Poverty and inequality in the Philippines remains a challenge. In the past four decades, the proportion of households living below the official poverty line has declined slowly and unevenly and poverty reduction has been much slow.
Economic growth has gone through boom and bust cycles, and recent episodes of moderate economic expansion have had limited impact on the poor. Great inequality across income brackets, regions, and sectors, as well as unmanaged population growth, are considered some of the key factors constraining poverty reduction efforts.
The main causes of poverty in the country include the following:
• low to moderate economic growth for the past 40 years;
• low growth elasticity of poverty reduction;
• weakness in employment generation and the quality of jobs generated;
• failure to fully develop the agriculture sector;
• high inflation during crisis periods;
• high levels of population growth;
• high and persistent levels of inequality (incomes and assets), which dampen the positive impacts of economic expansion; and
• recurrent shocks and exposure to risks such as economic crisis, conflicts, natural disasters,and "environmental poverty."