Top 1% of Filipinos own over half of Philippine wealth: World Bank

May 30, 2018

Inequality among the Filipinos is high with top 1 percent of the population owns more than half of the nation's wealth, according to a latest World Bank study.

In the launching of "Making Growth Work for the Poor: A Poverty Assessment for the Philippines" on Wednesday in Taguig City, Xubei Luo, World Bank senior economist for poverty and equity global practice, said inequality among Filipinos is one of the factors that needs to be addressed in order to end poverty in the Philippines.

Citing the Credit Suisse Wealth report, the Washington-based lending agency said that the Philippines is the fourth highest economy where the top 1 percent owned more than half of the nation's wealth. The top three were the Russian Federation, Turkey and Hong Kong.

"This high concentration of wealth may have contributed to strong vested interests in the status quo by hindering acceptance of the reforms needed to prompt more inclusive growth and faster poverty reduction," the World Bank said.

"Differences in the quality of human resources, and in the incomes individuals and households can earn, drive a large degree of the inequality of outcomes in the Philippines," it added.

Luo said it is "crucial to break the vicious cycle" of inequality, noting that poorer children are at a disadvantage from the start.

While the Philippines has managed to trim down its poverty rate by 0.9 percentage points per year between 2006 and 2015, however, it "lags behind its peers in East Asian region," Luo said.

Poverty rate is measured by the international poverty line equivalent to $1.90 per day.

Vietnam's annual decline in international poverty rate was at 2.1 percentage points from 2006 to 2014, while Indonesia was 2.2 percentage points from 2006 to 2015.

The World Bank also said other factors which push vulnerable groups into poverty and jeopardize long-term human capital development are frequent natural disasters and persistent conflicts in  part of Mindanao.

To reduce poverty incidence, World Bank stressed the need to create more and better jobs, improve productivity in all sectors, especially agriculture; equip Filipinos with skills needed for the 21st century; invest in health and nutrition; focus reduction efforts in Mindanao; and manage disaster risks and protect the vulnerable. Celerina Monte/DMS