CONCLUSIONS

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Economic growth sustained over a long period is the key to the poverty

problem in the Philippines. This growth mediates the development of

human capabilities for meeting basic needs. Indeed, where chronic poverty is

pervasive owing mainly to the failure of the economy to generate productive

employment opportunities, it is hard to imagine a more enduring solution

to the poverty problem than one requiring policy and institutional reforms

aimed at enhancing the economy’s capacity to grow and generate these

opportunities.

However, while growth is necessary, it is not a suffi cient response to the

poverty problem. The reason is quite simple: socio-economic conditions

and circumstances of households in society vary considerably. Indeed, the

response of the income of low-income groups to growth has been quite

weak in the Philippines compared with that in major East Asian countries.

Policies and institutions thus need to be made pro-poor as well. Improved

access of the poor to basic services, particularly education and health, is

a fundamental element of such reform. This necessarily involves diffi cult

choices owing to the country’s fi scal constraint and tightly competing uses

of government funds.

The poverty alleviation programs examined in this chapter provide

examples of targeting schemes. However, the funding they have received

has been modest and the limited evaluations available suggest that their

impact has been modest also. The simulation exercise conducted here has

shown that gains to the poor can occur through packages of activities of a

general (that is non-targeted) nature. In an environment of weak governance

and poor delivery of services to the poor this simple lesson needs to be

borne in mind.