The Economic Intelligence Unit stated this past month that the Philippines will remain one of the poorest countries in South East Asia despite a robust economy over the past few years.[*]
The London-based think tank said the Philippine economy would continue to be ‘marked b y wide inequalities of income, and the disparity between the richest and poorest households would stay particularly acute.”
EIU says that by 2019 “The Philippines will remain one of South East Asia’s poorest economies with a lower level of GDP per head than the majority of the regions other major economies.”
The report also noted that large numbers of Filipinos would continue to live in poverty despite recent economic gains achieved by the Philippines.
It also noted that rural poor would benefit only to the extend that the government directs spending towards improving the quality of essential services – including education, healthcare and transportation.
The group also said the Philippines is a small market, with a GDP per head estimated at only $2,843 (dollars) at market exchange rates and $6,914 (dollars) at purchasing power parity rates in 2014.
The EIU said they only forecast per capital income in the Philippines at $4,549 (dollars) by the year 2019, rising some from the present $2,843 (dollars).
Strong inflows of money from OFW’s (Overseas Foreign Workers), relatively low interest rates and strong job growth have kept consumer expenditures afloat – without it, the entire economy could easily crash.
The group also said that Philippine banks have been moving away from traditional areas of activity – moving instead towards retail financial projects – creating easy loans for housing, cars, debit and credit cards.
Citing 2013 data, 52% of household spending went towards basic necessities such as food. In recent years those number have spiked.
“Although poverty will remain a problem, continuing healthy rates of economic expansion in 2015-2019 will also benefit the poorer segments of the population,” the think tank added.
[*] The original story was published on MSN Money