By Chloe Mari A. Hufana, Reporter

LABOR REFORMS are needed to sustain the momentum of receding poverty and to ensure the economy’s benefits reach rural areas, analysts said.

Such measures need to address job insecurity, wage stagnation, and rural underdevelopment, which continue to be reflected in the poverty statistics, they said.

The Philippine Statistics Authority (PSA) recently reported that poverty incidence declined 2.6% in 2023 from 2021, with Indigenous Peoples remaining the most vulnerable group after 32.4% were classified as poor.

Poverty incidence among fisherfolk was 27.4%, farmers 27%, children 23.4%, and self-employed and unpaid family workers 16.1%.

Senior citizens, formal labor, and migrant workers, and individuals residing in urban areas were found to have the lowest poverty incidence at 7.8%, 8.3%, and 10.3%, respectively, the PSA added.

Analysts cautioned that these indicators may not reflect a genuine reduction in poverty, as they rely on government-defined thresholds that have been criticized for being too low.

Assistant Professor Benjamin B. Velasco of the University of the Philippines Diliman School of Labor and Industrial Relations noted the need for policies promoting decent, stable employment instead of short-term aid programs.

“The path to poverty reduction is inclusive growth, and for that, decent jobs must be created — jobs that pay enough, are secure in employment, and come with rights and social protections. But our policies do not enable this,” he told BusinessWorld via Messenger chat. “Wages are depressed, many jobs are contractual, and informal workers remain excluded from labor protections.”

The decline in poverty incidence may simply be explained by an inappropriate definition of who is poor, he added.

“The decline in poverty cannot be explained by wage adjustments since minimum wages fall below poverty thresholds in all regions (using the average work month of 22 days),” he said.

He noted that there were no changes in the rules on contractualization — the practice of denying workers a pathway to permanent employment status, which is known as “endo” — or outsourcing and subcontracting.

“If at all, there have been more gig workers who are denied regular employment, and thus their status is self-employed,” he added.

Federation of Free Workers President Jose G. Matula called for urgent policy changes to address regional disparities, particularly in Mindanao and other rural areas that continue to experience high poverty rates despite economic growth in urban centers.

“Economic growth remains concentrated in the National Capital Region and other urban areas, while rural regions — especially in Mindanao — suffer from underdevelopment, poor infrastructure, and a lack of economic opportunities. Without targeted investments in these areas, poverty will remain entrenched,” he told BusinessWorld via Viber.

His proposals to create a more inclusive economy include a national wage hike to ensure fair compensation for workers across all regions; a P100 billion-rural stimulus fund to generate employment and support agricultural modernization; and stronger protections for informal and contractual workers to transition them into stable, formal employment.

Marie Annette Galvez-Dacul, executive director of the University of Asia and the Pacific Center for Food and Agri Business, cited the urgent need for comprehensive policies to address rural poverty, particularly among farmers and fisherfolk.