Philippines poverty hits record low as critics attack ‘poverty line’
Philippine poverty fell to its lowest level on record last year, with the national poverty rate dropping to 9.7% in 2025 from 15.5% in 2023, the Philippine Statistics Authority (PSA) reported on August 21, according to Manila Bulletin.
The result marks the first time the official poverty rate has fallen below 10%. It also puts the Philippines ahead of the Philippine Development Plan’s target for a single-digit poverty rate, which had originally been set for 2028. The figures were released by the PSA and highlighted by the Department of Economy, Planning, and Development (DEPDev).
DEPDev Secretary Arsenio M. Balisacan said the improvement showed that economic opportunities and social protection were making a difference. He attributed the decline to economic growth, lower inflation and relatively strong employment conditions, in a statement issued on August 21.
The Philippine economy grew by an average 5.1% in real terms in 2024 and 2025. Inflation averaged 2.5%, while unemployment averaged 4%. Nominal household incomes rose by about 22% across income deciles between 2023 and 2025. That was well above the 5% cumulative inflation rate recorded over the same period.
The government says the income gains were broad-based. Balisacan said lower- and middle-income households recorded stronger purchasing power, rather than the improvement being concentrated among higher earners.
Government support also helped. Cash transfers and emergency employment programmes provided additional income to vulnerable households. Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp, said targeted assistance helped poorer Filipinos manage higher prices. He also pointed to subsidies for transport workers, farmers and fisherfolk during periods of higher oil prices.
Healthcare support was another factor. Ricafort said government programmes such as zero billing may have prevented some households from falling into poverty by reducing the impact of large medical expenses.
According to Manila Bulletin, the government is now facing a different challenge: keeping households above the poverty line. Balisacan warned that weaker global and domestic conditions could slow the pace of improvement. He said policy should focus on workforce skills, targeted investment and social protection that can respond when households face economic shocks.
Ricafort also warned about the cost of relying heavily on government assistance. Large support programmes can increase the budget deficit and add to public debt. He argued that longer-term gains require better education, nutrition, job creation and investment.
Poverty line draws criticism
The government’s interpretation has faced strong criticism from Rigoberto D. Tiglao, a columnist for The Manila Times. Tiglao questioned whether the 6.5mn people counted as having moved out of poverty had actually experienced a significant improvement in living standards.
His criticism focuses on the level of the official poverty threshold. The PSA’s per-capita poverty threshold rose only slightly, from about PHP91 ($1.45) a day in 2023 to PHP96 ($1.53) in 2025. For a family of five, the 2025 threshold was PHP14,634 a month. Tiglao argues that this creates a large gap between being officially classified as non-poor and being financially secure.
The income distribution data illustrate the problem. The poorest 10% of Filipinos had an average daily income of PHP85 in 2025. The second income decile averaged PHP123. Since the second group’s average was above the official poverty line, a large number of people could move out of the official poverty category without seeing a major change in their living conditions.
Tiglao estimates that around 5.8mn people in the second income decile could account for a large part of the 6.5mn decline reported by the PSA. He argues that moving from an income of PHP85 per day to just above PHP96 does not amount to a meaningful escape from poverty.
Other measures also produce much higher poverty estimates. The IBON research group estimates that around 70mn Filipinos, or roughly 62% of the population, live on PHP22,000 ($352) a month or less. Its threshold is substantially higher than the PSA’s official poverty benchmark.
Social Weather Stations, an independent social research institution in the Philippines, provide another measure. Its June 2026 survey found that 49% of Filipino families rated themselves as poor, up from 47% in 2023. Self-rated poverty is not directly comparable with the PSA’s income-based measure, but the difference is large enough to raise questions about what the official figure captures.
According to The Manila Times, minimum wages provide another reality check. Tiglao cited labour department figures showing 4.7mn minimum-wage workers earning PHP695 per day. He argues that 6.5mn fewer Filipinos were classified as poor under the PSA's official poverty measure.
Ateneo de Manila University economist Leonardo Lanzona has raised a similar concern about the poverty threshold. He said the PSA’s food budget was already considered too low to meet basic nutritional needs. A promised revision had still not been implemented by late 2025.
The debate is therefore not simply about whether poverty fell. Under the PSA’s methodology, it clearly did. The larger question is how much the official number says about living standards.
The government has evidence of progress: stronger household incomes, 5.1% average real GDP growth, 2.5% average inflation and continued employment gains. Social programmes also helped households absorb economic shocks.
But the criticism highlights a key weakness in relying on one threshold. A household can move above PHP96 per person per day and still have little protection against food inflation, healthcare costs, unstable employment or other shocks.
The Philippines therefore enters the final years of its current development plan with a strong official poverty figure but a harder policy test. Keeping the rate below 10% will require more than moving households marginally above the poverty line. Sustainable progress will depend on higher incomes, productive employment and stronger economic security for households that remain close to the threshold.
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