Growing GDP not reducing inequalities
According to S&P Global Ratings, the Philippine economy will grow by 7.1 per cent by the end of 2022. However, a World Bank report notes that half of the population has only 14 per cent of the country’s wealth.
Manila (AsiaNews) - The Philippine economy will reach a growth rate of 7.1 per cent by the end of this year, this according to S&P Global Ratings, an international credit rating agency.
This is a sign that the economy is performing well, higher than the original target of 6.3 per cent for this year.
The Philippine central bank has reported that, despite high inflation and the necessary increases in the discount rate, the third quarter of 2022 saw GDP jump by 7.6 per cent.
Such figures have allowed the country to overcome two years of pandemic, but like the rest of the world, growth is expected to face uncertainties next year.
What is more, macroeconomic data very often follow a different logic than everyday reality.
While some improvement in income and quality of life was reported, benefits were not evenly distributed. Inequalities remain a permanent feature of Philippine society.
Despite 30 years of substantial growth, the Philippines still has one of the largest income gaps in Asia.
In its report, Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future, the World Bank reports that “the top 1 percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent,” placing the Philippines in 15th position out of 63 for which data on income inequality are available.
This is significant, especially considering that overall poverty in the country has decreased. “By 2018, the middle class had expanded to nearly 12 million people and the economically secure population had risen to 44 million,” the report reads.
However, at the bottom of society, few have been touched by growth, perpetuating an inequality that in many cases comes before people are born and takes the form of malnutrition and poor maternal health.
This protracted negative situation is summarised by Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand.
“Inequality of opportunity and low mobility across generations wastes human potential and slowdown innovation,” Diop said. This “is crucial for building a competitive and prosperous economy that will in turn improve the well-being and quality of life of all Filipinos.”
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