Gross regional domestic product and poverty incidence

The dynamics between gross regional domestic product (GRDP) and poverty incidence are key to understanding the economic situation of the Philippines. Metrics like GRDP provide insights into regional economic performance and its impact on the overall gross domestic product (GDP).

According to recent data from the Philippine Statistics Authority, there is a significant historical context when it comes to GRDP trends. In 2019, all 18 regions saw an increase in their respective GRDP values, with impressive growth rates ranging from 4.3 percent to 7.4 percent. Region V led the way in this aspect. While the 2019 data suggests a potential turnaround after decades of decline, the period from 1975 to 2018 painted a bleak picture of economic stagnation across most regions. Only the National Capital Region (NCR) and Region III consistently experienced growth, revealing significant regional disparities in economic development.

Earlier data from the National Economic and Development Authority shows that between 1975 and 2018, only NCR (from 31.6 percent to 36 percent) and Region III (from 8.32 percent to 9.8 percent) managed to increase their GRDPs over a span of slightly more than four decades. In contrast, regions like Bicol saw a troubling trend of “negative growth,” with a decline from 3.5 percent in 1975 to 1.8 percent in 2018. On a larger scale, Luzon’s percentage contribution to the country’s GDP increased from 64.19 percent to 72.8 percent, while that of Visayas from 18.88 percent to 12.5 percent, and Mindanao from 16.93 percent to 14.5 percent, experienced declines.

The correlation between GRDP trends and poverty incidence is significant. Despite the overall decline in GRDP, poverty incidence showed a downward trajectory before the onset of the COVID-19 pandemic in 2020, from more than 60 percent in 1975 to 16.7 percent in 2018 in the country and 21.5 percent in Region V. This indicates that economic growth, as measured by GRDP, does not necessarily lead to poverty alleviation. But factors such as foreign-funded government projects and interventions by nongovernment organizations (NGOs) may have inadvertently contributed to poverty reduction, despite their limited success in stimulating regional economic growth.

An example of this is the Bicol River Basin Development Program in Camarines Sur and Albay, as well as the poverty alleviation interventions by NGOs in Bicol communities starting in the 1980s. Although these interventions were ultimately unsustainable, they did increase the disposable income of beneficiaries.

These findings emphasize the need to reevaluate past interventions and develop more effective strategies to foster regional economic growth. Policymakers must prioritize the equitable distribution of economic benefits and address regional disparities to ensure inclusive development. These insights serve as a catalyst for informed decision-making and strategic planning to shape the future economic landscape of the Philippines.

The juxtaposition of GRDP trends and poverty incidence highlights the complexities of economic development. While GRDP is a crucial indicator of economic performance, its correlation with poverty incidence underscores the importance of taking a holistic approach to development. By addressing regional disparities and implementing targeted interventions, the Philippines can strive toward sustainable and inclusive economic growth.

In the real world, it is worth considering the experiences of China and Vietnam, where millions were lifted out of poverty. Both countries implemented various targeted interventions to address poverty and achieve significant progress toward meeting the Millennium Development Goals. Key strategies employed by each country included economic and agricultural reforms, investments in infrastructure, social safety nets, education, skills development, and health care. Strong government leadership accompanied these targeted interventions.

Nono Felix, [email protected]