PM, Poverty Alleviation

Poverty Alleviation and
Economic Growth
Arturo G. Corpuz
OBJECTIVES
 To enhance knowledge: concepts of growth, poverty, growth

strategies and poverty alleviation strategies
 To enhance skills in analyzing province’s potential for and

constraints to growth and poverty alleviation
 To enhance skills leading to the design of development programs

for their province
Source: Based on Edillon, 2003

Economic Growth and Poverty
 Growth = increase in size
 Economic growth refers to a sustained increase in

production, usually measured in terms of per capita Gross
Domestic Product (GDP).
 Factors traditionally expected to lead to economic growth in

the Philippines
-- Large population
-- Strategic location
-- Long coastline
-- High literacy rate
Source: Edillon, 2003
• 2004 Phil pop (est) = 84 M

– Luzon 56%
Visayas 20%
Mindanao 24%
– 52:48 urban : rural

65:35 projected in 2030
– About 43 M urban pop
• 1995-2000 AGR = 2.36%

– Pop doubles in 29 years
• 1960-1995 Urban AGR = 4.2%

• Largest metro areas (> 1 M Pop):
-- Metro Cebu = 1.7M

-- Dasmarinas-Bacoor = 1.5
-- Malolos-Meycauayan = 1.4
-- Metro Antipolo = 1.3
-- Metro Davao = 1.2
-- Metro Angeles = 1.2
-- Calamba-San Pedro = 1.1
METRO/URBAN CENTER 2000 Pop 95-00AGR 2000 Population

PHILIPPINES 76,498,735 2.36%
METRO MANILA 9,932,560 0.99% Metro Areas > 250,000
1 Metro Cebu 1,693,881 3.36%
2 Dasmarinas-Bacoor 1,479,097 5.10%
Total = 17.3 M (outside NCR)
3 Malolos-Meycauayan 1,407,090 4.05% Luzon = 63%
4 Metro Antipolo 1,285,156 5.41%
5 Metro Davao 1,229,725 3.07%
6 Metro Angeles 1,219,399 3.08%
7 Calamba-San Pedro 1,053,854 5.15%
8 Metro Batangas/Lipa 679,810 3.46%
9 Metro Bacolod 615,944 0.75%
10 Zamboanga City 601,794 3.32%
11 Metro Dagupan 581,560 2.02%
12 Metro Iloilo 554,323 2.26%
13 Metro Cag de Oro 544,915 2.01%
14 Metro Cabanatuan 453,249 2.18%
15 Metro Lucena 435,070 2.08%
16 Metro Tarlac 430,318 2.78%
17 Metro Gen Santos 411,822 4.71%
18 Metro Baguio 405,420 1.45%
19 San Jose del Monte 315,807 9.41%
20 Metro Iligan 300,020 0.85%
21 Metro Tagum 276,770 2.49%
22 San Carlos-Malasiqui 267,454 2.61% Large Philippine population:
23 Butuan City
24 Metro Legazpi
267,279
258,041
1.58%
2.02%
• Cannot be ignored as a market
25 Metro Olongapo 257,279 1.67% • Production asset
26 San Mateo-Montalban 250,770 6.99%
Population Pyramid, 1960
Philippines (Yr 1960) Thailand (Yr 1960)
Female
Male Female Male

Population Pyramid, 2000
Philippines (Yr 2000) Thailand (Yr 2000)
Male Female Male Female

 Factors traditionally expected to lead to economic

growth in the Philippines
-- Large population: BUT WITH HIGH DEPENDENCY RATIO

-- Strategic location
-- Long coastline
The Philippines as a trade center of the Far East

“The best harbor . . . no equal as a coaling
station or naval and military base. . . . The
entrances are narrow, the shores bold, the
water deep, the bay landlocked, easily
defended from attack by sea or land, and the
fresh water supply ample. As it is just off the
trade route between Manila, China, and
Japan, it strategically commands Manila. It
is there that the Spanish government had
planned to place its principal naval arsenal in
the east. Already a great deal of money has
been expended, many buildings erected,
and much work done. A contract has been
made with an English company to construct
a floating drydock of 12,000 ton capacity;
some of the material has been delivered and
payments made.” (U.S. Congress, 1899)
The Philippine Bulletin,
New York, August 1913
“The Brussels-based International

Committee of the Red Cross and Red
Crescent described the Philippines as the
‘The Most Disaster-Prone Country in the
World’ based on statistics on the number of
victims in typhoons, earthquakes, volcanic
eruptions, floods, garbage landslide and
military action . . .” (August 2002)

-- Strategic location: BUT DISASTER-PRONE; LOCATION

IS NOT EVERYTHING
-- Long coastline
Coastline Trade Growth
• Trade: historically limited;

did not encourage port/
urban development
outside Manila
• Shipping industry did not

modernize
• Coastline advantage
eroded by technology
• Many small islands;

limited contiguous area;
integration obstacle


IS NOT EVERYTHING
-- Long coastline: DID NOT LEAD TO TRADE/GROWTH;

MANY SMALL ISLANDS; LIMITED
CONTIGUOUS AREA

1993 Primary School

Country Completion
Rate (%)
Philippines 70
Indonesia 77
Malaysia 96
Singapore 100
Thailand 87
China 85
Source: ADB, HDR, in Monsod, 1999
Children starting
school age (1997) No school
100 17
16
Finish Drop out
67 intermediate
level 55% of those entering
7 labor force will have at
most up to 1st year
Do not enter HS
60 Enter HS education
15
Drop out
45
(usually after
Finish HS 1st year)
Source: Based on Monsod and Monsod, 1999



IS NOT EVERYTHING
-- Long coastline: DID NOT LEAD TO TRADE/GROWTH;

MANY SMALL ISLANDS; LIMITED
CONTIGUOUS AREA
-- High literacy rate: BUT LOW LEVEL OF

EDUCATIONAL ATTAINMENT
 The Philippines has not experienced significant economic

growth in recent decades (flat growth 1980-2000).
GDP per capita, selected countries, 1980-2000 (1980=100)
CHINA
SKOREA
China
Kor ea, Rep.
Philippines
Thailand
THAI
PHIL
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
 Before 1980, average Filipino was richer than average Thai;

reversed since 1980.
Trend in per capita GDP, Philippines vs. Thailand, 1960-2000
THAI
P hilippine s
Tha ila nd
PHIL
1964 1969 1974 1979 1984 1989 1994 1999

 Lack of economic growth
-- Little improvement in quality of life

-- Poverty reduction is slow or does not take place
 Substantial/sustained economic growth leads to substantial

poverty reduction
-- For each 1% increase in average per capita income,

poverty rate declines by 2%
(elasticity of poverty to income = 2)
Economic Growth and Poverty Reduction (1990s)

Annual per Cap Poverty %
Eco growth (%) Pt Reduction
E Asia/Pacific 6.4 14.9

S Asia 3.3 8.4
Lat America/Carribean 1.6 - 0.1
Mid East/N Africa 1.0 - 0.1
Sub-Sahara Africa - 0.4 - 1.6
Central/East Europe - 1.9 -13.5
Source: HDR, 2003
Trend of Per Capita

Tre nd o f p e r GDP
c a pi t a GDP aand
nd po v e rt yPoverty
in c id e nc e
Incidence, Philippines, (base year = 1987)
1.25
Per Capita GDP

1.2
1.15
1.1
Per capita GDP

1.05
Pover ty Incidence
1
Poverty Incidence
0.95
0.9
0.85
1986 1988 1990 1992 1994 1996 1998 2000 2002
1987 2001
 The major causes of poverty in the Philippines:
> Lackluster economic Economic growth

performance of the country
> Inability to benefit from growth Distribution
> Vulnerability to shocks; the Social protection/

vulnerable become poor disaster mitigation
(1997-2000: Asian financial
crisis + El Nino = add 3 million
poor)
 Poverty reduction requires growth

Schools of Thought on Economic Growth
Classical (Adam Smith et al.)
 Wealth can grow only in so far as division of labor allows.
-- Specialization
-- Trade
-- Comparative advantage

Self sufficient
?
+ + =
?
+ + =
=
Specialization
Trade
What to trade? What to produce? Comparative

Advantage
-- Specialization
-- Trade
• Comparative—relative to another producer/trader

(competitor)
• General principle: produce commodity that is more
efficiently produced
• Comparative advantage > absolute advantage
> least disadvantage

-- Specialization
-- Trade
• Philippines losing comparative advantage in simple

labor-intensive production (China, Vietnam, Sri
Lanka, Bangladesh, India, Indonesia)
• True comparative advantage: relatively abundant
technical labor and mid-level management
• Need to focus on education/training, science, math,
english (college enrollment: sciences = 0.9%;
math/computer = 6.9%; business = 34.9%)
Source: Based on Edillon, 2003; G. Tecson 2001; E. Tan ,2001)

Income Ratio, Poverty Incidence, 2000

Region/ Ag:Non-Ag Avg Fam Poverty
Province Income Income Incidence
Ratio (pesos) (% )
NCR 0.01 300,304 5.70
Bataan 0.27 183,976 9.90

Bulacan 0.08 179,572 5.40
Nueva Ecija 0.90 121,995 27.30
Pampanga 0.16 160,827 14.40
Tarlac 0.44 113,087 27.60
Zambales 0.30 146,214 23.50
Davao del Norte 1.49 86,499 38.90

Davao del Sur 1.53 126,530 18.20
Davao Oriental 1.18 94,328 34.40
South Cotabato 1.00 140,100 37.30
Saranggani 1.75 73,294 48.00
Source: FIES, 2000
-- Specialization
-- Trade
 Philippine economic experience: non-growth due to the following:
-- Market constraints (lack of info/access)

-- Limited division of labor
-- Inefficient production processes
-- Trading constraints

Neo-Classical (Harrod-Domar)
 Economic growth is directly proportional to savings rate and

productivity of capital (efficiency)
-- low saving rate

-- low productivity of capital

Trend in Saving (GDS)

Trendand PerandCapita
in Saving Per CapitaGDP
GDP
(PCGDP), 1960-2000
40
GDS Thai
35
30
PCGDP Thai
25
GDS Phil
P CGDP ($ 100), P hilippine s
P CGDP ($ 100), Tha ila nd
20
GDS (%), P hilippine s
GDS (%), Tha ila nd
15
10
PCGDP Phil
5
1960 2000
Solow-Swan
 Capital is subject to diminishing marginal returns; less
developed countries will catch up with capital-rich
developed countries
-- Profit rates tend to be higher in LDCs because of cheaper input

costs (labor and raw materials)
-- Capital flows (investments) from DCs to LDCs, with technology

transfers
-- LDCs catch up and become NICs: costs rise (wage and input
cost increases) and profit rates decline
-- Capital from DCs and NICs flows to other LDCs

Solow-Swan
 Capital is subject to diminishing marginal returns; less

developed countries will catch up with capital-rich developed
countries
-- Low savings
-- Low investment rates
-- Minimal benefit from technological advances of richer countries
-- Population problem:
-- Low savings and high population growth rate mean capital per
worker diminishing
-- 1985-2000, poverty incidence declined from 40.9% to 27.5% but
absolute number of the poor increased by almost 1.4 million
-- Very high dependency ratio
Family Size Total # of Income (pesos) Ratio to

Families Avg/Family Avg/Person 5 persons
North Cotabato
1 person 7,982 37,567 37,567 2.27
2 persons 9,900 61,446 30,723 1.86
3 persons 24,081 77,325 25,775 1.56
4 persons 30,984 80,363 20,091 1.22
5 persons 38,186 82,672 16,534 1.00
6 persons 30,161 95,977 15,996 0.97
7 persons 21,975 101,091 14,442 0.87
Avg income/
8 persons 11,432 84,635 10,579 0.64
family member is
9 persons 9,321 76,488 8,499 0.51
about half of 5-
Lanao del Sur
person family
1 person 1,358 54,171 54,171 3.29
2 persons 2,894 57,117 28,559 1.73
3 persons 7,112 79,668 26,556 1.61 Avg income/
4 persons 15,446 86,496 21,624 1.31 family member is
5 persons 18,741 82,332 16,466 1.00 about 1/3 more
6 persons 21,158 82,117 13,686 0.83 than 5-person
7 persons 17,485 79,914 11,416 0.69 family
8 persons 11,277 98,433 12,304 0.75
9 persons 2,677 80,886 8,987 0.55
Source: FIES 2000
Endogenous Growth
 Returns to capital need not diminish as capital stock increases;

emphasis on quality not quantity of investments

-- Lack of R & D
• UNESCO science manpower critical mass = 380/one million
population
• Philippines = 60/one million population
• Philippines has largest tertiary education system in East Asia
outside Japan but has lowest scientist publications (ISI Journals,
1994-95)
• DOST budget = 3.2% national budget (18% goes to R&D)
Source: Based on Edillon, 2003, M.J. Abrenica, 2001; E. Tan, 2001)

R&D Employment, R&D Expenditure/GDP

Country Scientist / R&D
Engineers Expenditures
per million pop per GDP (1996)
Philippines 60 0.1
Singapore 2,512 1.1
Korea 2,636 2.8
Taiwan 1,669 1.7
Malaysia 87 0.4
Thailand 173 0.2
China 1,993 0.6
Indonesia 181 0.2
Source: UNESCO in E. Tan, 2001)
Endogenous Growth
 Returns to capital need not diminish as capital stock increases;

emphasis on quality not quantity of investments

-- Lack of R & D
-- Insecure property rights
-- Weak institutions
-- Failure (of government) to encourage innovation
Source: Based on Edillon, 2003)

Measures and Factors of Poverty
Growth, Development, Welfare

 Growth = increase in size
> Economic growth refers to a sustained increase in production,
usually measured in terms of per capita GDP.
 Development: advance/expand to a more complex or

complete form; improve
> E.g. hunting/gathering > agriculture > industry > services
> Higher level of satisfaction for society
 Welfare: state or condition of doing or being well (Oxford)

> Theory of utility, i.e. condition or level of satisfaction
(per capita income is not everything).
 Social welfare in development context
> Welfare of society is brought to higher level

> E.g. Lifting members of society from poverty
 Social welfare function

> Description of a desired type of welfare in a society;
benchmark for evaluating welfare impacts (e.g. poverty
alleviation projects)
Forms of Social Welfare Function
 Average welfare level Ignores distribution; not

 The greater good for the greater concerned whose welfare is
number (democratic principle) improved (whether rich or poor)
 Prioritarianism: higher weight to

welfare of the disadvantaged
 Sufficientarianism: welfare of every Current concept of poverty and

individual is at least equal to some its measures (e.g. food
minimum consumption, RDA)
 Equality in capabilities: each HDI concept (life expectancy,

individual is endowed with same knowledge, income)
capabilities to do/be what he wishes

Definition of Poverty: A State of Being
 Lack of income (means) necessary to consume a basic bundle

of goods and services; or
 Shortfall in consumption of a basic bundle of goods and

services necessary to do basic functions (outcomes);
 Subjective valuation (perceptions)
Measures of Poverty
 Means-based
 Outcome-based
 Perception-based
Means-based Outcome-based
 Incidence  Human Development Index
-- Poverty  Human Poverty Index
-- Subsistence  Capability Poverty Measure
 Gap (Depth)  Gender-related Development
-- Poverty Index
-- Income  Gender Empowerment
Measure
 Severity
 Poverty Threshold
 Food Threshold
 Gini Ratio
 $1/day Poverty Line

Means-based
 Poverty: Inability to acquire basic needs for decent quality of life
 Poverty Incidence (%): E.g. Philippines = 28.4%
> Percent of families (or individuals) whose incomes fall

below the Poverty Threshold as defined by NEDA and/or
cannot afford in a sustained manner to provide their basic needs
of food, health, education, housing and other amenities of life
Cost of basic food &

Families (or population) with per capita income
non-food reqmts =
less than the per capita poverty threshold P11,605/year per cap
--------------------------------------------------------------- P4,835/month per fam
Total number of families (population)
Source: NSCB
Poverty Incidence, Official Estimates

Country GNP per Poverty
Capita Incidence
(US$) (Approx %)
Philippines 950 40 1994
Indonesia 880 15 1990
Sri Lanka 640 27 early 1990s
China 530 15 1990-1994
Paskistan 430 25 early 1990s
India 320 34 early 1990s
Bangladesh 220 40 early 1990s
Viet Nam 200 20 1993
Source: Monsod and Monsod, 1999
Means-based
 Subsistence Incidence (%): E.g. Philippines = 13.1%
> Percent of families (individuals) whose incomes

fall below the Food Threshold
Families (or population) with per capita income Cost of food

less than the per capita Food Threshold required to satisfy
--------------------------------------------------------------- nutritional reqmts
Total number of families (population) = P7,829
(Philippines 2000)
Source: NSCB
Avg income shortfall of

Means-based families is 18.5%
 Poverty Gap (%): E.g. Romblon = 18.5%
> Measure of amount needed to eradicate poverty
Total income shortfall of families below poverty

threshold (expressed in proportion to the poverty line)
------------------------------------------------------------------------ Measures
Total number of families of depth
of poverty
 Income Gap (%): E.g. Mt Province = 38.0%
> Measure of amount needed by poor families to

eradicate poverty
Total income shortfall of families below poverty
threshold (expressed in proportion to the poverty line) Avg income shortfall of
----------------------------------------------------------------------- poor families is 38.0%
Total number of poor families
Source: NSCB
Poverty more severe in

Means-based Masbate
 Severity of Poverty (%): E.g. Masbate = 10.1%

Saranggani = 9.7%
> Measure of inequality among the poor

Total of squared income shortfall of families below poverty
threshold (expressed in proportion to the poverty line)
----------------------------------------------------------------------------
Total number of families
 Gini Ratio: 1=perfect

equal
> Measure of inequality in income distribution 0=perfect
(all families/individuals) unequal
Source: NSCB
Means-based
 Poverty Incidence
 Subsistence Incidence
 Poverty Gap Every three years
Official poverty statistics
 Pre-2003: national
Income Gap (FIES)
regional
 Severity of Poverty Since 2003: plus
 Gini Ratio provincial
 Poverty Threshold Annual
 Food Threshold
 $1/day Poverty Line (WB): amount in pesos needed to

buy a basket of goods and services that $1 would buy in
the US
Source: NSCB
Outcome-based
 Human Development Index (HDI)
Composite of development outcomes:

-- Health: life expectancy
-- Knowledge: functional literacy
-- Standard of living: per capita income
 Human Poverty Index (HPI)
Composite of poverty outcomes:

-- Short life: % of people expected to die before 40
-- Lack of education: % of adults illiterate
-- Lack of access to resources: % of people w/o
access to health services & safe water, and & %
of underweight children under 5
Outcome-based
 Capability Poverty Measure (CPM)
-- Early version of HPI
 Gender-related Development Index (GDI)
-- HDI adjusted for gender inequality
 Gender Empowerment Measure (GEM)
-- Measures gender inequality in key areas of economic and

political participation

Means-based Outcome-based
 Poverty Incidence  Human Development Index
 Subsistence Incidence  Human Poverty Index
 Income Gap  Capability Poverty Measure
 Poverty Gap  Gender-related Development
 Severity of Poverty Index
 Poverty Threshold  Gender Empowerment
 Food Threshold Measure
 Gini Ratio
 $1/day Poverty Line

Means-based
 Poverty incidence: gives the proportion of the poor

-- simple but assumes uniform distribution of poor
-- does not account for improvement within poor
 Poverty gap: average income shortfall

-- shortfall = 0 if non-poor
-- total amount to eradicate poverty
-- easy to understand but also does not account for distribution
 Severity of poverty: average of the squared income gap of the

poor
-- assigns higher weights to the poorer among the poor
-- not easy to estimate or understand

Regional
Poverty Statistics, 2000
Region Incidence Gap (Depth) Severity
(%) Rank (%) Rank (%) Rank
NCR 5.5 1 0.9 1 0.2 1
Region 1 20.3 5 4.2 4 1.3 4
Region 2 29.9 9 6.8 8 2.3 7,8
Region 3 16.1 2 3.1 2 0.9 2
Region 4 19.5 3 4.8 5 1.7 5
Region 5 53.3 15 15.8 15 6.3 15
Region 6 28.1 8 6.4 7 2.1 6
Region 7 39.4 12 11.8 12 4.8 12
Region 8 46.8 13 14.2 13 5.8 13
Region 9 47.0 14 14.3 14 6.0 14
Region 10 27.3 7 7.1 9 2.6 9
Region 11 25.4 6 6.3 6 2.3 7,8
Region 12 38.0 11 9.5 11 3.4 11
CAR 19.8 4 4.1 3 1.2 3
ARMM 60.7 16 19.3 16 8.0 16
Caraga 33.8 10 8.2 10 3.0 10
Percent (Year 2000)
10
20
30
40
50
60
70
0
NCR
Region 1
Region 2
Region 3
Region 4
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10
Region 11
Region 12
CAR
ARMM
Caraga
Depth
Severity
Incidence
Regional Poverty Statistics
Poverty Poverty Threshold
Incidence (%) (Pesos)
Philippines 28.4 Philippines 11,605

NCR 5.7 NCR 15,678
Region III 17.0 Region III 13,843
Region IV 20.8 Region IV 13,414
Region II 24.8 CAR 13,176
Region I 29.6 Region I 12,766
CAR 31.1 ARMM 12,753
Region XI 31.5 Region VI 11,553
Region VII 32.3 Region V 11,524
Region X 32.9 Region II 11,077
Region VI 37.8 Region XII 11,019
Region VIII 37.8 Caraga 10,605
Region IX 38.3 Region XI 10,568
Caraga 42.9 Region X 9,881
Region XII 48.4 Region VII 9,791
Region V 49.0 Region VIII 9,623
ARMM 57.0 Region IX 9,298
Source: NSCB
Regional Poverty Statistics
Poverty Poverty Threshold Subsistence Food Threshold
Incidence (%) (Pesos) Incidence (%) (Pesos)
Philippines 28.4 Philippines 11,605 Philippines 13.1 Philippines 7,829

NCR 5.7 NCR 15,678 NCR 0.7 NCR 9,561
Region III 17.0 Region III 13,843 Region III 4.0 CAR 8,873
Region IV 20.8 Region IV 13,414 Region IV 8.1 Region III 8,797
Region II 24.8 CAR 13,176 Region II 9.3 Region IV 8,682
Region I 29.6 Region I 12,766 Region I 11.5 ARMM 8,611
CAR 31.1 ARMM 12,753 CAR 14.2 Region I 8,609
Region XI 31.5 Region VI 11,553 Region XI 14.6 Region V 8,276
Region VII 32.3 Region V 11,524 Region X 15.0 Region VI 8,109
Region X 32.9 Region II 11,077 Region VII 17.0 Region XII 7,714
Region VI 37.8 Region XII 11,019 Region VI 18.4 Region II 7,526
Region VIII 37.8 Caraga 10,605 Region VIII 19.8 Caraga 7,492
Region IX 38.3 Region XI 10,568 Region IX 20.4 Region XI 7,164
Caraga 42.9 Region X 9,881 Caraga 23.4 Region VIII 7,162
Region XII 48.4 Region VII 9,791 Region XII 25.5 Region X 6,897
Region V 49.0 Region VIII 9,623 ARMM 27.2 Region VII 6,760
ARMM 57.0 Region IX 9,298 Region V 27.8 Region IX 6,586
Source: NSCB
Provincial Poverty Statistics
Poverty Poverty Thresholds Subsistence Food Threshold

Incidence (%) (Pesos) Incidence (%) (Pesos)
Ten Poorest Ten Highest Ten Poorest Ten Highest

Sulu 63.2 NCR 15,678 Masbate 42.6 Mt. Province 10,112
Masbate 62.8 Batangas 15,305 Sulu 34.2 NCR 9,561
Tawi-tawi 56.5 Mt. Province 15,285 Romblon 33.7 Rizal 9,487
Ifugao 55.6 Cavite 14,965 Ifugao 32.7 Batangas 9,484
Romblon 55.2 Rizal 14,787 Maguindanao 31.2 Cavite 9,457
Maguindanao 55.1 Nueva Ecija 14,755 Saranggani 30.9 Nueva Ecija 9,392
Lanao del Sur 55.0 Pampanga 14,713 Lanao del Norte 30.5 Pampanga 9,336
Sultan Kudarat 54.3 Oriental Mindoro 14,531 Zamb Norte 30.4 Batanes 9,073
Camiguin 53.1 Benguet 14,185 Agusan del Sur 29.7 Sulu 9,062
Camarines Norte 52.7 Lanao del Sur 13,986 Camarines Norte 28.7 Oriental Mindoro 9,022
Bulacan 13,881
Ten Least Poor Ten Lowest Ten Least Poor Ten Lowest
2nd District NCR 4.1 Western Samar 9,574 Batanes 4.1 Bohol 6,329
4th District NCR 4.9 Eastern Samar 9,516 2nd District NCR 4.9 Zamb Sur 6,501
Bulacan 5.4 Zamb Sur 9,404 4th District NCR 5.4 Siquijor 6,519
1st District NCR 5.8 Basilan 9,271 1st District NCR 5.8 Bukidnon 6,561
Batanes 7.5 Northern Samar 9,166 Bulacan 7.5 Negros Oriental 6,602
Rizal 8.0 Bohol 9,125 Bataan 8.0 Zamb Norte 6,678
Laguna 8.6 Zamb Norte 9,090 Rizal 8.6 Davao del Sur 6,846
3rd District NCR 9.0 Bukidnon 8,982 Cavite 9.0 Northern Samar 6,863
Bataan 9.9 Siquijor 8,966 Laguna 9.9 Basilan
Misamis 6,919
Cavite 10.2 Negros Oriental 8,940 3rd District NCR 10.2 Occidental 6,991
Provincial Poverty Statistics
Poverty Poverty Severity of

Incidence (%) Gap (%) Poverty (%)
Ten Poorest Ten Biggest Ten Highest

Sulu 63.2 Masbate 22.6 Masbate 10.1
Masbate 62.8 Saranggani 19.4 Saranggani 9.7
Tawi-tawi 56.5 Maguindanao 19.1 Mt. Province 9.3
Ifugao 55.6 Lanao del Norte 18.8 Lanao del Norte 9.0
Romblon 55.2 Mt. Province 18.6 Maguindanao 8.7
Maguindanao 55.1 Romblon 18.5 Zamb Norte 8.7
Lanao del Sur 55.0 Ifugao 18.2 Romblon 8.2
Sultan Kudarat 54.3 Abra 17.5 Abra 8.2
Camiguin 53.1 Camarines Norte 17.4 Ifugao 7.9
Camarines Norte 52.7 Zamb Norte 17.2 Oriental Mindoro 7.7
Ten Least Poor Ten Smallest Ten Lowest

2nd District NCR 4.1 Batanes 0.6 Batanes 0.1
4th District NCR 4.9 2nd District NCR 0.7 2nd District NCR 0.2
Bulacan 5.4 4th District NCR 0.9 4th District NCR 0.3
1st District NCR 5.8 Bulacan 1.1 Bulacan 0.3
Batanes 7.5 1st District NCR 1.2 Bataan 0.4
Rizal 8.0 Rizal 1.5 1st District NCR 0.4
Laguna 8.6 Bataan 1.5 Rizal 0.5
3rd District NCR 9.0 Laguna 1.7 Laguna 0.5
Bataan 9.9 3rd District NCR 2.1 Cavite 0.7
Cavite 10.2 Cavite 2.2 3rd District NCR 0.7
Location and Time Dimensions
 Absolute vs. Relative Poverty

-- In measuring absolute poverty the benchmark does not
change regardless of the locality, except with respect to
prices. In measuring relative poverty, meanwhile, the
benchmark varies according to the locality.
-- Reducing incidence of absolute poverty is more relevant
Percent
0
10
20
30
40
50
60
NCR 70
Region 1
Region 2
Region 3
Region 4
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10
Region 11
Region 12
CAR
ARMM
Caraga
Poverty
Poverty
Relative
Absolute
Location and Time Dimensions

 Absolute vs. Relative Poverty
-- In measuring absolute poverty the benchmark does not
change regardless of the locality, except with respect to
prices. In measuring relative poverty, meanwhile, the
benchmark varies according to the locality.
-- Reducing incidence of absolute poverty is more relevant
 Chronic vs. Transient Poverty
-- Chronic poverty is when the state of poverty has prevailed for
a very long time. Transient poverty is when the state of
poverty is only temporary.
Causes of Poverty in the Philippines
 Unsustained economic growth (or lack of economic growth)
 Inability to benefit from economic growth
 Vulnerability to shocks
• Rural sector accounts for ¾ of poverty

-- Agri sector is biggest contributor (about 80%) to poverty
• Poverty alleviation needs understanding of rural sector including

responses of rural areas to growth stimuli
-- How important are rural conditions to poverty?
Significance of Poverty Variables

Explanatory
Variable Incidence Gap (Depth) Severity
Functional literacy
Land inequality
Farm size
Tenancy
Agri terms of trade
Irrigation
Road wealth
Electricity
Macro eco/pol
Source: Based on Balisacan 1999
Factors affecting Poverty:

 GROWTH
 Education (complemented by infrastructure)

 Policy environment (e.g. agriculture terms of trade)
 Investment in land quality/productivity (e.g. irrigation)
 Agrarian reform
 Governance (political dynasties hurt the poor)
 Transportation (high transport costs are poverty traps)
 Source of growth
Source: R. Edillion, “Framework on Growth and Development,” Asia-Pacific Policy Center, Training Manual.
Approaches and Policy Responses to Poverty
Cycle of Poverty Determinants
Quality of labor, land, capital

Education
Employment
Health
Income
Access to
goods/services Nutrition
Economic Growth
Poverty: Inability to acquire the basic needs for a decent quality of life
Economic Growth
 Classical approach:
• Increase specialization
• Increase trade
 Neoclassical approach:
• Increase savings
• Increase investments (on productive activities)
 Endogenous growth approach:
• Increase knowledge
• Increase innovation
Cycle of Poverty Determinants

Education
Employment
Access to private Health
Income goods/services
Nutrition
Access to public
goods/services
Public transfer
& subsidy Peace and
order
Delivery Population
mechanism & Political
public spending participation
Source: DILG, NEDA, NAPC, UNDP, Guidebook on Local Poverty Diagnosis and Planning, 2002
International Institution Responses
 1970: UN War on Poverty
 1974: WB Redistribution with Growth
 1980s: ILO World Employment Program
 1990: WB World Development Report focus on poverty

through three fronts:
-- labor intensive economic growth
-- development of human resources (education, health,
nutrition) of poor
-- social safety nets
 1999: ADB 3 pillars strategy

ADB: Three Pillars
 Pro-poor economic growth
 Social development
 Good governance
1 Pro-Poor Economic Growth

 Economic growth
> Generates employment and income; necessary for

eliminating or reducing poverty
> But may be biased against poor Pro-poor Growth Index
> Pro-poor growth; priority to: S Korea = 1.14 (1994-95)

Laos = 0.21 (1992-98)
-- Labor intensive activities Philippines = 0.67 (1994-97)
-- Employment creation Thailand = 0.64 (1994-96)
-- Increased labor mobility Vietnam = 0.87 (1992-98)
-- Enhanced credit access for Source: E. Pernia, ADB, ERD Policy Brief, 2003
SMEs
-- Other measures that remove
anti-poor biases
2 Social Development
 Strategies that target basic social services for the poor
-- Human capital development (e.g. education, training)

-- Social protection (e.g. insurance, peace and order)
-- Population program
3 Good Governance
 Necessary to carry out pro-poor growth/social development activities
-- Reduced corruption
-- Greater accountability
-- Increased participation
-- Sound macroeconomic management
Overall Approach
 Broad-based labor-intensive and inclusive growth
 Good governance and accountability
 Human and social development
 Social protection
 Special poverty alleviation policies or direct anti-poverty

interventions such as land reform, micro credit, public
employment schemes
Source: A. Deolalikar et al., “Poverty Reduction and the role of institutions in developing Asia,” ADB, May 2002.
Social Reform and Poverty Reduction Act (RA 8425)

(KALAHI: Policy framework to address poverty in the Philippines)
Asset Reform Increased Employment & Improved Access to Human
Livelihood Opportunities Development Services

Education
Employment
Access to private Health
Income goods/services
Nutrition
Access to public
goods/services
Public transfer Increased Social Protection
& subsidy Peace & and Security from Violence
order
Delivery Population
mechanism &
public spending
Political Enhanced Participation in
participtn Governance and Institution
Building
Local Government Role in Poverty Reduction
 Local Government Code of 1991
 DILG Memorandum Circular No. 2001-109 (August 21, 2001):

Enjoined all LCEs to undertake local poverty reduction
programs and to formulate LPRAA (Local Poverty Reduction
Action Agenda)
 DILG Memorandum Circular No. 2001-105 (August 31, 2001):

Called for identification of LPRAO (Local Poverty Reduction
Officers) in all municipalities, cities, and provinces
 What is role of provincial LGUs in the goal of promoting growth

and reducing poverty?
– Provide link between national government and municipal and

(component) city LGUs
– Bring together merits of the top-down and bottom-up approaches

to governance
– Ensure that municipal/city development plans form coherent

strategy towards goal of provincial development; at the same
time, consistent with national goals

Integrating Poverty Reduction in Provincial Development Planning
Planning Process
Local Planning Vision
Context Objectives
Situationer
Economic Dev Poverty Profile/ Planning analysis
Analysis/Plan Analysis Strategies
Anti-poverty Projects
instruments programs
Organization & Plan

Implementation implementation
Economic Growth
 Increase specialization and trade
 Increase savings and investments (on productive activities)
 Increase knowledge and innovation
 Income and employment creation  Population

-- Increase productivity  Activity (Industries)
-- Reduce cost
 Location (Economic
-- Increase growth potential
-- Reduce risk areas)
Source: R. Edillion, “Framework on Growth and Development,” Asia-Pacific Policy Center, Training Manual.; R. Neri, 2004
Basic Approach
 Population-Activity-Location
-- Population distribution
-- Production: major income/value-generating, employment
activities
-- Consumption: market centers, expenditure items, access to services
-- Location/spatial distribution as an inherent factor
 Analysis
-- Existing levels
-- Trends
-- Comparative benchmarks
-- Significance: strategic importance
Strategic Questions
 Are current conditions/trends acceptable? (Access to jobs, markets, services)
What are the gaps? What will happen if they continue?
 What are the development drivers (supply/demand)? How do they affect

current conditions/trends? External? Internal?
 What industries/sectors are doing well? Promising? Not doing well?
 Given trends and drivers, what are likely scenarios for these industries? What
industries/sectors should be encouraged? Discouraged? Competition?
 What should be done to promote these industries/sectors? What are
the obstacles? What are the tradeoffs?
 What industries/sectors?
-- Consistent with the region’s competitive advantages
-- Already established but not as competitive as in the past but still
generate substantial employment/income benefits to region
-- Support the first two types (e.g. transport, telecom, housing)
Economic Dev Poverty Profile/

Analysis/Plan Analysis
Understand the Economy Understand the Poor

 Economic sectors/activities  Poverty Profile
-- Production, employment, -- Official poverty stats
other economic data (compare w/ other provinces/
(compare w/ other provinces/ rest of country)
rest of country) ETC/S -- Other poverty indicators (13),
 Potentials, comparative LPRAPs, local profiles
advantages  Obstacles to increased income/
 Obstacles to growth access to goods & services
Economic activities of the poor
Involvement of poor in economy

Population, Population Growth Rate, Population Density,
CAR, by province, 1990-2000
1990 Pop 2000 Pop 2000 1990- Land Land 2000
Area Pop% 2000 Area Area% Pop
APGR (sqkm) Den
CAR 1,142,814 1,365,220 100% 1.79 18,294.2 100.00% 75
Abra 184,743 209,491 15% 1.27 3,975.6 21.73% 53

Apayao 74,607 97,129 7% 2.67 3,927.9 21.47% 25
Benguet 485,857 582,515 43% 1.83 2,655.4 14.51% 219
Kalinga 133,791 174,023 13% 2.66 2,517.8 13.76% 69
Ifugao 147,281 161,623 12% 0.93 3,119.7 17.05% 52
Mt. Prov 116,535 140,439 10% 1.88 2,097.3 11.46% 67
Source: NSO
Population Density
1970 1980 1990 2000

Annual Population Growth Rate
1970-1980 1980-1990 1990-2000

1980
Population Density
1990 2000
Annual Population Growth Rate
1980-1990 1990-2000
1980, 1990, 2000 Standard Distances
Figure 13. GDP Regional Shares 2000
40% 35.7%
30%
20% 13.9%
10% 7.4% 6.5% 6.8% 5.9%

2.3% 3.1% 2.1% 2.7% 2.5% 2.5% 3.5% 2.6% 1.0% 1.5%
0%
Ilocos
Bicol
NCR
CAR
Cag Valley
C Vis
E Vis
W Vis
C Luzon
S Luzon
Caraga
S Min
N Min
C Min
W Min
ARMM
Figure 14. GVA: Services 2000
50% 45.0%
40%
30%
20%
11.1%
10% 6.8% 6.2% 7.6% 4.7%
1.3% 2.9% 1.6% 2.8% 1.9% 1.9% 2.9% 1.6% 0.7% 1.0%
0%
Ilocos
Bicol
NCR
CAR
ARMM
Cag Valley
N Min
Caraga
C Luzon
S Luzon
W Min
S Min
C Min
W Vis
C Vis
E Vis
Figure 15. GVA: Agri/Fish/Forestry 2000
25%
19.2%
20%
15% 11.8%
10.2%
8.8%
10% 6.5% 6.2% 6.5%
4.6% 4.6% 3.9% 4.6% 4.9%
5% 2.0%
3.1% 3.1%
0.0%
0%
Ilocos
Bicol
NCR
CAR
ARMM
Cag Valley
C Luzon
S Luzon
W Min
N Min
C Min
Caraga
S Min
W Vis
C Vis
E Vis
Figure 32. Livestock Inventory (Number of Head), by Type
and Region, 1998
2,000,000
1,500,000
1,000,000 Swine
Goat
500,000
Cattle
0 Carabao
W Vis
Ilocos
C Vis
E Vis
Bicol
Cagayan
C Luzon
S Tag
W Mind
Caraga
CAR
N Mind
S Mind
C Mind
ARMM
Figure 33. Poultry Inventory (Number of Head) by Type and
Region, 1998
16,000,000
14,000,000
12,000,000
10,000,000 Chicken
8,000,000
6,000,000 Duck
4,000,000
2,000,000
0
W Vis
W Mind
Ilocos
C Vis
E Vis
Bicol
C Luzon
S Tag
N Mind
C Mind
Caraga
ARMM
S Mind
CAR
Cagayan
Figure 17. GVA: Mining/Quarry 2000
30% 25.4%
20% 17.3%
13.5%
10.3% 9.2%
10% 6.2% 6.3%
2.2% 1.2% 1.1% 1.5% 2.8% 2.8%
0.0% 0.2% 0.0%
0%
Ilocos
Bicol
NCR
CAR
ARMM
N Min
C Min
Caraga
Cag Valley
C Luzon
S Luzon
W Min
S Min
W Vis
C Vis
E Vis
Figure 16. GVA: Manufacturing 2000
50% 43.1%
40%
30%
20% 16.1%
7.9%
10% 3.3%
5.3% 6.3%
2.4% 1.1% 4.5% 4.4% 3.4% 0.2% 0.9%
0.7% 0.3% 0.2%
0%
Ilocos
Bicol
CAR
NCR
ARMM
Cag Valley
N Min
C Luzon
S Luzon
W Min
S Min
C Min
Caraga
E Vis
W Vis
C Vis
Figure 20. GDP Sectoral Shares 2000
Service 53%
Elec/Gas/Wat 3%
Constn 5%
Mfg 23%
Mining 1%
Ag/Fish/For 16%
0% 10% 20% 30% 40% 50% 60%
Figure 21A CAR GRDP Sectoral Shares 2000
Service 30%
E/G/W 6%
Constn 12%
Mfg 32%
Mining 7%
Ag/Fish/For 14%
0% 5% 10% 15% 20% 25% 30% 35%

Service 30%
E/G/W 6%
Constn 12%
Mfg 32%
Mining 7%
Ag/Fish/For 14%
0% 5% 10% 15% 20% 25% 30% 35%
Figure 21. C Luzon GRDP Sectoral Shares 2000
Service 48%
E/G/W 4%
Constn 4%
Mfg 24%
Mining 0%
Ag/Fish/For 19%
0% 10% 20% 30% 40% 50% 60%

Value of Exports Monitored, by Industry Sector, BEPZ,
FOB Million US$, 1995-1998.
1995 1996 1997 1998
Total BEPZ Exports 588 731 508 0
INDUSTRY SECTOR
Fashion Acc/Leather 1.2 1.4 2.5 1.1
Houseware 0.02 0 0.04 0.04
Garments/Textile 2.5 3.5 4.7 0.8
Other Consumer Mfrs 0.4 0.4 0.2 0.2
Industrial Mfrs 359 573 712 497

Source: BETP/DTI
Resource-based 0.05 0.14 0.06 0.1
Figure 30. Visitor Arrivals, by type of Visitor and Region, Jan-
Sep 2001
900,000
800,000 14.4% 15.0%
700,000
600,000 10.8%
9.3%
Domestic
500,000 8.0% 7.6%
400,000 7.3% Overseas
300,000 4.9% 4.6% 4.5% 4.0%
Foreign
3.7% 3.5%
200,000 2.4%
100,000
0
W Visayas
C Visayas
E Visayas
Bicol
S Tagalog
Ilocos
Cagayan
C Luzon
W Mindanao
C Mindanao
Caraga
N Mindanao
S Mindanao
CAR
• Strengths
-- Established tourism destination; tourism potential expansion
-- Unique physical characteristics/scenic beauty
-- Mining tradition and potential
-- Manufacturing/BEPZ?
-- SMEs
-- Agriculture? Fruits and vegetables? Cash crops?
-- Labor productivity?
• Weaknesses
-- Limited external and internal linkages (road, air); still dependent on
Metro Manila link/market
-- Relatively difficult access to services
-- Dependence on external provinces for exports (port and airport)
-- Physical environmental threat to tourism, and of tourism (also of mining)
-- Basic service gaps (water, power, education, health)?
-- Declining agriculture? Threat to tourism?
-- Poor land use management
-- Physical constraints on horizontal development
Strategies
• Improve access/linkages:
– With Regions 1 and 2 (ports, airports, domestic/foreign markets)

– With NCR domestic/foreign market (NLE extension to Tarlac/Rosario)
– Lateral/internal (strategic e.g. Banaue-Bontoc)
• Protect and expand tourism market (e.g. environmental integrity of traditional

destinations, New Baguio?)
• Hi-tech, environment-friendly mining?
• Industrial development: increase/improve services to BEPZ

(retention/expansion strategy); cluster development; niche industries? IT?
• Education center (including tourism, upland agriculture research, IT-based?)
• Process streamlining/remove transaction obstacles
• Enhance/ensure security (image?)



Economic activities of the poor
Involvement of poor in economy

Poverty Profile: Province
• NSO data can be used as a basis for the poverty profile. These
surveys contain information that can proxy for “quality of life.”
> FIES (Family Income and Expenditure Survey)

> APIS (Annual Poverty Indicator Survey)
> LFS (Labor Force Survey)
• Some provinces conduct their own data collection. These are

mostly information on the Minimum Basic Needs (MBN).
• In general the available information about poverty at the sub-

provincial level is minimal.

Local Poverty Profile: Municipality/Barangay
Area/Dimension Indicator of Poverty
SURVIVAL Health 1 Ratio of children 0-5 yrs who died to sum of

children aged 0-5 yrs
Nutrition 2 Ratio of children aged 0-5 yrs mal-
nourished to total children 0-5 yrs
Access basic amenities 3 Ratio of HH w/o access safe water
4 Ratio of HH w/o access sanitary toilet
SECURITY Shelter 5 Ratio of HH squatting
6 Ratio of HH living in makeshift housing
Peace and order 7 Ratio of HH w/ members crime victims
ENABLING Income 8 Ratio of HH income < poverty threshold
9 Ratio of HH income < food threshold
10 Ratio of HH eat < 3 meals/day
Employment 11 Unemployment rate
Education 12 Elementary participation rate
13 Secondary participation rate
Source: Guidebook, 2002
Figure 20. GDP Sectoral Shares 2000
Service 53%
Elec/Gas/Wat 3%
Constn 5%
Mfg 23%
Mining 1%
Ag/Fish/For 16%
0% 10% 20% 30% 40% 50% 60%
Service 30%
E/G/W 6%
Constn 12%
Mfg 32%
Mining 7%
Ag/Fish/For 14%
0% 5% 10% 15% 20% 25% 30% 35%

Figure 24. National Employment Shares by
Industry Group, 2000
Com/Soc/Pers
20.3%
Agri/Fish/Forestry
Fin/Ins/RE/Bus 37.5%
2.4%
Transpt/Stor/Com Mining/Quarrying
7.3% 0.4%
Wholesale/Retail
Manufacturing
16.5%
10.1%
Construction
5.2% Elect/Gas/Water
0.4%
Figure 25A. Employment Shares by Industry

Group, CAR, 2000
Fin/Ins/RE/Bus Com/Soc/Pers
1% 18%
Transpt/Stor/Com
5%
Wholesale/Retail
Agri/Fish/Forestry
8%
56%
Construction
5%
Elect/Gas/Water
0% Manufacturing
Mining/Quarry ing
4%
3%
Figure 27. Employment of Manufacturing Firms, 10+ Workers,
by Region, 1995
500,000 49.3%
450,000
400,000
350,000
300,000
250,000
21.1%
200,000
150,000
100,000 7.0% 8.7%
50,000 2.9% 2.2% 3.1%

0.5% 0.8% 0.3% 0.6% 0.5% 0.8% 0.8% 1.1% 0.4%
0
S Tagalog
Cagayan
Caraga
C Luzon
Ilocos
Bicol
W Visayas
E Visayas
W Mind
S Mind
C Visayas
N Mind
C Mind
CAR
ARMM
NCR
Figure 28. Value of Output (Pbillion) of Manufacturing Firms,

10+ Workers, by Region, 1995
450 40.5%
400
350
300 26.9%
250
200
150
9.7%
100
4.9%
50 2.1%
0.9% 0.2% 0.5%
2.2% 3.0%
0.6%
2.6% 2.8% 2.2%
0.8% 0.1%
0
S Tagalog
Cagayan
C Luzon
Caraga
Ilocos
Bicol
W Visayas
E Visayas
S Mind
W Mind
C Visayas
N Mind
C Mind
CAR
ARMM
NCR
Employment Status (X1000),
Selected Regions, 2002
Metro CAR Reg 3 Reg 4 Reg 7
(2003)
Status Manila
HH Pop 15+ 7,241 912 5,144 6,240 3,651
Labor Force 68.1% 70.2% 64.8% 64.8% 69.0%
Participation Rate
Unemployment 20.3% 10.5% 15.0% 13.7% 15.4%
Rate
Underemployment 12.0% 17.1% 12.7% 11.3% 15.4%
Rate (% of Employed)
Source: 2003 NSCB
Annual Per Capita Incidence of Families Incidence of Population
Province Poverty Threshold (Percent) (Percent)
Inc/Dec Inc/Dec Inc/Dec
1997 2000 (%) 1997 2000 (%) 1997 2000 (%)
Philippines 9,843 11,605 17.9 28.1 28.4 0.3 33.0 34.0 1.0
NCR 13,201 15,678 18.8 4.8 5.7 0.9 6.5 7.6 1.2
Ilocos Norte 10,172 13,096 28.7 19.3 18.2 -1.1 25.1 22.8 -2.3
Ilocos Sur 11,046 13,455 21.8 28.7 30.6 1.9 35.2 35.4 0.2
La Union 11,002 13,121 19.3 37.5 33.7 -3.8 43.5 39.0 -4.5
Pangasinan 10,584 12,471 17.8 33.5 30.9 -2.5 39.5 37.2 -2.3
Batanes 11,841 12,976 9.6 8.7 7.5 -1.2 14.6 13.9 -0.7
Cagayan 8,690 10,119 16.4 25.3 20.3 -5.1 30.8 25.4 -5.5
Isabela 9,235 11,626 25.9 31.8 30.2 -1.6 37.2 34.6 -2.6
N Vizcaya 8,837 11,271 27.5 13.7 15.9 2.2 18.8 21.6 2.8
Quirino 9,233 10,665 15.5 33.8 31.4 -2.4 40.5 38.2 (2.3
Bataan 10,605 12,433 17.2 7.7 9.9 2.3 10.2 12.1 1.8
Bulacan 11,777 13,881 17.9 8.3 5.4 -2.9 10.7 7.5 -3.2
N Ecija 11,381 14,755 29.6 23.7 27.3 3.6 27.1 32.0 4.8
Pampanga 11,421 14,713 28.8 7.4 14.4 7.0 9.7 18.2 8.5
Tarlac 10,106 12,575 24.4 21.5 27.6 6.1 25.6 33.6 8.0
Zambales 10,266 12,716 23.9 16.6 23.5 6.9 22.3 28.0 5.7
Aurora 10,539 11,407 8.2 28.4 26.6 -1.9 34.4 33.2 -1.2
Abra 10,280 13,693 33.2 55.7 48.8 -6.9 58.9 58.6 -0.4
Benguet 11,788 14,185 20.3 18.9 14.1 -4.8 26.2 19.2 -7.0
Ifugao 11,225 11,852 5.6 57.7 55.6 -2.1 66.0 64.0 -2.1
Kalinga 10,307 11,439 11.0 38.7 38.8 0.1 44.3 45.1 0.7
Mt. Province 13,048 15,285 17.1 56.6 49.0 -7.6 64.7 57.6 -7.1
Apayao 9,563 11,278 17.9 27.5 26.1 -1.4 34.1 33.8 -0.4


Economic profile Poverty profile
Economic analysis Poverty analysis
Strategies Pro-poor strategies

Strategies Pro-Poor Strategies
• Improve access/linkages: • Improve access/linkages: construction
– With Regions 1 and 2 (ports, airports, and operations employment; relocation
domestic/foreign markets) from disaster prone areas/disaster
– With NCR domestic/foreign market mitigation
(NLE extension to Tarlac/Rosario)
– Lateral/internal (strategic)
• Protect and expand tourism market (e.g.

environmental integrity, New Baguio?) • Local employment: service industry,
environment management; construction
• Hi-tech, environment-friendly mining?
• Local employment
• Industry development
– BEPZ retention/expansion: cluster • Skills training; microlending/credit to
development; SMEs (e.g. tourism-oriented; specialty
– IT? crafts, cash crops/agri- and food
– niche industries? processing)
• Education center (including tourism,

upland agriculture research, IT-based?) • Rural school dev with road/access
improvement; clustering? Scholarships
• Process streamlining/remove transaction
obstacles (e.g. land titling) • Land/property reform/IP rights?
• Enhance/ensure security (image?)
Anti-poverty
instruments
Choice of Anti-poverty instruments
• Role of government should be catalytic and strategic

> Not a substitute for private provision
> Should encourage private participation
• Programs and projects will have sustainable impact only if it

influences decisions of the family regarding its labor
(participation in employment/income-generating activities)
> e.g. day care and additional livelihood opportunities
> e.g. provincial road and increased traffic
• Direct transfers (of food and income) have to be limited, well-

targeted and very temporary

• Delineation of responsibilities between municipal and

provincial LGUs seemingly governed by two parameters:
> Coverage of impact: province = cross-municipal

E.g. inter-municipal irrigation
> Point of influence: province = upstream (municipal = downstream)

E.g. Animal breeding station (vs Livestock dispersal)
Tourism promotion (vs Regulation of tourism facilities)
Tech’l assistance to coops (vs Organization of coops)
R & D on plant diseases (vs Quality control of crops)
• Economies of scale: health services


ASSET REFORM
 Urban housing and land distribution
 Capital and infrastructure provision
 Agrarian reform and land distribution
 Priority access of small fisherfolk (to 15 km zone)
 Grant of ancestral domain titles to IPs
IMPROVED ACCESS TO HUMAN DEVELOPMENT SERVICES
 Basic education, Health, Shelter
 Potable water
 Sanitation facilities
 Electrification
ENHANCED PARTICIPATION IN GOVERNANCE & INSTITUTION BUILDING

 Participation of civil society and basic sectors in policy-making at national and
local levels

INCREASED SOCIAL PROTECTION AND SECURITY FROM VIOLENCE

 Provision of social welfare and assistance: maintain minimum living standard,
reduce risk from violence, illness, disability, old age, unemployment,
resettlement, harvest failure
 Safety nets or mechanisms that mitigate adverse impacts of economic
dislocation, disasters and calamities, structural adjustments
 Social security that mitigates risk from retirement, unemployment, illness, and
disability
INCREASED EMPLOYMENT AND LIVELIHOOD OPPORTUNITIES

 Creation of rural jobs (agriculture and fishery)
 Improved access to credit facilities, microfinance services
 Entrepreneurial training
Factors affecting Poverty:

 GROWTH
 Education (complemented by infrastructure)

 Policy environment (e.g. agriculture terms of trade)
 Investment in land quality/productivity (e.g. irrigation)
 Agrarian reform
 Governance (political dynasties hurt the poor)
 Transportation (high transport costs are poverty traps)
 Source of growth
Guiding Principles: Local Poverty Reduction Plan

(LPRAP)
1. Poverty reduction: an inherent bias of LDPs
2. LPRAP: need-based and resource-based
3. Planning process: involve focused-targeting in terms of geographic
areas and basic sectors.
4. LPRAP: cover a strategic and program mix of direct services,
institution building, advocacy and networking.
5. Planning process: municipal-led but barangay-based
6. Interventions: involve convergence or resource sharing
7. Planning process: involve a multi-sectoral focal team.
8. LPRAP: blueprint for action, advocacy, social marketing
Source: Guidebook, 2002

Summary:
1. Causes of poverty in the Philippines
> Lack of economic growth

> Inability to benefit from growth
> Vulnerability to shocks
2. Overall approach
> Broad-based labor-intensive and inclusive growth

> Good governance and accountability
> Human and social development
> Social protection
> Special poverty reduction policies or direct anti-poverty
interventions such as land reform, micro credit, public employment
schemes
Summary:
1. Causes of poverty in the Philippines
> Lack of economic growth

> Inability to benefit from growth
> Vulnerability to shocks
2. Overall approach
> Broad-based labor-intensive and inclusive growth

> Good governance and accountability
> Human and social development
> Social protection
> Special poverty reduction policies or direct anti-poverty
interventions such as land reform, micro credit, public employment
schemes
Summary:
3. Basic objective: pro-poor economic growth
> Fundamental to social development and development planning

> Should not be confined to a single plan (e.g. LPRAP)
> Will be subject to various levels of influence (e.g. global, national, local)
4. Integrate with provincial development planning
Local Planning
Context
Vision
Objectives
Economic Dev Poverty Profile/ Situationer

Analysis/Plan Analysis Planning analysis
Strategies
Anti-poverty
instruments Projects
programs
Organization &
Implementation Plan
implementation
Summary:
5. Need to link with city, municipality, barangay
> Because poverty reduction is best addressed and evaluated at the

family/individual level
> Thru LPRAPs, specific programs/projects, etc
6. Selection and implementation of anti-poverty instrument

(project/program) is key
> Poverty reduction plan is not the end product

> Various approaches based on studies/experience are available to guide
selection
END

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Poverty Alleviation and

 To enhance knowledge: concepts of growth, poverty, growth

 To enhance skills in analyzing province’s potential for and

 To enhance skills leading to the design of development programs

Source: Based on Edillon, 2003

 Growth = increase in size

 Economic growth refers to a sustained increase in

 Factors traditionally expected to lead to economic growth in

• 2004 Phil pop (est) = 84 M

– 52:48 urban : rural

– About 43 M urban pop

• 1995-2000 AGR = 2.36%

• 1960-1995 Urban AGR = 4.2%

• Largest metro areas (> 1 M Pop):

-- Metro Cebu = 1.7M

METRO/URBAN CENTER 2000 Pop 95-00AGR 2000 Population

Population Pyramid, 1960

Philippines (Yr 1960) Thailand (Yr 1960)

Source: Edillon, 2003

Population Pyramid, 2000

Philippines (Yr 2000) Thailand (Yr 2000)

Male Female Male Female

Source: Edillon, 2003

 Factors traditionally expected to lead to economic

-- Large population: BUT WITH HIGH DEPENDENCY RATIO

The Philippines as a trade center of the Far East

“The Brussels-based International

 Factors traditionally expected to lead to economic

-- Large population: BUT WITH HIGH DEPENDENCY RATIO

-- Strategic location: BUT DISASTER-PRONE; LOCATION

Coastline Trade Growth

• Trade: historically limited;

• Shipping industry did not

• Many small islands;

 Factors traditionally expected to lead to economic

-- Large population: BUT WITH HIGH DEPENDENCY RATIO

-- Strategic location: BUT DISASTER-PRONE; LOCATION

-- Long coastline: DID NOT LEAD TO TRADE/GROWTH;

-- High literacy rate

1993 Primary School

Source: Based on Monsod and Monsod, 1999

 Factors traditionally expected to lead to economic

-- Large population: BUT WITH HIGH DEPENDENCY RATIO

-- Strategic location: BUT DISASTER-PRONE; LOCATION

-- Long coastline: DID NOT LEAD TO TRADE/GROWTH;

-- High literacy rate: BUT LOW LEVEL OF

 The Philippines has not experienced significant economic

GDP per capita, selected countries, 1980-2000 (1980=100)

 Before 1980, average Filipino was richer than average Thai;

Trend in per capita GDP, Philippines vs. Thailand, 1960-2000

1964 1969 1974 1979 1984 1989 1994 1999

 Lack of economic growth

-- Little improvement in quality of life

 Substantial/sustained economic growth leads to substantial

-- For each 1% increase in average per capita income,

Economic Growth and Poverty Reduction (1990s)

E Asia/Pacific 6.4 14.9

Trend of Per Capita

Per Capita GDP

Per capita GDP

 The major causes of poverty in the Philippines:

> Lackluster economic Economic growth