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Sam Beltran

The Philippines has cut its official poverty rate to below 10 per cent for the first time, a milestone officials hailed as proof that millions of Filipinos are climbing the economic ladder.
Yet for families like Vhan Castro’s, there is a big difference between being officially counted as middle class and actually feeling financially secure.
The 34-year-old earns an average of 40,000 pesos (US$650) a month for his family of four through a patchwork of side hustles – from renting out a van for long-haul journeys to running a vehicle repair garage.
His wife, a nurse in Saudi Arabia, is taking a year’s unpaid leave to care for their family, having given birth to their second child two weeks ago. Until she returns to work overseas at the end of her maternity leave, the family depends solely on Castro’s income.
By the official benchmarks, that income places his family in the middle class. But the lived reality – strained by the Philippines’ rising cost of living and fuel prices – is more complicated.

The couple have managed to put aside some savings, but healthcare costs and other concerns weigh heavily on them.
“If you’re not hard-working, it really is hard [to live in the Philippines] … when you’re earning well, you need to maximise it because it’s not going to last forever,” he said, adding that he and his wife had not ruled out emigrating.
Castro is part of a fast-growing cohort of Filipinos who have cleared the poverty threshold, even as domestic and international headwinds raise doubts about how durable those gains will prove.
The scale of the progress became clearer on Friday, when the Philippine Statistics Authority said poverty incidence fell to 9.7 per cent in 2025 – or about 11 million people – down from 15.5 per cent, or 17.5 million, in 2023. It marked the first time the national individual poverty rate had fallen into single digits.
Meanwhile, the percentage of families living in poverty also dropped from 10.9 per cent to 6.4 per cent over the same period.
The milestone comes a month after the World Bank reclassified the Philippines as an upper-middle-income country, after its gross national income reached US$4,850 per capita – above the bank’s US$4,636 threshold.
Defined as the minimum monthly income a family of five needs to cover basic food, shelter, healthcare, education, clothing, utilities and transport costs, the Philippines’ national poverty threshold currently stands at 14,634 pesos (US$237).
Households earning more than that are officially classified as “non-poor”, though analysts note that escaping poverty is not the same as being economically secure.
“For the first time, fewer than one in 10 Filipinos is living below the poverty line,” Arsenio Balisacan, the country’s chief economist, said in a statement on Friday.
“Reaching this milestone ahead of schedule demonstrates that expanding economic opportunities, complemented by effective social protection, can make a meaningful difference in people’s lives.”

Balisacan said nominal incomes grew by about 22 per cent across income brackets between 2023 and 2025, pointing to broad-based gains in purchasing power.
Yet he warned that poverty reduction was likely to slow “amid the more challenging economic environment in 2026”.
“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.
“Current developments may slow the pace of poverty reduction, but early indications do not point to a reversal of the gains we have achieved.”
In July, economic forecasts highlighted the fragility of the Philippine economy, as political uncertainty compounded economic pressures even as inflation eased in June.
Analysts have predicted a sharp slowdown in growth, driven by anxiety over US tariffs and the fallout from recent corruption scandals related to flood-control projects.
Perception vs reality
Official benchmarks contrast sharply with how ordinary citizens feel.
A Social Weather Stations survey conducted in late June found that 49 per cent of Filipino families still consider themselves poor, down only slightly from 52 per cent in March.
A separate World Bank report on the Philippine middle class, published in June, also found that nearly 28 per cent of the population remained at risk of slipping back into poverty, despite what it called “historic progress” in the overall reduction.
“The typical Filipino family earns just enough to stay above the poverty line – but not enough to feel economically secure,” the World Bank report said. “In fact, many families are so close to the edge that a single typhoon, a hospital bill or a lost job can push them back into poverty.”
It added that 61 per cent of the population were at high risk from climate-related disasters, with most households lacking savings or insurance to fall back on.


Government welfare programmes – such as public works schemes for the very poor and targeted cash subsidies during recent price shocks – have helped nudge vulnerable families over the poverty line, according to Michael Ricafort, chief economist at Rizal Commercial Banking Corporation in the Philippines.
Healthcare initiatives such as zero-balance billing in public hospitals have also prevented large medical bills from bankrupting households.
But Ricafort said that these programmes had widened the government’s budget deficit and ballooned national debt.
To build a genuinely resilient middle class by 2040, the World Bank report said Manila must pivot away from short-term relief towards structural reforms.
Ricafort shares this view, believing the Philippines needs longer-term solutions to ensure more people move above the poverty line and stay there.
“More sustainable and structural solutions to lift more people from poverty would be enabling education as the biggest equaliser,” he said, pointing towards nutrition programmes as critical to keeping children in school and preparing them for gainful employment.
Attracting investment to expand formal job creation was also important, he added, alongside modernising agricultural and manufacturing technology, which would lower production costs, boost global competitiveness, help curb inflation and strengthen food security.


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Philippine poverty falls to record low, but many still feel insecure

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Despite cutting poverty to a record-low 9.7 per cent, high costs and climate risks leave millions of Filipino families on edge


Despite cutting poverty to a record-low 9.7 per cent, high costs and climate risks leave millions of Filipino families on edge.


Philippine Statistics Authority

Rizal Commercial Banking Corporation

World Bank Group

Philippine poverty falls to record low, but many still feel insecure

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Despite cutting poverty to a record-low 9.7 per cent, high costs and climate risks leave millions of Filipino families on edge

Despite cutting poverty to a record-low 9.7 per cent, high costs and climate risks leave millions of Filipino families on edge