Corruption is a major social problem in the Philippines. According to Transparency International, the Philippines ranked 139th out of 180 countries in their 2009 Corruption Perceptions Index, showing a slightly improved ranking but still a serious level of corruption. As of 2011, the Philippines ranked 129th, higher than its 2010 ranking of 134th, but still indicating a perceived level of corruption above the midpoint. Poverty is also a significant problem, with over 26% of the population living below the poverty line in 2009, a slow decline from 33.1% in 1991. High population growth, income inequality, unemployment, and a weak investment climate have limited poverty reduction despite average GDP growth of 3.2% annually from 2000 to 2009

1. Social Problems in the Philippines
Corruption
According to a World Bank study in 2008, corruption in the Philippines is considered to
be the worst among East Asia’s leading economies and the country has sunk even
lower among those seen to be lagging in governance reforms. The 2009 Corruption
Perceptions Index published by global watchdog Transparency International, showed
that the situation in the country had improved slightly but still remained serious.
The Philippines ranked 139th among 180 countries included in the index, up from its
previous 141st ranking in 2008. The nation scored 2.4 in the TI index, compared to 2.3
in 2008, which ranked it equal to Pakistan, Bangladesh and the Baltic state of Belarus.
As of 2011, the Philippines came in at 129 with a 2.6 CPI in Transparency
International's list that ranks 178 countries and territories based on how corrupt their
public sector is perceived to be.
This is better than the Philippines' 134th ranking in 2010 with a 2.4 CPI. The CPI score
indicates the perceived level of public sector corruption on a scale of 0 - 10, where 0
means that a country is perceived as highly corrupt and 10 means that a country is
perceived as very clean.
Transparency International-Philippines said some of the factors that contributed to the
Philippines' (2.6) slight jump are the improvement in government service, and cutting
red tape.
The group believes that the government's efforts to prosecute former President Gloria
Macapagal-Arroyo may positively affect the perception on corruption as this shows the
government means business.
The Philippine political arena, unlike other democracies, is mainly arranged and
operated by families or alliances of families, rather than organised around the voting for
political parties.

2. Poverty
Philippines' poverty line marks individuals earning less than 16,841 Peso a
year. Based on the data from the National Statistical Coordination Board,
more than one-quarter (26.5%) of the population falls below the poverty line
in 2009. This figure is a much lower figure as compared to the 33.1% in
1991. The decline has been slow and uneven, much slower than
neighboring countries who experienced broadly similar numbers in the
1980s, such as People's Republic of China (PRC), Thailand, Indonesia
(which poverty level lies at 8.5%) or Vietnam (13.5%). This shows that the
incidence of poverty has remained significantly high as compared to other
countries for almost a decade now. The unevenness of the decline has
been attributed to a large range of income brackets across regions and
sectors, and also unmanaged population growth.
The government planned to eliminate poverty as mentioned in the
Philippines Development Plan (PDP). The PDP for the next six years are
an annual economic growth of 7-8 % and the achievement of the
Millennium Development Goals (MDGs). Under the MDGs, Philippines
committed itself to halving extreme poverty from a 33.1% in 1991 to 16.6 %
by 2015.
Given that the population of the Philippines is increasing at a rapid rate of
2.36% per year, it can be translated as an increase of more than 5,000
people daily in a country, which already has an increase of more than four
million poor people since 1985. In 1985, the absolute number of people
living in poverty was 26.5 million. This increased to 30.4 million in 2000 and
from 2006 to 2009, increased by almost 970,000 Filipinos from 22.2 million
to 23.1 million. As the Philippines has financially limited resources and a
high poverty rate, the rapid increase in population has become a problem
because there is already insufficient resources to support the population,
which leaves much fewer resources to improve the economy. From 2003 to
2006, even though the Philippines experienced above-average economic

3. growth, the poverty incidence actually increased as a result of its
population growth rate.
Poverty reduction has not kept up with GDP growth rates, largely because
of the high unemployment rate, high inflation rate and wide income
inequality. From 2000 to 2009, the economy of Philippines grew by 3.2%
on average annually, which was on par with the economic performance of
its neighbors. However, this recent growth did not get more jobs.
Unemployment in the Philippines has been high in comparison to its
neighbors, at around 7.5% to 8.0% since 2006.
As the world’s second largest archipelago, the Philippines have faced
difficulty in job creation due to its inability to attract more foreign, direct
investments. DiwaGuinigundo, whom is the Central Bank Deputy Governor,
mentioned that while capital flows are turning to the emerging
markets, foreign, direct investments to the Philippines remain relatively low
due to the weak investment climate. The Philippines have hefty business
procedures, poor tax and customs administration, weak protection against
expropriation and high-energy cost. This poor investment climate has
limited the Philippines ability to grow and create jobs. Therefore, the
poverty rate remains constant over the years.