Press Briefing

Economic Briefing with National Economic Development Authority Secretary Ernesto Pernia; Director Mary Anne Darauay; Philippine Statistics Authority Assistant Secretary Rosalinda Bautista and PCOO Undersecretary Rocky Ignacio

Event Economic Briefing
Location New Executive Bldg., Malacanang

USEC. ROCKY IGNACIO: Good morning MPC at sa ating mga bisita, welcome sa ating weekly Economic Press Briefing co-hosted by the Economic Development Cluster kasama po ang PCOO.

Sa mga susunod na taon, inaasahang makakamit na natin ang Upper Middle Income Country Status, mula po ito sa kasalukuyang Lower Middle Income Country Status. Ito ay sa tulong ng mga kasalukuyang reporma at programa ng pamahalaan alinsunod sa 0-10 point socioeconomic agenda ng Duterte administration.

Kasama sa mga repormang ito ang Comprehensive Tax Reform Package o Program na siyang makakatulong para maging patas, simple at epektibo ang pagbubuwis at siyang makapagbibigay ng nararapat na investment sa human capital, infrastructure at social protection na siyang makakatulong para po sa mahihirap at vulnerable na sector ng ating lipunan.

Kaakibat ng Ambisyon Natin 2040 ang hakbang ng pamahalaan na maibaba ang poverty incidence sa bansa mula 23.3% noong 2015 hanggang sa 14% na lamang pagdating sa 2022. Tinatayang aabot sa isang milyong Pilipino po ang maiaahon sa kahirapan kada taon hanggang 2022 at inaasahang maiibsan ang extreme poverty sa bansa pagdating ng taong 2040.

Ngayong umaga po makakasama natin ang National Economic Development Authority sa pangunguna ni Socioeconomic Planning Secretary Ernesto Pernia, kasama si Director Mary Anne Darauay, kasama rin natin si Assistant Secretary Rosalinda Bautista ng Philippine Statistics Authority upang ibahagi ang ilang update po mula po sa official poverty statistics ng bansa para sa taong 2018.

Secretary…

SEC. PERNIA: Magandang umaga sa ating lahat. Alam na ng publiko by now that—ang balita na bumaba ang poverty incidence natin significantly from 23.3% in 2015 to 16.6% in 2018. Alam ninyo iyong data na iyon ay galing sa Family Income and Expenditure Survey which is conducted by PSA every 3 years. So the last one was in 2015 and the most recent one was in 2018. So iyon ang reckoning natin na iyong every 3 years we have this report on poverty as well as other information about family incomes and expenditures.

So I suppose that everybody is heartened by the news about the reduction, sharp reduction in poverty incidence by 6.7 percentage points which translates to 2.3 percentage points every year reduction. So it’s now 16.6%, so if we project it to the future assuming that it will continue to decrease by about 2 to 2.23 percentage point every year, then we should easily reach iyong objective natin na by the end of this President’s administration, poverty incidence will go down to 14%.

Actually, we are only about 1.6 percentage point to the 14% poverty reduction—14% poverty rate by 2022, midyear. So parang it’s a walk in the park na maabot natin iyong 14% by 2022. By next year maabot na iyon eh, mag-exceed na tayo ng—we will have a poverty incidence even lower than 14% by next year if we go by the rate of decline in poverty incidence.

So, iyon ang magandang balita at saka hindi lang iyon. So the—ang implication diyan ng poverty incidence sa reduction is 5.9 million Filipinos have been lifted out of poverty. Our target was only 6 million Filipinos will be lifted out of poverty between—from the start of this President’s administration to 2022. Pero naabot na iyon in two year’s time kasi 2016 nag-umpisa ang administration na ito, so by 2018 naabot na iyong reduction ng poverty incidence—no, no, iyong 6 million. 6 million lifted out of poverty over this current administration’s term.

So iyon ang mga magandang balita, it’s really—we’re really exceeding targets now and—you know, there are other indicators of poverty like… well, yeah. Like—there are other indications of poverty like subsistence incidence—yeah, mayroong mga subsistence incidence ‘no which also declined sharply; and then there’s also measure of poverty severity and poverty gap, meaning what is needed for those below the poverty line to go above the poverty line. All these data available in the website of PSA.

So—pero ang pinaka—ang headline news is really like headline inflation rate, we also have headline poverty incidence news – and that is the poverty incidence for the population. If we go by families, the poverty incidence has also gone down from… something like 17 yata… 17% to 12% something like that, so bumaba rin ang ano. Kasi there are two ways of looking at poverty situation: you either look at it for population as a whole or by families. So ang poverty incidence reduction for families from 17.9 to 12.1 na lang. So talagang all indicators are pointing to… or are confirming the reduction in headline poverty incidence.

Let me also cite that in terms of what brought down, what factors explained the bringing down of poverty incidence sharply. Well, we have also employment numbers that show that our unemployment rate has gone down from double digits in the past, in previous administration – double digits, it’s now gone down to 5.1% in 2018. So 2019, it has gone down farther to 4.5% unemployment rate. In terms of underemployment rate it used to be in the 20’s in previous administrations, now it is down to 13.1% last year. This year, it has gone down farther to 13% flat, under employment rate.

So meaning that more jobs are created, I think in between 2018 and 2019 the next employment increase, the net job addition was 1.8 million – 1.8 million additional jobs were created. So, yearly, I think it’s on the order of 1.4 million? So, that is one major factor that brought down poverty incidence – that people are having more jobs, so they have incomes.

And then also we have policy reforms, we have institutionalized the CCT (Conditional Cash Transfer), and many families have benefited from that program, in the sense that families are given 500 pesos for the family and then for school children 300 pesos a month is given allowance to children who go to school and also who are brought to health centers for regular checkups and you know whatever medication they may need to stay healthy. And also we have Conditional Cash Transfers that were meant to alleviate the increases in gasoline, in fuel prices due to the TRAIN Law and also Pantawid Pasada for public transport drivers, public jeepney drivers, as well as other income transports have been made possible.

In addition, I would also cite that we have intensified our family planning program. This program that has been neglected by the previous administrations, but now it is going full steam. We are providing access to family planning services to women or couples who desire to have fewer children than what they are having. Enough children that they can provide for and that they want, because surveys have shown that – especially for women, they are having, let’s say five, six children but they really only want three children. So with family planning services, the wanted number of children is being made possible now for couples and for women especially those coming from the poor sector. This is also an important instrument in bringing down poverty.

So, thank you and we are now open for questions, unless my colleagues here would like to add something.

ASEC. BAUTISTA: If we look at the poverty incidence across Asian countries, we see that we are already just higher than—the lowest of course is Malaysia 0.4 and then next to that is Thailand 8.6 and then Vietnam 9.8 and then 10.6 and Indonesia, tayo po ay 16.6 – ang ating national poverty line. So, we are much better off than Cambodia, Laos PDR and Myanmar and this is 2018 for us, whereas for the other countries, they are at the 2017, 2016. So, hindi pa rin po natin alam. So iyon po iyong from PSA.

SEC. PERNIA: I’d like to add to that particular point, that in the case of Indonesia and Thailand, they didn’t only have the kinds of programs we have, policy reforms that we have already undertaken, but they also had sustained family planning programs since the 1970’s, which we did not. Although, we started sooner than Thailand and Malaysia in terms of the family program in 1969 we started, Thailand followed in 1970, but we did not sustain it. It was stopped because of the demands of conservative groups by the late 70’s. So, since the late 70’s until the present, the administration – except for the administration of President Ramos which was short lived – we have not really had an honest to goodness family planning program. So that explains why the poverty incidence in the other countries like Thailand and Malaysia and Indonesia is much lower than in the Philippines.

And also by the way, we also should note that poverty, the reduction of poverty incidence is spread across the regions, country’s regions. All regions experienced reduction in poverty incidence, the biggest reduction was experienced by region 7. But the only region that did not have an increase in poverty incidence, instead of a decrease, is the ARMM or the BARMM now. And that is because this region has really been problematic in terms of governance and you know the way it is ran. So, but we expect the governance of the BARMM to improve with the Autonomous Law for Muslim Mindanao already in effect.

DIRECTOR DARAUAY: Just to add in summary, we can see of course that from this decrease, we have seen that our PDP has really resulted in good results, in positive results. Thus, we are saying now, we are underscoring that we should sustain what we have already started with the PDP. And with the medium term or midterm update of the PDP, we are going to realign some of the strategies already to move forward. Some of these would include the expanded economic opportunities for improving the country’s competitiveness, the acceleration of efforts to improve regional connectivity, and expand the access to quality basic education. And then our main social problems now: which is reduce stunting – to reduce child dependency ratios, to reduce teenage pregnancy, and mobilize savings among the poor, and then intensify peace building efforts and continue on our tax reforms.

So with these, hopefully, we will definitely go over our target of 14% even next year as mentioned by the Secretary. Thank you.

SEC. PERNIA: Okay, one additional thing is inequality. Inequality has also improved in the sense that lower income families are getting higher income increases than upper income families.

So if you look, for example, at the 30% poorest families, those in the first decile – the poorest decile – have experienced the highest increase in incomes of about 35% or 33%. And then in the second deciles – the next poorest deciles – the increase in family incomes were not as high as those in the poorest decile. At the third decile is also even lower than the second decile’s increase in income.

So we are—inequality, our problem of inequality across households and across regions has also been addressed by the policies contained in the Philippine Development Plan 2017-2022. So maybe we can now open the floor for questions.

ALVIN BALTAZAR/RADYO PILIPINAS: Secretary, good morning po. Sec., nabanggit ninyo iyong tungkol sa family planning. Gaano ka-crucial iyong pagpapatupad ng family planning ng gobyerno ngayon?

SEC. PERNIA: Well, as I’ve said, I was comparing the cases of the Philippines which did not sustain the family planning program since the late 70s; whereas Thailand and Malaysia and Indonesia just continued on with their family planning program without disruption.

And there’s a big difference in terms of poverty incidence. We’re talking about 16.6% in the Philippines; 8.3% in Thailand; 10% or 11% in Indonesia; and less than one percent poverty incidence in Malaysia. So that is the kind of difference that our non continuation of our family planning program started in 1969 has been a costly failure on our part. Okay?

ALVIN BALTAZAR/RADYO PILIPINAS: Secretary, siguro doon lang sa monthly income, kung mayroon kayong statistics. Sa average monthly income ng isang may trabaho na may pamilya, ano ba iyong ideal amount na mai-take home niya para sa pamilya niya?

SEC. PERNIA: Well, the ideal amount is something that will make him happy, make the family happy… that is the ideal amount, that is the desired amount. The desideratum for the family is what would make the family happy. But then, in terms of basic needs, really basic needs, basic food and non-food needs, the estimate is about 11,000 – P10,700. In terms of basic needs ha, which is an international way of looking at what is the basic income required for daily subsistence. In the Philippines, it’s 10,700. It’s used to be 9,000 ‘no? It’s used to be less than 10,000 but it has increased to—it’s used to be 9,400; it’s now 10,700.

ALVIN BALTAZAR/RADYO PILIPINAS: Para sa ilang miyembro ng pamilya iyon, Sec?

SEC. PERNIA: Yeah. The typical family size for that is five…family of five. So essentially, two parents and three children.

ARIANNE MEREZ/ABS-CBNnews.com: Sir, iyong 10,727 po, sir, ‘di ba for basic …minimum po iyon for basic food and non-food items. Sir, puwede lang po bang malaman ano po iyong mga food and non-food items na finactor in ninyo po doon po sa amount na iyon for a family of five?

SEC. PERNIA: Well, essentially protein requirements wherever that… sa food, protein requirements. There’s something like 2,100 calories ‘no, calories a day ang kailangan.

ARIANNE MEREZ/ABS-CBNnews.com: Sir, puwede po kaya tayong mas maging specific like bigas po ba, para mas maunawaan po ng mga tao?

SEC. PERNIA: It’s a food bundle: Bigas is one item, another one would be—sige, ikaw na Rose.

ASEC. BAUTISTA: Para sa specific, mayroon kasing crineate [created] na food bundle, may national and then may regional food bundle.

So for example, the national food bundle for breakfast: it would include scrambled egg, coffee with milk; and then boiled rice or rice-corn mix. Itong boiled rice or rice-corn mix can vary from region to region, depende which is available na least cost.

For lunch: we have boiled monggo with malunggay and dried dilis, banana; and then boiled rice again or corn mix.

And then for dinner: fish or boiled pork, vegetable dish and then boiled rice or corn mix. And then there’s also snack of bread or boiled food crop.

This particular menu/bundle will meet energy requirements at 100%, as well as protein, calcium, iron at 80%. Mayroon siyang minimum na dapat ma-meet na requirement and lowest cost possible, and available in the area.

ARIANNE MEREZ/ABS-CBNnews.com: Ma’am, ano naman po iyong non-food items na kasama po sa budget po na iyon, iyong almost 11,000 po?

ASEC. BAUTISTA: The non-food items would include clothing and footwear, fuel, light and water, housing maintenance and other minor repairs, rental occupied housing or dwelling units, medical care, education, transport, non-durable and household operations and personal care. Recreation, tobacco and alcohol are ‘excluded.’ Hindi po kasama sa budget.

ARIANNE MEREZ/ABS-CBNnews.com: Ma’am, last na lang po. Iyong division po noon, how much po is allotted for the food and then how much po is allotted for the non-food items?

ASEC. BAUTISTA: So iyong sa food, mayroon po kaming tinatawag na monthly food threshold lang, iyon po talaga ‘yung na-define – 7,528 for a family of 5 monthly, so out of the 10,727; so iyong difference iyon ‘yung allotted para sa non-food.

ARIANNE MEREZ/ABS-CBNnews.com: Okay, thank you po. And then Sec., do you think this is a reasonable amount po for the minimum needs of a family of 5 in our country considering iyong current prices of goods po, prevailing prices in the market?

SEC. PERNIA: Well, that is known as basic needs. So basic needs are basic needs. Well no frills, no fancy items there but it’s basic needs by definition. So palagay ko—I am sure many families are, you know, subsisting with that kind of budget, those below the poverty line especially the really poor, you know. So ganoon, ganoon ang ano talaga… yeah.

JOSEPH MORONG/GMA7: Secretary, good morning. When you say… there’s 5.9 million Filipinos have been lifted out of poverty, if we operationalize that data, what can they do now which they are not able to do before?

SEC. PERNIA: Well before they were, you know, they were subjective to the basic needs/thing that we were talking about; now they are probably over that. So instead of 10,700 budget requirement for a family of 5, maybe they are now you know over that; maybe they are now 15 or 20,000.

JOSEPH MORONG/GMA7: Sir, iyon pong 10,700 na monthly, kung kumikita ka noon, anong description natin sa kaniya – is he poor, he’s not poor? Iyon pong family that is earning P10,700 a month, ano pong description natin sa kanila—

SEC. PERNIA: That is the poverty threshold. If you are below that, then you are poor; if you’re above that, you are non-poor.

JOSEPH MORONG/GMA7: Alright. So sir safe to say that there are more—parang mas maraming—iyong 5.9 mas marami nang—mas malaki na iyong kinikita nila than the P10,700?

SEC. PERNIA: I would suppose so. Well their lives have improved.

JOSEPH MORONG/GMA7: Okay. That’s a 2018 data, it could be higher?

SEC. PERNIA: Oo, yeah.

JOSEPH MORONG/GMA7: Alright, thank you.

GILLIAN CORTEZ/BUSINESS WORLD: Good morning, sir. Sir, you mentioned also a while ago that you were positive that by the end of the administration the poverty incidence could decrease to 14%; but you also mentioned that you’re positive it will be lower by 14% next year. So because of the—like what you mentioned earlier na you said you were positive it will go down to 14%. What are other things that we should do to be able to meet this goal?

SEC. PERNIA: Well, the things that we mentioned that if you are able to find a job – a good paying job – that would help. And then if you get the income transfers from government subsidies, then that will also help. And then as I’ve said, if you have many children, you have more than 3 children, you have 5 children, then you know try to contain yourself by practicing family planning, then that would help you in, you know, improving your situation.

GILLIAN CORTEZ/BUSINESS WORLD: Sir, you also mentioned that one of the reasons why the poverty incidence lowered from the period of 2015 to 2018 was also tax reforms. Could you elaborate on that because that’s one of the things also that a lot of Filipinos complain about?

SEC. PERNIA: Yeah. Well you know that those families earning P250,000 or less per annum or yearly, they are exempt from paying taxes. So in fact that’s a huge uplift for Filipino families. If you are earning P250,000 or less, then walang tax sa… walang tax sa—you know, you are exempted from taxes. So your take home pay, your purchasing power is much higher than what used to be the case. Because I think in the past, only those earning P30,000 or less were exempted from taxes. Now this threshold has gone up several folds to P250,000 per annum.

GILLIAN CORTEZ/BUSINESS WORLD: One last, sir. Do you think that the proposed tax measures that are currently being discussed in the Congress, will it affect the future poverty incidence or no?

SEC. PERNIA: Well the CITIRA thing, the corporate income tax and then the rationalization of fiscal incentives, they are meant to increase the tax stake—no, no, no I’m sorry. For the corporate income tax, it’s going to be reduced but then we have to have compensating other measures like the rationalization of fiscal incentives so that at the worst… parang ano, na walang net negative effect in terms of the tax revenue of the government for administration, for infrastructure, for providing income transfers to deserving families. So ganoon iyon, ang ano…

ARIANNE MEREZ/ABS-CBNnews.com: Sir, on another matter lang, sir. Sir, Budget Secretary Diokno earlier said that the monetary board may further cut interest rates before the year ends po. Sir, when do you think is the right time to resume interest rate cuts to aid growth po and why, sir?

SEC. PERNIA: I thought he said that the interest rate cuts have ended already?

ARIANNE MEREZ/ABS-CBNnews.com: Ayon sir. But tomorrow, sir, magmi-meet po kasi iyong monetary board and he may make an announcement, sir. So—

SEC. PERNIA: Well, you’re speculating.

ARIANNE MEREZ/ABS-CBNnews.com: Sir, sabi niya po kasi—

SEC. PERNIA: Sabi ba niya? Ah talaga.

ARIANNE MEREZ/ABS-CBNnews.com:—tomorrow magmi-meet po iyong monetary board. So, sir, when do you think is the right time to resume interest rate cuts to aid growth po?

SEC. PERNIA: I don’t want to second guess Dr. Diokno. He’s a good friend of mine, and I don’t want to anticipate what he’s going to do because the Central Bank is an independent body. And it’s not good for another agency in government to guess or to second guess what the Central Bank is going to do. So let’s just wait then, tomorrow. Tomorrow na pala eh.

ARIANNE MEREZ/ABS-CBNnews.com: Tomorrow, sir.

SEC. PERNIA: Yeah, so walang ano … there’s not much ano … you just sleep one more night and tomorrow you will find out…

ARIANNE MEREZ/ABS-CBNnews.com: Okay, sir. Sir, last na lang po. Iyong sabi ninyo, sir, meeting iyong 14% na 2022 target would be a walk in the park for next year na. So, sir, ano po ang ini-expect ninyo na poverty incidence na by 2022 if mami-meet po iyong 14 next year?

SEC. PERNIA: My estimate is, I think it’s going to go down to 11%. If you let poverty incidence which is 16.6% now, drop by 2.23 percentage point a year, then we will hit, I think, something like 11 or even less than that.

ARIANNE MEREZ/ABS-CBNnews.com: By 2022, sir?

SEC. PERNIA: By 2022.

ARIANNE MEREZ/ABS-CBNnews.com: Okay, sir. Sir, do you see any roadblock na maghi-hinder po dito?

SEC. PERNIA: Roadblock? Well, there is such a thing as base effect, you know, kasi ang base effect is the higher the number is, the easier for the number to go down. But then, the lower the number becomes, then further decreases in the number will be harder. Iyon ang tinatawag na base effect.

So in effect, we should be—well, if we don’t think about this base effect, if we just go straight line projection of poverty incidence, 6.6 percent minus 6.7 percentage points, how much is that, Jelly? I think that’s—ha?

____: Nine.

SEC. PERNIA: Nine percent na lang ‘no, nine percent ang poverty incidence. Just a straight line calculation of how much reduction will be possible. So it’s really going to be, you know, it’s going to be exceedingly satisfying for everybody I think, if we’re able to bring down poverty incidence, even to 11%.

So I think we will probably change our target for the midterm update of the PDP, from 14% by 2022, we’ll make it to 10 to 12 percent to be sure – to be sure. In other words, 10 to 12 percent possible poverty reduction by 2022 – possible and also, you know, quite reasonable.

JOSEPH MORONG/GMA7: Ma’am, curious lang ako. Doon sa food bundle that you mentioned, you mentioned … for lunch ‘no, monggo at saka dilis. Is that every day?

ASEC. BAUTISTA: Hindi naman po.

JOSEPH MORONG/GMA7: And how did we select iyong kind of food in the—

ASEC. BAUTISTA: Hindi po PSA iyong nag-select noon kasi hindi naman kami iyong nutritionist – we have Food and Nutrition Research Institution. Sila po iyong parang … ito iyong ginamit nila na example kung ano siya. But you can have substitute.

JOSEPH MORONG/GMA7: So you’re basing it on the protein—

ASEC. BAUTISTA: Yes, dapat ma-meet niya iyong calorie requirements kasi hindi puwedeng—ang question nga namin, paano kung hindi ka kumakain noon?

JOSEPH MORONG/GMA7: Papaano kung may gout ka, ma’am?

ASEC. BAUTISTA: Oo, iyon; kaya nga basic siya eh. Kasi kapag lalagyan natin nang hindi lowest possible, puwede niyang sabihin gusto niya ng litson, gusto niya ng manok, so tataas nang tataas iyong price. So ang sini-set natin is the basic minimum.

Now, with this amount, you can buy this food. And this food that you eat will meet the minimum requirements for the person to be healthy; pero bawal sigarilyo at alak.

SEC. PERNIA: So protein and calories can be obtained from other types.

USEC. IGNACIO: Thank you, Secretary Pernia. Thank you sa ating mga bisita. Thank you, Malacañang Press Corps.

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Source: PCOO-NIB (News and Information Bureau-Data Processing Center)