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PB 005: What Else Besides Growth Matters to Poverty Reduction? Philippines

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.

Asian Development Bank
Authors Keywords
ADB; Asian financial crisis; El Niño phenomenon; poverty; population; institutional reforms; poverty reduction; economic liberalization; gross domestic product (GDP);
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Published in 2002 and available in the ADB Website or Downloaded 13,424 times since November 25, 2011
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