Nearly 3 in 10 Pinoy households face poverty risk

By Joseph Bernard A. Marzan

QUEZON CITY — Nearly three in 10 Filipino households remain vulnerable to falling into poverty despite gains in poverty reduction, according to a discussion paper released by the Philippine Institute for Development Studies.

The study found that while poverty incidence fell to 10.9% of households in 2023, 30% were considered vulnerable, or at risk of slipping below the poverty line because of economic shocks.

That means vulnerability was 2.75 times higher than the official poverty rate, highlighting a much larger at-risk population than traditional poverty measures capture.

“Traditional poverty measures underestimate the at-risk population,” the authors said, emphasizing that poverty should be viewed as dynamic rather than static.

The report, titled “The Middle Class and Vulnerability to Income Poverty: Implications for Social Protection in the Philippines,” was published Jan. 28, 2026, and was authored by PIDS Supervising Research Specialist Deanne Lorraine Cabalfin, Senior Research Fellow Jose Ramon Albert, and Research Analyst Mohammad Mahmoud.

It noted that the Philippines made significant progress in reducing poverty over the past two decades, with poverty incidence declining from 24.9% in 2003 to 15.5% in 2023.

However, the COVID-19 pandemic exposed the fragility of those gains, temporarily reversing progress and pushing more households into economic insecurity.

The study identified income volatility as the primary driver of vulnerability, affecting 86% of vulnerable households, while 73% of the highly vulnerable had persistently low incomes.

Sharp disparities were also observed across geographic areas.

Rural households faced significantly higher vulnerability at 43%, compared with 20% in urban areas.

In some regions, the situation was more severe.

Vulnerability ranged from 9% in the National Capital Region to 76% in rural areas of the Bangsamoro Autonomous Region in Muslim Mindanao.

The findings underscored the growing size of the near-poor population, or households that are no longer classified as poor but remain highly susceptible to economic shocks.

As of 2023, low-income but nonpoor households accounted for 37.8% of total households, or about 10.4 million families.

Combined with those living below the poverty line, nearly half of Filipino households were either poor or economically vulnerable, the study said.

The PIDS paper said social protection policies must evolve beyond reactive poverty relief toward proactive resilience-building measures.

These include income stabilization mechanisms, expanded insurance coverage, infrastructure development, education, and climate risk management to protect households from shocks.

“Social protection must evolve from reactive poverty relief to a broader and proactive focus on resilience building,” the study stated.

The study also highlighted structural factors driving vulnerability, including labor market informality, health-related financial shocks, exposure to natural disasters, and limited household savings.

The Philippines aims to become a predominantly middle-class society by 2040 under the government’s long-term development vision, but the researchers warned that achieving this goal would require stronger household resilience and broader social protection systems.

“Achieving the 2040 vision requires bold policy reforms that expand social protection to universal coverage aligned with upper middle-income country standards,” the study concluded.

In a public webinar on April 16, Albert said the study was anchored on the idea that poverty is often viewed too narrowly, even though many families may be one illness or disaster away from falling into poverty.

“Usually, in a country where there are poor people, we would want to decrease these numbers. In the Philippines, when we look at the numbers, we can see that the number of poor people is coming down over time. But that’s only half the story,” Albert said.

“We have families who are possibly in the margins for now, who with just one happening, they may fall [into further poverty], [like] an illness in the family, disasters, job loss, or like right now, when there are price increases due to the conflicts in the Middle East,” he added.

Albert also said during the webinar that poverty “needs both a cure and prevention,” stressing that escaping poverty also requires readiness for future shocks.

“We’re looking at a dual framing, that when we look at poverty, it needs not only a cure, but also to prevent the poor from [continuing to] be poor in the future and for those who are not poor to fall into poverty,” he said.