Despite gains achieved to reduce poverty in the past three decades, the Philippines continues to have the widest wealth gaps in Asia and around the world, the World Bank said in its “Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future” report.
“The wealthiest one percent of earners capture 17 percent of national income; all those in the bottom 50 percent collectively receive only 14 percent,” the World Bank said in its report, with data revealing that the Philippines ranked 15th out of 63 countries in income equality.
These figures reflect the reality of income disparity in the country, despite the fact that the Philippines has managed to reduce poverty at a rate of 16.7 percent in 2018 from 49.2 percent in 1985.
“By 2018, the middle class had expanded to nearly 12 million people and the economically secure population had risen to 44 million,” The World Bank said.
That said, the country’s Gini coefficient, which measures the distribution of income across a population, reached 42.3 percent in 2018 — showing it had one of the highest income inequality rates in Asia.
“Inequality of opportunity and low mobility across generations wastes human potential and slow down innovation, which is crucial for building a competitive and prosperous economy that will, in turn, improve the well-being and quality of life of all Filipinos,” Ndiamé Diop, the World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand, said.
The World Bank said that inequality in the Philippines starts even before birth, particularly with maternal nutrition and health during pregnancy, and is reinforced over the course of a person’s life.
“The Philippines aims to become a middle-class society free of poverty by 2040, but we know from global experience that no country has managed to make this transition while maintaining high levels of inequality,” Diop said.
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