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Monday, May 19, 2008
Business

Soaring food prices forcing millions of Filipinos into poverty

Soaring food prices are forcing millions of Filipinos into poverty, the Asian Development Bank said in a study released here Sunday.

"Increases in food prices have enormous impacts on poverty" in the Philippines, where poor people spend nearly 60 percent of their income on food, the Manila-based lender said.

The Philippines is one of the world's biggest rice importers and the government estimates a third of the country's 90 million people live on a dollar a day or less.

Inflation spiked to a three-year high of 8.3 percent last month due mainly to surging prices of rice and petroleum products, which are at all-time highs.

A 10 percent rise in food and non-food prices "will lead to an additional 2.3 million and 1.7 million poor people, respectively," the ADB study said.

Between January 2007 and March 2008, rice prices have risen at an annual pace of 22.9 percent, the study said, urging Manila to "direct government policies toward stabilising food prices."

"Monetary policy may not be an effective tool to combat rising inflation," it said, adding, "such policies may push the economy into recession, which will hurt the poor even more.

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