THE Marcos administration may have reached a single-digit poverty rate ahead of its 2028 target, but economists cautioned that the headline improvement may be masking gaps in how poverty and living standards are measured.
On Friday, the Philippine Statistics Authority (PSA) reported that poverty incidence fell to a historic low of 9.7 percent in 2025, equivalent to 11.08 million Filipinos. This was significantly lower than the 15.5 percent recorded in 2023 and 18.1 percent in 2021.
At the household level, poverty incidence declined to 6.4 percent, or 1.90 million families, from 10.9 percent in 2023 and 13.2 percent in 2021.
Socioeconomic Planning Secretary Arsenio M. Balisacan said reaching the single-digit poverty rate ahead of schedule ‘demonstrates that expanding economic opportunities, complemented by effective social protection, can make a meaningful difference in people’s lives.’
However, Ateneo de Manila University economist Leonardo A. Lanzona Jr. said the poverty threshold used for the 2025 estimates may not accurately capture living conditions because it remains based on an outdated methodology.
‘The ruler used to measure or the poverty threshold seems outdated, and that matters for how much we should trust the number,’ Lanzona told the BusinessMirror.
Based on PSA data, an individual is only considered poor if his or her monthly income falls below the per capita poverty threshold of P2,927 per month, equivalent to P35,121 annually.
For a family of five, the poverty threshold is at P14,634 per month.
These thresholds were about 5.5 percent higher than the P2,775 monthly per capita threshold and P13,873 monthly threshold for a family of five in 2023.
Lanzona pointed out that the PSA had earlier acknowledged concerns over the food component used in setting the poverty threshold, particularly the roughly P21 per-meal budget that critics said was too low to adequately meet basic nutritional needs.
The agency has been working on a revised methodology, but this has yet to be incorporated into the latest poverty estimates.
‘The 5.5-percent increase we’re seeing is consistent with the old, admittedly-too-low threshold, not the corrected one,’ he emphasized.
Living standards skewed
Former Socioeconomic Planning Secretary Dante B. Canlas raised a related concern, noting that the poverty measure does not provide a broad-based picture of people’s living standards.
‘One criticism of this measure is it’s all based on nominal income but leaves out social indicators like child nutritional status and adult life expectancy,’ Canlas told the BusinessMirror.
He explained that the PSA’s poverty metric is based on a menu designed to meet minimum caloric requirements, with certain items deemed non-essential excluded from the basket.
This means the measure primarily determines whether household income is sufficient to meet a prescribed set of basic food and non-food needs, rather than capturing broader indicators of well-being.
Tougher road ahead
The economists also acknowledged a tougher road ahead for the Marcos administration in sustaining the ‘gains’ from poverty reduction.
Canlas warned that the slowdown in gross domestic product in recent quarters, alongside elevated inflation, could put these gains at risk.
‘As income inequality persists, the poor are likely to experience sharper income declines and slip further into poverty,’ he said.
PSA data showed that the economy expanded by 2.6 percent in the first half of 2026, less than half the 5.4-percent growth recorded in the same period last year.
Inflation, meanwhile, averaged 5 percent in the first seven months of 2026, significantly higher than the 1.7 percent recorded in the same period last year.
Canlas said a further slowdown in the second half could stall poverty reduction, particularly as recent typhoons and flooding threaten to weigh further on economic activity.
He added that delays in implementing the minimum wage increase in the National Capital Region could also leave low-income workers at a disadvantage.
Lanzona, for his part, said these pressures highlight the importance of viewing recent poverty data with caution.
‘The poverty rate looks good right now for two reasons that have nothing to do with today’s economy: it reflects last year’s conditions, and it’s measured against a bar that was already considered too low even before this year’s price shocks even started,’ he said.
The Ateneo economist emphasized that the achievement of a single-digit poverty rate remains reversible, as the current economic squeeze has yet to show up in official poverty data.
‘Calling this a durable win is premature on two counts: the current economic squeeze isn’t captured yet, and whenever the threshold finally gets the update PSA itself says it needs, poverty could look meaningfully worse overnight-not because people got poorer, but because we started measuring more honestly,’ he added.
Poverty gains unlikely to reverse
Secretary Balisacan, however, said the gains in poverty reduction are unlikely to be reversed despite the more challenging economic environment this year.
‘Current developments may slow the pace of poverty reduction, but early indications do not point to a reversal of the gains we have achieved,’ he said.
He said the government’s priority is to keep families that have moved out of poverty from falling back below the threshold.
Sustaining the gains, Balisacan added, will require a recovery in economic growth, stronger investment and productivity, continued job creation, and upskilling and reskilling for emerging sectors.