A Poverty Resource Hub of Focus on the Global South Philippines

Poverty in the Philippines: Income Inequality

Poverty in the Philippines: Income Inequality

Jan 25, 2012

Poverty in the Philippines: Income Inequality

(Note: This piece is a segment from a larger article “Poverty in the Philippines: A Profile”, showcased in Focus-Philippines’ upcoming Poverty Policy Review)

Income Inequality from 1985 to 2009

Year

Philippines

Urban*

Rural*

1985

0.4466

0.4555

0.3796

1988

0.4466

0.4447

0.3891

1991

0.4680

0.4736

0.3941

1994

0.4507

0.4602

0.3942

1997

0.4872

0.4850

0.4190

2000

0.4822

0.4857

0.4346

2003

0.4605

0.4782

0.4255

2006

0.4580

0.4496

0.4296

2009

0.4484

-

-

Source: National Statistics Office— FIES (2006)

*Gini estimates for urban and rural areas are taken from: An Assessment of the Poverty Situation in the Philippines— Reyes (2010), which may have applied a different estimation method from that employed by NSO

Even as poverty has gradually decreased since 1985, the Philippines’ context of wealth inequality displays other patterns. Rather than being reduced between 1985 and 2009, inequality, in fact, appears to have faintly increased throughout years. The Gini coefficient of income presents a slight rise from 0.4466 (1985) to 0.4484 (2009), between which inequality peaks during 1997 (0.4872). This inequality rating was achieved after a critical period of economic restructuring throughout the Ramos and Aquino administrations. From this extreme point onwards, income inequality would steadily lessen throughout the subsequent decade— 0.4822 (2000), 0.4605 (2003), 0.4580 (2006), and 0.4484 (2009).

Another pattern worth noting lies in the varying experiences of income inequality in the urban and rural spheres. Overall, inequality seems to be far more evident in urban than in rural areas— but whereas urban inequality first aggravates and then is slightly alleviated over the years, rural inequality seems to have undertaken an insistent upward swing. From 0.3796 in 1985, rural income inequality escalates to 0.4296 in 2006, with the highest Gini coefficient reached with 0.4346 in 2000— the immediate years after the Asian Financial Crisis. These were, additionally, the same years when land conversions and agro-industrial complexes partly remoulded the face of the countryside.

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