A think tank has said the Philippines will remain one of the poorest countries in Southeast Asia despite a robust economy recently.
The London-based Economic Intelligence Unit said the Philippine economy would continue to be “marked by wide inequalities of income, and the disparity between the richest and poorest households would stay particularly acute.”
The EIU is not only a research and analysis segment, they are also well known for publishing The Economist magazine.
EIU said that by 2019, “The Philippines will remain one of Southeast Asia’s poorest economies with a lower level of GDP per head than the majority of the region’s other major economies.”
The report also noted that large numbers of Filipinos would continue to live in poverty despite recent economic gains achieved by the Philippines.
It also said that rural poor would benefit only to the extent that the government directs spending towards improving the quality of essential services – including education, healthcare and transportation.
The group also said the Philippines is a small market, with a GDP per head estimated at only $2,843 in 2014.
The EIU said they only forecast per capital income in the Philippines at $4,549 by 2019.
Strong inflows of money from OFWs, relatively low interest rates and strong job growth have kept consumer expenditures afloat – without it, the entire economy could easily crash.
The group also said that Philippine banks have been moving away from traditional areas of activity – moving instead towards retail financial projects – creating easy loans for housing, cars, debit and credit cards.
Citing 2013 data, 52 per cent of household spending went towards basic necessities such as food. In recent years those numbers have spiked.
“Although poverty will remain a problem, continuing healthy rates of economic expansion in 2015-2019 will also benefit the poorer segments of the population,” the think tank added.