For the most part of the past quarter century, the Philippine
economy performed poorly, especially seen against the
backdrop of the dynamic East Asian economies. Spurts of growth
were often followed by bust and stagnation. Not surprisingly,
absolute poverty among a significant proportion of the population
has persisted. The country’s real per capita GDP at the turn of the
21st century was just about the same as that in the early 1980s,
which is also partly attributable to unabated population growth.
The growth episodes in the late 1980s through the 1990s,
despite interruption in the late 1990s owing to the Asian financial
crisis and the El Niño drought, appear to be fundamentally different
from the previous ones. Growth took place in an environment of
relative political stability, economic deregulation, and institutional
reforms. While policy coordination problems (e.g., in public
investments) persisted, it can be said that the economy at the end
of the 20th century was more market-oriented than it ever was
(Bautista and Tecson 2002).
How well has this recent growth performance influenced the
welfare of the poor? If growth has not been good enough, what else
matters critically to poverty reduction?
This note summarizes the results of empirical research on the
determinants of poverty reduction in the Philippines from the late
1980s to the late 1990s (Balisacan and Pernia 2002). Departing from
the usual approach to examining the link between growth and
poverty using cross-country averages, the study analyzes the
variations in the growth-poverty performance across the country’s
75 provinces to identify the key factors directly and indirectly
affecting the well-being of the poor.
