With poverty incidence reduced to fewer than one in 10 Filipinos and the Philippines attaining upper-middle-income status early this year, are we finally moving beyond the economic struggles that have burdened the Filipino poor and middle class for as long as anyone can remember?
This is a tough question to answer because so many factors must be considered before anyone can say for sure that the worst of times are behind us and that we’re on our way to sustaining growth that truly benefits not just those at the top of the food chain—the country’s richest elites and the ruling political class (and their protegés).
Amid the onslaught of typhoons and floodwaters last month, a piece of good news offered a sliver of hope that things could get better down the road: the government has trumpeted the 2025 single-digit poverty rate of 9.7 percent as “historic” to show that its antipoverty efforts are working just fine despite continuing headwinds on the local and overseas fronts.
The latest poverty statistics are impressive, indicating that 6.5 million Filipinos were “lifted out of poverty between 2023 and 2025,” a relatively short period. Not only did the share of Filipinos living below the official poverty threshold fall to a historic single-digit rate, but the latest figures also show a rapid decline: 11.08 million people (9.7 percent) were considered poor in 2025, down from 17.5 million (15.5 percent) in 2023, and 19.9 million (18.1 percent) in 2021. The Philippine Statistics Authority (PSA) released these figures on Aug. 21, 2026.
“For the first time, fewer than one in ten Filipinos is living below the poverty line,” Secretary Arsenio M. Balisacan of the Department of Economy, Planning, and Development (DepDev) announced in a statement on Aug. 26, 2026. He said the government reached “this milestone ahead of schedule,” referring to the 9 percent poverty-reduction target by 2028.
Low poverty threshold. But if we look closer, the story is in the details: the government set the poverty threshold at P14,634 per month for a family of five in 2025, compared with P13,873 in 2023 and P11,998 in 2021. The P14,634-a-month poverty threshold—you’re not poor if you earn above this line—is based on the 2025 annual per capita poverty threshold of P35,121, or P96.22 per person per day.
The continued decline in poverty incidence was driven by changes in the poverty threshold and income during the same period. End of story? Not so fast.
The historic rate may not tell the whole story if the poverty threshold the PSA uses remains too low and outdated to reflect reality on the ground—the actual cost of meeting a family’s basic needs. “The issue [is] that PSA’s own chief statistician already admitted, back in 2024, that the food budget behind this threshold was too low to meet basic nutrition. PSA promised to fix it,” said Leonardo Lanzona, an economist (see “PSA: PH poverty hit lowest, single-digit level in 2025,” Headlines, 8/22/26).
Ibon Foundation raised another objection. Under government metrics, a person who spends more than P96.22 per day, or a family of five with an income slightly above P14,634 per month, is classified as “non-poor.” Ibon Foundation said the government’s standard for defining who is poor is “problematic, outdated, and very unrealistic,” because “the food threshold is based on a bare-minimum, least-cost basket” (see “Ibon: Gov’t poverty standard ‘outdated,’ ‘unrealistic,’” Nation, 8/26/26).
The P96.22 daily expense is highly unrealistic—a one-piece fried chicken value meal costs P99, and the poor also spend on nonfood items such as shelter, utilities, transportation, health and education, and clothing. Under this flawed methodology, medical and other emergencies are excluded.
Multidimensional poverty. But the DepDev explained that economic opportunities “expanded amid sustained GDP (gross domestic product) growth, moderating inflation, and generally favorable labor-market conditions.” Balisacan also praised the various ayuda, or targeted assistance, and government livelihood programs that “have helped narrow income gaps over the years” and “have made poverty reduction more responsive to economic growth.”
In apparent response to the stinging public rebuke, the PSA has recently released the first Multidimensional Poverty Index (MPI), revealing that 12.4 percent of Filipino households were classified as multidimensionally poor across education, health and nutrition, housing, water and sanitation, and employment.
“The MPI shows that poverty is not just about what people earn” but “whether Filipinos have access to essential services that allow them to live productive and dignified lives,” Balisacan said in a statement.
This is a better way to gauge poverty incidence because the MPI can assess specific deprivations beyond basic services and living conditions. Poverty is multidimensional, so government programs must be targeted and sufficient to address these deprivations.
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