Academic journal article Journal of International Business Research

The Implications of Government's Poverty Reduction Programs on the States of Poverty and Hunger in the Philippines

Academic journal article Journal of International Business Research

The Implications of Government's Poverty Reduction Programs on the States of Poverty and Hunger in the Philippines

Article excerpt


The incidence of poverty has been a prevalent social issue in the Philippines. Poor living conditions are alarming and current measures of poverty incidence are high. Access to basic needs and assets becomes a struggle for households especially to those who belong to the lower income distribution. Even food has become a luxury for some. With income as a measure of individual welfare and the vital factor that links food consumption and poverty, as real income decreases, more households are subjected to poverty and hunger. Previous studies covered poverty statistics and its continuous revisions to capture the real state of poverty in the country which is inclusion of food distribution in poverty measures. This study aims to exposit the existence of food inequality in the Philippines, both in national and regional level. Likewise, this study will examine the source of food inequality by identifying factors through estimation of Engle Curves using the Generalized Methods of Moments (GMM). Lastly, this study will also evaluate the effectiveness of government poverty alleviation programs in addressing the state of hunger through the use of a discrete choice model employing Maximum Likelihood Estimation (MLE). This will be evaluated on a provincial level to examine the effectiveness of implemented programs in detail with regards to household characteristics. Results provide a picture on how deep food inequality go and how this should be addressed by policymakers. Also, results will provide a distinct framework for authorities in gauging how to address implementation of poverty alleviation programs.

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Poverty reduction has been a major challenge for all economies. This led development organizations to make poverty alleviation as its overarching goal as exemplified in the United Nations' Millennium Development Goals (MDG) of 2015. Addressing this problem poses a long standing struggle to the Philippines since this has been the primary target goal of past administrations. Poverty in the country has been persistent that it is sometimes regarded as the basket case of the Southeast Asian nations. According to Schelzig (2005), the Philippines has a noticeable unequal income distribution which supports the conclusion that the Filipinos in the lower distribution is highly susceptible to impoverished living conditions and depravity from basic sustenance and necessities, leaving households vulnerable. Income shocks have debilitating effects especially to the poor, which according to Albert & Ramos (2010) drives households to engage themselves in risky strategies that sometimes have negative effects that are irreversible and eventually succumb to deeper state of poverty.

It has been determined by the International Labor Organization (ILO) as cited by Schelzig (2005) that there are five non-monetary categories that define whether people are poor namely food, water and sanitation, health, education and shelter. In 2009, according to the National Statistics Office (NSO), the share of food to total family expenditures accounts for 42.6 percent, which is a considerable portion of income allocation and signifies as one of the priorities of consumption spending. With the existing income inequality in the Philippines, this can be easily translated to food inequality through the income channel which means that families and individuals in the lower income distribution are unable to gain access to food because of the lack of ability to afford decent food consumption. This is a serious issue because according to Reyes (2001), the poorest Filipino households allocate a significant portion of their income on food. Furthermore, decreasing real income also signifies that capacity to spend on food is restricted; hence, families are forced to concentrate household expenditure on basic necessities.

The National Statistical Coordination Board (NSCB) and NSO come up with measures to assess the depth of poverty in the country. …

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