Poverty rate falls to single digits in the Philippines as incomes outpace thresholds

MANILA, 21 AUGUST 2026 —

Philippines Achieves Single-Digit Poverty Rate in 2025, Three Years Ahead of Target

Preliminary poverty estimates based on the 2025 Family Income and Expenditure Survey showed that poverty incidence among the population dropped to 9.7% from 15.5% in 2023. This translated to about 11.08 million poor Filipinos, lower than the 17.54 million recorded in 2023.

“For the first time, fewer than one in ten Filipinos is living below the poverty line,” Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said in a statement.

The latest figure was below the government’s 2025 poverty incidence target of 12.9–13.2% under the Philippine Development Plan 2023–2028 Midterm Update Results Matrices, released in May. DEPDev said the country achieved its goal of reducing poverty incidence to a single-digit level three years ahead of schedule, although the 9.7% rate remained above the 2028 target of 8.8–9%.

Poverty incidence among families stood at 6.4%, equivalent to 1.9 million families, down from 10.9%, or about 3 million families, in 2023. The PSA defines poverty incidence among families as the proportion of families whose incomes fall below the poverty threshold, or the minimum income needed to meet their basic food and nonfood needs.

For 2025, the average monthly poverty threshold for a family of five increased by 5.5% to P14,634 from P13,873 in 2023. The PSA attributed the decline in poverty incidence to household incomes growing faster than the poverty threshold between 2023 and 2025.

Mean annual per capita income rose by 22% to P104,072 in 2025 from P85,291 in 2023, outpacing the 5.5% increase in the annual per capita poverty threshold to P35,121 from P33,296. Income growth was also faster among families near the poverty line. Mean annual per capita income among families in the first and second income deciles rose by 23.8% and 22.7% to P30,902 and P45,050, respectively.

However, the average income of families in the poorest decile remained below the annual per capita poverty threshold. DEPDev said the increase in nominal incomes across income deciles between 2023 and 2025 exceeded the cumulative inflation rate of 5% over the same period.

“This indicates that income growth was broadly inclusive, benefiting households across the income distribution,” it said. The department attributed the improvement to expanding economic opportunities amid sustained economic growth, moderating inflation, and generally favorable labor market conditions.

In 2024 and 2025, the country’s gross domestic product growth averaged 5.1%, while inflation and unemployment averaged 2.5% and 4%, respectively, DEPDev said.

Mr. Balisacan said government programs such as the Pantawid Pamilyang Pilipino Program, Social Pension Program, KADIWA, Walang Gutom Program, Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD), and the DOLE Integrated Livelihood and Emergency Employment Program helped narrow income gaps.

“These interventions have made poverty reduction more responsive to economic growth,” he said. However, he cautioned that the pace of poverty reduction could moderate amid a 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. “As we enter the final years of the administration, our priority is to ensure that families who have moved out of poverty do not fall back into it.”

He said sustaining these gains would require a recovery in economic growth, increased investment, higher productivity and job creation, upskilling and reskilling, and timely support for businesses and workers affected by economic and climate-related disruptions.

The Philippine economy grew by 2.6% in the first half as an oil price shock fueled inflation and weighed on household consumption, while a sharp decline in public construction dragged down investment. In the first seven months, inflation averaged 5%, faster than the 1.7% recorded in the same period last year. Meanwhile, the unemployment rate rose to 4.9% in June from 4.8% in May and 3.7% a year earlier. The number of unemployed Filipinos increased to 2.59 million from 1.95 million in June 2025.

The milestone reflects broader regional trends, with neighboring economies also reporting progress in poverty reduction amid post-pandemic recovery and structural reforms. Malaysia, for instance, maintained its poverty rate below 5% in 2024, supported by targeted social assistance and labor market policies. Analysts suggest that sustained growth and inclusive policies remain critical for maintaining these gains across Southeast Asia.

For Malaysia, the Philippines’ achievement underscores the potential of coordinated economic and social interventions in accelerating poverty reduction.

Looking ahead, policymakers in both countries face the challenge of balancing short-term economic stability with long-term structural reforms. The Philippines’ experience highlights the importance of adaptive social protection systems and responsive labor market policies in sustaining poverty reduction amid global uncertainties.

As the region continues to navigate economic headwinds, the Philippines’ progress offers a case study in how targeted interventions and inclusive growth strategies can yield measurable improvements in living standards.