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Poverty in the Philippines: Employment of the Poor

Poverty in the Philippines: Employment of the Poor

Jan 25, 2012

Poverty in the Philippines: Employment of the Poor

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

Employment Status by Income Stratum, 2008

Employment Status Both Income Strata (%) Lowest 30% (%) Highest 70% (%)
Total 100 100 100
Employed 82.0 90.2 78.5
Unemployed 18.0 9.8 21.5

Source: National Statistics Office, APIS (2008)

A common conception that needs to be corrected is that the poor are what they are because they are lacking in employment opportunities. In fact, the opposite appears to be the case, as a glance at employment across income strata show.

On average, the segment of the population with the lowest 30% of incomes is 90.2% employed, versus the 78.5% ratio of the higher 70%. More than just employment and unemployment, this suggests that the larger issue for the poor seems to be the kind of employment that they receive and undertake, as well as the general conditions under which they work and labour.

            Poverty Incidence of Various Classes of Workers

Worker type Poverty Headcount Share to Total Poor
Private Household 23.29 4.52
Private Establishment 24.89 34.36
Government / GOCC 8.73 2.39
Self-Employed 33.91 36.45
Employer 20.56 3.37
With pay (family-owned business) 18.03 0.3
Without pay (family-owned business) 45.37 18.6
Total 28.46 100

Source: National Statistics Office— FIES (2006), An Assessment of the Poverty Situation in the Philippines— Reyes (2010)

The work arrangements of the poor gravitate towards household-centric and private arrangements of conducting livelihoods.  Most of the poor are apparently self-employed (36.45%), or running private, usually microenterprise establishments (34.36%) and/or family-owned businesses (18.9%).

In general, working in a family owned-business without pay is dominated poor households (45.37%). Self-employment (33.91%), as well as running a private establishment (24.89%), are also pursuits which are considerably made up by poor workers.

Informal Sector Operators

Selected Indicators Percent (%)
Informal Sector Operators (Thousands)

10, 454

Occupation Group
Managing Proprietors




Technicians and Associate Professionals


Service Workers and, Shop and Market sales Workers


Farmers, Forestry Workers


Trades and related workers


Plant and machine operators and assemblers


Laborers and unskilled workers


Other occupation not elsewhere classified


Industry Group
Agriculture, Hunting and Forestry




Mining and Quarrying




Electricity, gas and water




Wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods


Hotels and Restaurants


Transport, Storage and Communication


Financial Intermediation


Real estate, renting and business activities




Health and social work


Other community, social and personal service activities


Source: National Statistics Office— Informal Sector Survey (2008)

The poor are known to be subject to higher rates of informalization than the norm of the rest of the population. A look at the sectors experiencing higher informality thus hints to a significant amount of overlap among these and the main industry groups of the poor. The largest industry group in the informal sector is that of agriculture and forestry (41.3%), followed by wholesale and retail trade with repair services (29.6%). Both of these are also those industry groups where the poor most often stake their livelihoods.

Examination by occupation groups leaves us with similar results. The occupation group experiencing the highest amount of informality is that of farmers and forestry workers (47.4%), and then of managing proprietors (31.2%)— usually of microenterprises— and finally, of labour and unskilled workers (8.2%). These again intersect into the known economic activities of the poor, who are known to engage in agriculture, microenterprises and family-based businesses.

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