Despite economic growth, huge income inequality among Filipino families still the same

By: Interaksyon.com

Despite economic growth, the wide income gap between rich and poor Filipino families remained the same through the years based on the Gini coefficient, a measurement used to gauge income distribution among individuals or households.

A Gini coefficient of 0 indicates perfect income equality while 1 indicates absolute income inequality.

In 2003, the Gini coefficient among Filipino families stood at 0.46. The income inequality slightly rose in 2006 with the increase of the Gini coefficient to 0.47 before the coefficient went back to 0.46 in 2009 and 2012.

During these years, the Philippines recorded increases in its gross domestic product (GDP) including in 2009, after the country was battered by Storm Ondoy and Typhoon Pepeng and affected by the global economic crisis of 2008.

In 2003, the country’s GDP grew by 4.5 percent, and then 5.2 percent in 2006. In 2009, following the world economic crisis and two extreme weather disturbances, the Philippines still managed to record a GDP growth of 1.1 percent before the growth jumped by 6.8 percent in 2012, the second fastest growth rate in the region, next only to China.

The GDP, which represents the monetary value of all the finished good and services produced in the Philippines, is a gauge to the health of a country’s economy. If the GDP is increasing, it means that the economy is growing. And when there is economic growth, there should be reduction in poverty and income inequality.

However, as the Gini coefficient indicates, the country’s robust economic growth failed to address income disparity among Filipino families. This means that the gains failed to benefit the poorest sectors of the population because the growth was not inclusive.

It is worth noting that based on Gini coefficient, little had changed in the income disparities between rich and poor Filipinos from Marcos to the present administration.

From 2003 to 2012, some regions mostly in Mindanao and the Visayas, had income disparities that were wider than the national average.

In 2003, five of the country’s 17 regions had Gini coefficients that were lower than the national average of 0.4605. These are Region IX (Zamboanga Peninsula) – 0.5197; Region X (Northern Mindanao) – 0.4817; Region XII (Soccsksargen) – 0.4774; Region VII (Central Visayas) - 0.4707; and Region V (Bicol) - 0.466.

In 2006, five regions were also below the national average Gini coefficient of 0.4719. Again, Region IX had the worst income inequality with a Gini coefficient of 0.5196, followed by Region VIII (Eastern Visayas) - 0.4973; Region X - 0.4938; CAR (Cordillera Administrative Region) - 0.4887, and Region VII (0.4769).

In 2009, income inequality worse than the national average Gini coefficient of 0.4641 was again recorded in the same regions – VIII - 0.5008; IX - 0.4915; X - 0.486; VII - 0.4711, and CAR - 0.4658.

In 2012, the following had the Gini coefficients worse than the national average of 0.4605: Region X - 0.4844; Region VIII - 0.4834; Region VI (Western Visayas) - 0.4754; Region VII – 0.4712; and CAR - 0.4675.