The relationship between the rural banking sector development, gross regional domestic product and poverty reduction in the various regions in the Philippines except for the National Capital Region from 1988-2008

Poverty has been long recognized as one of the national issues that the Philippines faces. An array of studies and researches attempted to obtain the best solution and most accurate reason as to the existence of such issue in this country. In this study, the researchers sought to test whether or not economic growth and financial sector development individually, have a significant causal effect toward the growing issue of poverty. The study focused on the years 1988-2008 by using different variables that represent economic growth, financial development and poverty reduction also, it attempts to verify whether or not there is really a subsisting causal relationship among the three. The results of the study show that except for Region VII, where there proved to be no causal relationship between financial sector development and economic growth, the rest of the regions tested in the study proved to have a significant causal relationship between the three variables. Based from these results, the researchers recommend that it would be beneficial for the country if both borrowers and lenders of the rural bank will be educated, the government would provide for the guarantees in the rural banks, and to promote the strengthening program for rural banks