MANILA, Philippines, June 13 ------ More Filipinos will be plunged into poverty this year even as government cash transfers and wage subsidies attempt to blunt the effects of the economic fallout from the coronavirus disease 2019 (COVID-19) pandemic on the most vulnerable, according to the World Bank. “We expect an increase in the poverty rate,” World Bank senior economist Rong Qian said at a virtual press conference yesterday.
“We did a simulation. Assuming only two months of loss of income in the poor and vulnerable population, the poverty rate can increase by 3.3 percentage points in 2020,” Qian added. He noted that this assumption is based on two months of loss of income with no provision of social protection by the government. Even as the government provides cash subsidies for the poorest households and wage subsidies for businesses struggling to retain their employees, this can only alleviate the ill-effects of the economic contraction. “But the government has provided the (social amelioration program) as well as wage subsidies. Those can compensate partially, but because the economy is expected to contract, we see an increase (in the poverty rate) in 2020,” Qian said.
The World Bank expects the Philippine economy to contract by 1.9 percent this year, reflecting the disruptions caused by the pandemic as well as multiple economic shocks at the beginning of the year.