THE WORLD BANK
said as many as three million more Filipinos may have fallen below the poverty line over the last two years because of record-level surges in prices of food, fuel and other commodities.
Nominal income levels have increased from 2006 to 2008, the World Bank said. But it stressed that inflation–the increase in consumer prices–rose at a faster pace during the two-year period, thus resulting in the decline in "real" income.
Food alone accounts for half of the consumer basket of an average Filipino household, the World Bank noted. The double-digit increase in the prices of food in the past months relative to their year-ago prices, therefore, put a dent on Filipinos’ purchasing capability.
In June, minimum wages across all regions of the country were raised, supposedly allowing Filipinos to buy more food and other commodities. But because the increase in consumer prices
was faster than the rise in wages, the net effect was still a decline in purchasing power, the World Bank said.
For instance, the foreign lender said, the minimum wage in the National Capital Region was raised by 6 percent in June, but that annual rate of inflation in the region hit 7.2 percent in the same month. Inflation even accelerated to at least 9 percent in the succeeding months, the World Bank said.
Technically, a person becomes poor if his or her income becomes insufficient to meet the minimum spending requirements for food, shelter, education and other basic needs as determined by the National Statistical Coordination Board. The minimum spending requirements increase when prices of commodities rise.
According to the government’s latest Poverty Incidence Report, which is released every three years, there were 27.6 million poor Filipinos as of 2006, translating into a poverty incidence of 32.9 percent of the country’s population during the period.
The latest poverty incidence was already worse than the 30 percent recorded in 2003, but the World Bank said the number of poor Filipinos likely increased further from 2006 to present.
"It is estimated that up to three million people may have fallen below the poverty line in the last two years due to rising prices," the World Bank said in its "Quarterly Update on the Philippines," which was released Friday.
The World Bank also said one area of concern for policymakers in the Philippines was that economic growth hardly translates into poverty reduction, an indication that the benefits of an improving economy were only being enjoyed by the middle class and the rich.