015, respectively. This represented
a decrease of 171,330 in the poor population and 16,973 in the poor families of Albay
between 2012 and 2015.

b.) Camarines Norte. From 2006 to 2015, the poverty incidence in Camarines Norte was
fluctuating. Among individuals, the 41.10% in 2006 represented 217,410 people in
Camarines Norte. It increased by 9,695 in 2009 and declined by almost 67,000 in 2012.
However, there was an additional 77,322 individuals whose annual income was lower than
the Php 22,096.00 poverty threshold for Camarines Norte in 2015.

c.) Camarines Sur. Despite the decrease from 855,074 poor people and 142,173 poor
families in 2009 to 665,165 and 104,902 in 2015, respectively, Camarines Sur still had the
highest number of poor population and families in the Bicol Region throughout the years.
However, it was only second to Masbate in terms of poverty incidence because Camarines
Sur had the greatest total population in the whole region, which increased the denominator in
the computation of such.

d.) Catanduanes. Catanduanes had the lowest number of individuals and families whose
annual incomes were below the poverty threshold from 2006 to 2015. However, after a
significant decrease between 2006 and 2009, the poverty incidences increased by almost 10%
and 24% between 2012 and 2015, respectively. These were equivalent to additional 42,912
people and 6,103 families who were considered poor.

e.) Masbate. In spite of having the lowest poverty threshold in the whole region, Masbate had
the highest poverty incidence among other provinces from 2006 to 2015. It was also one of
the provinces who had the highest poverty incidence nationwide. Despite having only
424,568 poor people and 69,674 poor families in 2015, which were lower than those of
Camarines Sur, Masbate was still higher in poverty incidences because it had a lower total
population than Camarines Sur. Higher poverty incidence implied that there were more
individuals and families who could not suffice their basic food and non-food needs than those
who were capable of doing so.

f.) Sorsogon. Sorsogon had the lowest percentage of change in poverty incidence from 2006
to 2015. It was second to Masbate for having the lowest poverty threshold in the region. The
77,247 increase in the poor population between 2012 and 2015 showed only a little rise in the
poverty incidence among individuals due to the parallel upsurge in total population.

A.3. Poverty Incidence and Gross Domestic Product (GDP) Growth in the Bicol Region

For the year 2015, Bicol Region recorded the highest growth rate it had ever attained in
terms of gross regional domestic product (GRDP). According to the Philippine Statistics
Authority (PSA), the 8.4% growth of the GRDP puts the region on top of all regions. There
was also a high GRDP growth in 2012 with 8.8% and 8.2% in 2009. PSA data showed that
from 2012 to 2015, there had been a noticeable drop in poverty incidence, from 41.06% to
36.01% (See Fig. 1). While the region was deemed to be the fastest growing, Bicol
continued to strive to be removed in the list of the poorest regions in the country.

A.4. Poverty Incidence and Unemployment Rate in the Bicol Region

According to the National Economic Development Authority (NEDA), Bicol was only
one rank higher than the ARMM because of underemployment despite the fast growth in its
economy. There was a need to create more quality jobs in order to graduate from poverty
line and improve income. From 2006 to 2009, the number of employed persons increased by
 2 million while total population increased by 4 million. There had been a considerable
decrease in the unemployment rate in the Bicol Region from 2013 to 2015 after an
increasing trend that began in 2005. According to Department of Labor and Employment
(DOLE) Bicol, the poverty incidence in the region was decreasing since most of the
Bicolanos were actively earning. Earnings could transform the daily living of the entire
family. DOLE was eager to achieve their vision of having at least two sustainable income
earners in each family.

B. Factors Affecting Poverty Situation

a.) Increasing Population (family size). The population of the Bicol Region was
5,796,989 based on the 2015 Census of Population. It was higher by 376,578 compared with
the 5.42 million in 2010, and by 1,110,320 compared with the 4.69 million in 2000. On
average, the population of the Bicol Region increased by 1.29% annually during the period
2010 to 2015 by 1.46% during the period of 2000 to 2010. Among the six provinces
comprising the region, Camarines Sur had the biggest population in 2015 with 1.95 million
and Catanduanes had the smallest population with 261 thousand.

Table 1. Population by Province: Region V - Bicol

(Based on the 2000, 2010, and 2015 Censuses)
Population (in thousands)
Province
2000 2010 2015
Albay 1,091 1,233 1,315
Camarines Norte 471 543 583
Camarines Sur 1,552 1,822 1,953
Catanduanes 215 246 261
Masbate 708 835 892
Sorsogon 651 741 793

However, despite the increase in population, the poverty incidence of the Bicol Region
decreased. This implied that an increase in population did not necessarily mean an increase in
poverty incidence. But, it could still be deduced that population growth does cause poverty
and poverty does cause population growth.

Larger family sizes tend to induce higher dependency ratios, which lead to lower per
capita incomes and therefore greater potential for monetary poverty. The average family size
in the Bicol Region was 4.9 in 2010 and decreased to 4.8 in 2015. All of the provinces
family sizes also decreased between 2010 and 2015. This change was in line with the overall
decreasing trend in the poverty incidence of the region.

Fig.8 Average Family Size of the Provinces in the Bicol Region in 2010 and 2015

b.) Income Inequality. The poor in the Philippines control less than 2 percent of the
countrys total income, while the rich control 40%. For every 100 pesos gained in the
national income, less than 2 pesos go to the poorest ten percent of our population.
 Fig.9 Number of Families by Income Class in the Bicol Region from 2006 to 2015

(in thousands)

c.) Natural Phenomena. The occurrence of typhoons and other natural phenomena were
significantly affecting the poors standard of living. Since most of the poor population were
dependent on the environment for their livelihood, they suffered more losses, illnesses,
injuries, and even deaths than the rest.
In August 2008, the Mayon Volcano manifested mild ash explosion that reached an
approximate height of 200m above the crater. In 2014, the production in the agriculture
sector decreased due to various natural disasters such as typhoon Glenda and volcanic
eruptions that hit the region. As a result, the income of farmers and fishermen were also
lower. Because most of the poor families in the region were heavily dependent on
agriculture, those disasters adversely affected the poverty incidence. Also, the impact of
typhoon "Glenda" in July 2014 badly affected the real estate, resting and business
administration which registered the slowest growth due to the damage of 42,000 houses.

d.) Slow Growth Rate of Agricultural and Fisheries Sector. The growth rates of palay
and corn production in the Bicol Region decelerated to 0.6% and 3.5% in 2008 from 11.6%
and 37.7% in 2007, respectively. Similarly, the growth rate on fish production slowed down
to 5.3% in 2008 from 10.1% in 2007. After this deceleration, the agricultural and fisheries
sector in the Bicol Region continued to grow in a relatively slow trend.

The decline of production in the fisheries sector was due to increment weather condition
and frequent gale warnings issued by the Philippine Atmospheric, Geophysical and
Astronomical Services Administration (PAG-ASA) that prevented fishing operations
particularly in Camarines Norte, Catanduanes, Masbate and Sorsogon. Additionally, the slow
growth in the agricultural sector was mainly due to erratic weather conditions in the region
including the El Nino phenomenon.

Fig.9 Growth Rates of the Agricultural and Fisheries Sector in the Bicol Region

from 2007 to 2015

e.) Educational Attainment. In the Bicol Region, the highest poverty incidence based on
educational attainment were High School Undergraduates and below with 53.7%. High
School Graduates had 41.6%, College Undergraduates had 24.1% and College Graduates had
3.8% poverty incidences. This showed that the poor were more concentrated in those who
had reached a lower degree of education.
C.) Policies and Programs to Alleviate Poverty

a.) Pantawid Pamilyang Pilipino Program (4Ps). The 4Ps provided cash transfers
(CCT) to the poor on condition that their children must attend school and they would make
use of preventive health care, including reproductive health care and nutrition services. The
program aimed to reduce inter-generational poverty by providing health and education
services to children of poor families.

According to the National Anti-Poverty Program from 2010 to 2016 of the Aquino
Administration, there were 177,374 families in the Bicol Region who were included in the
beneficiaries of the Pantawid Pamilyang Pilipino Program, with an allocated budget of
almost 1.33 billion pesos. This constituted the 13.61% of total household beneficiaries across
the country. The Bicol Region was second to the Autonomous Region in Muslim Mindanao
(ARMM) which had 193,080 household beneficiaries, or 14.82%.

In 2012, the household-beneficiaries of 4Ps increased to 305,379 in the Bicol region. The
province of Camarines Sur had the highest number of beneficiaries with 99,619 while
Catanduanes had the lowest number of beneficiaries with 15,370. Following Camarines Sur
were Masbate with 77,272, Sorsogon with 53,726, Albay with 31,396, and Camarines Norte
with 27,996 beneficiaries.

The 4Ps had two types of cash grants that were given out to household-beneficiaries
health grant of P500 per household every month, or a total of P6,000 every year, and
education grant of P300 per child every month for ten months, or a total of P3,000 every
year. A household may register a maximum of three children for the program. These cash
grants are distributed to the household-beneficiaries through the Land Bank of the
Philippines or, if not feasible, through alternate payment schemes such as Globe G-Cash
remittance and rural bank transactions.

b.) KapitBisig Laban sa Kahirapan Comprehensive and Integrated Delivery of Social

Services Project (KALAHI-CIDSS). Since its commencement in 2003, KALAHI-CIDSS had
already placed 24 municipalities with 633 barangays in Bicol under its coverage. It funded a
 total of 667 community infrastructures such as water systems, school buildings, health and
day care centers, access roads and small bridges; and environmental and disaster control
infrastructure. These projects amounted to a total of about P779.7 million and benefited over
160,000 households in the region.

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