What Has Really Happened to Poverty in the Philippines? New Measures, Evidence, and Policy Implications

That poverty is a multidimensional phenomenon is no longer debatable. What remains a contentious issue is whether the various dimensions of individual deprivation should be aggregated--and how these are to be aggregated--into a summary measure of poverty.This study employs the Alkire-Foster aggregation methodology, which preserves the “dashboard” of dimensions of poverty, to systematically assess the magnitude, intensity, and sources of multidimensional poverty over the past two decades and across subpopulation groups in the Philippines. It finds that what is generally known about the country’s performance in poverty reduction in recent years, as seen in income measures of poverty, is quite different from what the lens of multidimensional poverty measures reveal. While income-based poverty remained largely unaffected by economic growth during the past decade, multidimensional poverty did actually decline. This finding is robust to sources of nationally-representative household survey data and to assumptions about the poverty cutoff. From a policy perspective,this result reinforces the view that nothing less than economic growth, even in the short term, is required to reduce poverty (broadly interpreted to include individual deprivations beyond income). Moreover, the diversity of both deprivation intensity and magnitude of poverty across geographic areas and sectors of the Philippine society is enormous, suggesting that, beyond growth, much needs to be done to make development more inclusive.