Filtered By: Money

Rich-poor income gap could widen further in Philippines after pandemic -ADBI

Poor Filipinos are more vulnerable to income decline than the rich due to the COVID-19 pandemic-induced economic fallout, reflecting a wider income disparity between the lower and higher income classes in the country, according to Tokyo-based think tank Asian Development Bank Institute (ADBI).

In its working paper titled “Impact of COVID-19 on Households in ASEAN Countries and their Implication for Human Capital Development,” the ADBI surveyed 1,000 household heads in the Philippines, of which 520 are from urban and 480 are from rural areas.

Across the region, the think tank surveyed 8,078 respondents, 3,447 of which are from urban and 4,631 from rural areas.

The ADBI conducted its survey through telephone interviews, lasting about 12 to 15 minutes.

Results of the survey found that the poorest groups in the Philippines more likely faced financial difficulties than the richest groups by about a difference of 40 percentage points.

“This may be due to the fact that some households suffered from income decline, but they also had to increase their expenditure,” the ADBI said.

“In the Philippines, households in the lower-income classes are more likely to have income declines than those in the upper-income classes. This implies that the income inequality may be widened after the COVID-19 pandemic in the Philippines,” the think tank said.

The ADBI survey also found that 84% of Filipino households reported declining incomes.

Likewise, 85% of households in the Philippines said they experienced financial difficulty.

“The situation is also serious in the Philippines, with less than 30% having enough resources to cover necessary expenditures for more than a month,” the ADBI said.

“This suggests that if the COVID-19 pandemic is prolonged, many households in these countries may suffer from hunger and potentially increased poverty,” it said.

The think tank said that Filipinos as well as Cambodians and Indonesians “lacked a well-developed social safety net to support them when there is a shock.”

In 2020, the country’s gross domestic product contracted by 9.5%, its worst performance on record since the end of World War II, due to the COVID-19 crisis. -MDM, GMA News