Amid weakening economic momentum, the government announced yesterday a sharp improvement in the share of the poor in the population, with poverty incidence falling to a historic low of 9.7 percent last year, or about 6 million people lifted out of poverty, a development experts doubted.

Gross domestic product (GDP) grew by a disappointing 2.3 percent in the second quarter of 2026 from a year earlier, marking the slowest economic expansion since the pandemic, according to the Philippine Statistics Authority (PSA).

Questions remain, however, over whether the government’s poverty threshold adequately captured the true cost of living for Filipino families, casting doubt on what the headline figure says about the country’s actual poverty situation.

Former Finance Secretary Gary Teves said self-rated poverty remains high, meaning that many Filipinos consider themselves part of the marginalized.

“Our economy is like a bibingka, a Filipino rice cake. The government’s goal is to make that bibingka bigger and bigger so that the poorest among our people can also benefit from it. The first ones to eat from that bibingka, however, are the wealthy,” according to Teves.

“If the bibingka becomes smaller, that creates a major problem. People feel that they are having a harder time.”

He added that conditional cash transfers are important, but other forms of cash assistance are not always properly monitored.

“The assistance intended for beneficiaries may end up going to other people. So aid also needs to be reduced. The money saved should be redirected to other parts of the economy,” Teves urged.

He added, “Another problem with aid, especially unconditional aid, is that it can create dependency. Sometimes people become less motivated to look for work because they know they will receive assistance.”

11M still destitute

The recent PSA number represented a sharp decline from 2023, when the official poverty rate stood at a higher level and about 17.5 million Filipinos were classified as poor.

In 2025, the PSA estimated that about 11.08 million Filipinos remained below the official poverty threshold.

The share of low-income families also fell to 6.4 percent, or about 1.9 million families.

The Department of Economy, Planning and Development (DEPDev) heralded that the decline brought the country’s official poverty rate into single digits for the first time and allowed the government to reach the Philippine Development Plan’s poverty-reduction target three years ahead of schedule.

DEPDev Secretary Arsenio M. Balisacan said the early achievement showed that policies aimed at expanding economic opportunities could translate into improved household welfare.

However, the methodology used to determine the poverty threshold drew criticism from the IBON Foundation.

Under the PSA’s official methodology, faster growth in household income relative to the poverty threshold contributed to the decline in the number of Filipinos classified as poor.

In its assessment of the 2023 poverty figures, IBON cited the national average daily per capita poverty threshold of P91. Of this amount, P63 was allocated for food, or about P21 per meal at three times a day, while P28 was allotted for non-food needs.

IBON said the amount did not adequately reflect the cost of maintaining a minimally decent standard of living, citing expenses such as housing, transportation, utilities, health care and education.

Formula queried

The group also questioned the construction of the threshold, saying the food component is based on a least-cost food basket while the non-food component is determined through a multiplier rather than by separately identifying and costing basic necessities.

The criticism does not change the PSA’s 2025 poverty rate calculation under the government’s existing methodology. It raises a separate issue of whether the official poverty line is high enough to capture households experiencing financial hardship despite remaining above the threshold.

The distinction is significant because the official poverty rate measures the number of Filipinos whose income falls below the government’s established poverty threshold. It does not measure all forms of economic hardship or deprivation.

IBON argued that poverty should also be assessed in terms of access to health care, education, housing and other necessities, as well as broader conditions affecting household well-being.

The 2025 PSA data nevertheless show an improvement under the official measure. Household incomes increased substantially faster than the poverty threshold, while the number of Filipinos classified as poor fell by more than 6.5 million from 2023.

The figures do not, however, establish how many households that moved above the official poverty threshold remain financially vulnerable or unable to afford a broader range of basic needs.

The latest data therefore present two findings: the Philippines has achieved a record-low official poverty rate, while questions remain over whether the poverty threshold used to determine that rate captures the full cost of living for Filipino families.\