Against this backdrop, the Philippines faces the following challenges in the social development sector:
● Unsustained Poverty Reduction. While the Philippines was able to reduce poverty from 1991 to 1997, progress from 1997 to 2009 was sluggish and erratic. From 2006 to 2009, poverty incidence among families decreased from 21.1 to 20.9 percent. In the same period, poverty incidence among population rose slightly from 26.4 to 26.5 percent. This outcome is attributed to the slow growth of incomes, increase in household formation, natural disasters and inflationary pressures mainly from rising fuel and food prices. Moreover, wide disparities across regions, provinces and municipalities continue to exist. There is a need to enhance the government's overall antipoverty framework and strategy to ensure complementation and synergy of antipoverty programs and projects, and to put in place a unified targeting system that would result in greater impact.
● Slow Progress towards the Attainment of thee MDGs. There are still huge gaps in terms of achieving the MDGs. The Philippines lags in achieving universal primary education, improving maternal health and combating HIV and AIDS. At the national level, the Philippines is on track to meet the targets on food poverty, gender equality in education, reducing child mortality, reversing the incidence of and death rate associated with malaria; detection, treatment success and cure rates of tuberculosis cases; and access to sanitary toilet facilities.
● Inadequate Financing for Social Services. The share of the social development in the government's expenditure increased slightly from 28.9 percent in 2004 to 31.71 percent in 2009. Through the years, education has received the bulk of the share, although it has not satisfactorily met the requirements of access and quality. Meanwhile, the housing sector had less than one percent of the national budget. Competing claims within the social sector also require more rigorous prioritization and efficient resource utilization for equitable access to social services and assets that will contribute to poverty reduction, job creation and inclusive growth.
● High Population Growth Rate. Although the average annual population growth rate of the country from 2000-2007 decreased to 2.04 percent from 2.34 percent in 1990-2000, the population is still expected to double in 34 years. Such a high population growth is likely to worsen existing poverty by absorbing scarce resources that might otherwise be directed to investment and productive activities. The limited government may encounter increasing difficulties in raising the quality of basic services provision, when its resources are already strained to cover a rapidly growing population.
● Lack of Access to Productive Resources and Employment Opportunities. Poverty is largely caused by the lack of access to productive resources, employment and livelihood opportunities. From a double-digit unemployment rate of 11.9 percent in 2004, the unemployment rate declined to 7.1 percent in October 2010. The underemployment rate has also slightly improved from 19.0 percent in 2009 to 18.5 percent in July 2010. To effectively reduce poverty and inequality, however, generation of an increasing number of highly productive and quality jobs and entrepreneurial opportunities needs to be sustained.
● Adverse Effects of Disasters and Shocks. The confluence of natural and man-made disasters and calamities reverse the pace of development and require the allocation of more resources for relief and rehabilitation efforts. Natural disasters (e.g., typhoons, earthquakes, volcanic eruptions) and the onslaught of extreme weather conditions (e.g., El Niño and La Niña) caused by global warming and climate change, coupled with man-made conflicts fueled by insurgency and unpeace, disrupt the socioeconomic progress in conflict-stricken areas of the country.