Poverty’s not falling yet
The new figure for self-rated poverty in the Philippines is 53 percent, as of March 27-30, 2014. It was first published last Tuesday in the item, “Poverty down slightly in latest SWS poll” (BusinessWorld, 5/6/2014), that pointed to the drop of two points from the 55 percent in the previous SWS quarterly survey last December.
Though two points is not statistically significant, any fall in poverty is most welcome, since small falls, sustained over time, can cumulate to a significant change. One should consider what happened over several quarters, not just over one.
In the four SWS quarterly surveys of 2013, the percentages of the self-rated poor were 52, 49, 50 and 55, in March, June, September and December, respectively. The average is 52 percent for the whole of 2013. There is no drop in the first quarter of 2014, when one takes a five-quarter perspective.
Offsetting changes in areas. However, there were significant movements at the subnational level. Compared to last December, self-rated poverty fell in the National Capital Region by 15 points (from 43 percent to 28), but rose in Mindanao by 11 points (from 59 to 70). Compared to December, self-rated poverty was down by three points in the Balance of Luzon (from 57 to 54), and up by four points in the Visayas (from 63 to 67).
Since the error margin is six points at the area level, the past quarter’s changes were statistically meaningful, but offsetting, in NCR and Mindanao. In the Balance of Luzon and the Visayas, on the other hand, not much happened. Area-level movements (as well as nonmovements) in poverty should be heeded by economic research institutions, and analyzed in relation to local events.
Self-rated food poverty. The Social Weather Surveys also ask household heads to rate their families’ food. Those rating their food as poor (in quality and/or quantity) were 39 percent in March 2014. This followed self-rated food-poverty percentages of 39, 40, 37 and 41 in March, June, September and December 2013, respectively, with an average of 39. So the new percentage is not a decline from the full year of 2013.
By area, the new self-rated food-poor percentages are 25 in NCR, 39 in the Balance of Luzon, 48 in the Visayas, and 40 in Mindanao. (The official food-poverty rate in NCR is less than one-half of a percent, which to me is incredible.)
The self-rated food-poor often are also self-rated poor, but not always. This is unlike the official system where the food-poor are also poor a fortiori.
The people’s standards of poverty. Self-rated poverty is measured from the bottom-up, based on what household heads say not only about their poverty situation, but also about their needs. It accepts the right of every family to set its own standards or norms.
In the Social Weather Surveys, households that rate themselves as poor are then asked how much money per month they would need for home expenses in order not to feel poor. This gives the Self-rated Poverty Threshold, which is a social indicator in itself. Home expenses are specifically explained to the respondents as excluding all work-related expenses such as transportation to work, which still have to be absorbed by workers’ wages.
The surveys exhibit a concave relationship of the self-rated threshold to family size. This means that families of six members, for example, need a budget that is less than twice what families of three members need; for example, they do not need a home twice as large. This is more realistic than the official system that sets the threshold on a per capita basis, i.e., proportional to family size.
As of March 2014, the median of the poverty thresholds of poor households in Metro Manila is P15,000 per month. Poor households in the Balance of Luzon, Visayas, and Mindanao all have medians of P10,000 per month. Since a median is the midpoint of the observations, it is not what satisfies all of the poor, but only half—the poorer half—of them. Since these thresholds come from them, they are surely more acceptable to the poor than the official thresholds.
Food-poor household heads are also asked how much monthly food budget they need so that their food will not be poor. For March 2014, the medians of their responses are P7,000 in NCR, and P5,000 in the Balance of Luzon, Visayas and Mindanao.
Rapid tracking of poverty. The great advantage of subjective measurement is that it is inexpensive and capable of rapid repetition over time. By adopting the self-rated system, SWS tracked poverty semi-annually during 1986-1991, and then quarterly ever since 1992.
Thus the new SWS poverty figure, for the first quarter of 2014, is nine months more up-to-date than the new official poverty figure released last April 29, pertaining to the first semester of 2013 (see “The will to measure poverty,” Opinion, 5/3/2014). Over the next three quarters, the time-advantage of the self-rated poverty system will grow further.
The long-term trend. Based on annual averages, the annual self-rated poverty percentage was flat over 2004-2013 in the range of 48 to 53. What Socioeconomic Planning Secretary Arsenio Balisacan has called the “lost decade” is not yet over.
It is only from a perspective of several decades that one can see a decline in poverty. The annual self-rated poverty percentage was between 57 and 61 during 1995-2003, after being mostly in the upper 60s during 1986-1994. The history is not one of smooth decline, but of “Terraces of poverty” (Opinion, 11/19/2011).
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