Philippine poverty rate seen to increase by 3.3 percentage points due to COVID-19 — World Bank

The poverty incidence rate in the Philippines is seen to go up this year due to the economic fallout brought about by the coronavirus disease 2019 (COVDI-19) pandemic, the World Bank said Tuesday.

“We can expect an increase in poverty rate,” World Bank senior economist in the Philippines Rong Qian told reporters in a virtual press conference.

“We did a simulation, only assuming two months of loss of income by the poor and vulnerable population, the poverty rate can increase by 3.3 percentage points in 2020,” Qian said.

The World Bank economist noted that the assumption of 3.3 percentage points increase in poverty also assumed there are no social protection measures.

“We know that the government has provided the SAP (social amelioration program) and wage subsidies,” Qian said.

However, she said that government cash aid only compensated partially the loss of income during the quarantine periods.

“Because the economy is expected to contract we can expect the poverty rate to increase in 2020,” she added.

In December 2019, the Philippine Statistics Authority reported that the poverty rate fell to 16.6% from the previous record of 23.3% in 2015. 

The World Bank is also projecting that the economy will contract by 1.9% in 2020 due to COVID-19 impact. 

“The trajectory that we are seeing is a deeper recession in the second quarter because the ECQ (enhanced community quarantine) covered most of the second quarter,” Qian said.

For the third quarter, the economist said the contraction could be somewhere between the gross domestic product (GDP) recorded in the first and second quarters before reverting to a “muted growth in the fourth quarter.”

The World Bank said the Philippine economy will revert to growth at an estimated 6.2% in 2021.

With this, Qian said poverty incidence will decline along with the economy’s expected recovery. — RSJ, GMA News