Based on the nationally representative ―augmented‖ household panel data constructed for this study, average per capita income was on an upward trend, while poverty incidence (the proportion of the population deemed poor) was on a downward trend before the crisis. Average per capita income rose by 2% in 2007 and 2008, while poverty incidence dropped from 33.0% in 2006, to 31.8% in 2007, and to 28.1% in 2008. To put this in context, it is to be noted that the FIES-based mean income declined by an annual average of 1.1% between 2000 and 2006, while poverty incidence rose by 1.8 percentage points during the same period. Moreover, GDP per capita grew by an annual average of 2.6%. The growth of mean income and the decline in poverty during the growth years of 2007 and 2008 is thus a reversal of the trends in 2000-2006.
With the sharp deceleration of output growth across the economy’s productive sectors in 2009, real mean income dropped by 2.1%, while poverty incidence rose by 1.6 percentage points. As expected, households depending on industry for incomes took a hit; their mean income fell below that in 2007. The same is observed among wage and salary workers and substantially among unpaid family workers. Unexpectedly, contrary to previous episodes of economy-wide crisis (e.g., Asian financial crisis), the events in 2008/2009 spared the bottom quintile (poorest 20%) of the population from disproportionately taking the brunt of the shock.
If there was no GEC and the economy moved along its long-term growth path (business as usual), mean income would have increased by 1.8% between 2008 and 2009, which would have caused poverty to fall, rather than increase, from 28.1% to 27.7% during the same period. Given these estimates and current population growth projections, nearly 2 million Filipinos were pushed to poverty owing to the GEC.
Based on the nationally representative ―augmented‖ household panel data constructed for this study, average per capita income was on an upward trend, while poverty incidence (the proportion of the population deemed poor) was on a downward trend before the crisis. Average per capita income rose by 2% in 2007 and 2008, while poverty incidence dropped from 33.0% in 2006, to 31.8% in 2007, and to 28.1% in 2008. To put this in context, it is to be noted that the FIES-based mean income declined by an annual average of 1.1% between 2000 and 2006, while poverty incidence rose by 1.8 percentage points during the same period. Moreover, GDP per capita grew by an annual average of 2.6%. The growth of mean income and the decline in poverty during the growth years of 2007 and 2008 is thus a reversal of the trends in 2000-2006.With the sharp deceleration of output growth across the economy’s productive sectors in 2009, real mean income dropped by 2.1%, while poverty incidence rose by 1.6 percentage points. As expected, households depending on industry for incomes took a hit; their mean income fell below that in 2007. The same is observed among wage and salary workers and substantially among unpaid family workers. Unexpectedly, contrary to previous episodes of economy-wide crisis (e.g., Asian financial crisis), the events in 2008/2009 spared the bottom quintile (poorest 20%) of the population from disproportionately taking the brunt of the shock.If there was no GEC and the economy moved along its long-term growth path (business as usual), mean income would have increased by 1.8% between 2008 and 2009, which would have caused poverty to fall, rather than increase, from 28.1% to 27.7% during the same period. Given these estimates and current population growth projections, nearly 2 million Filipinos were pushed to poverty owing to the GEC.
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