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MANILA - In what is his boldest forecast to date, Socioeconomic Planning Minister Arsenio M. Balisacan on Wednesday said poverty incidence in the country will go down this year.
A contrast to his flamboyant predecessor at the National Economic and Development Authority, the soft-spoken Balisacan said "respectable" economic growth and benign inflation since 2010 should lift some Filipinos out of poverty.
Dean of the University of the Philippines before his appointment as socioeconomic planning chief last month, Balisacan replaced Cayetano Paderanga, a fellow economics professor at the UP who also served as NEDA chief during the term of President Benigno Aquino III's mother, Corazon Cojuangco-Aquino.
"I would be surprised if we don't see poverty reduction. Two things: because of the growth and number two, the inflation within this period has been very much tamed. And, as you know, inflation is a very important determinant of poverty because it affects the purchasing power of the poor more than the rich," Balisacan, who earned a reputation in poverty studies, said.
Philippine gross domestic product rose by 7.6 percent and 3.9 percent in the last two years, and is expected to grow 5-6 percent this year.
Meanwhile, inflation has stayed within the Bangko Sentral ng Pilipinas' target range of 3-5 percent since 2010.
Given these developments, the Philippines may have emerged from its "lost decade," Balisacan said, alluding to Japan in the late 1990s when the world's then second-biggest economy stagnated. China has since overtaken Japan.
He said the years 2000-2009 comprised the Philippines' "lost decade," citing the failure of high economic growth rates to make a dent on poverty, which increased from 24.9 percent in 2003 to 26.5 percent in 2009.
"You know what happened in the last decade? Walang nangyari sa poverty talaga, flat lang. The question that would be interesting to ask is if that pattern has remained the same. Of course you expect that we have broken that pattern because of growth and (low) inflation," Balisacan said.
The only potential spoiler is if economic growth in China falls sharply, he said.
This in turn is contingent on a deterioration in the euro zone debt crisis, which would have spillover effects in Asia, he said.
"As of now even the last number that came out of China is very respectable, 8 percent. So despite the fear na bababa sharply yung performance ng China, it did not. And that's good for us because we continue to have a quite robust rate with China," Balisacan said.
Earlier, the National Statistical Coordination Board said the Philippines has to bring down poverty incidence to 16.6 percent if it were to meet the Millennium Development Goal of halving poverty by 2015.
At 26.5 percent in 2009, the Philippines is 8 years behind the MDG, assuming the country could reduce poverty incidence by 2 percentage points every year.
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