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Social Climate
Poverty’s the same after 26 years

By Mahar Mangahas
Philippine Daily Inquirer
First Posted 03:25:00 11/07/2009

Filed Under: Economy and Business and Finance, Poverty

THE SWS SEPTEMBER 2009 SURVEY FINDING that 53 percent of Filipino households call themselves mahirap (poor), released this week, indicates that there has been practically no progress in the fight against poverty in the last 26 years.

The new poverty reading is from the 87th in a series of national surveys that started in April 1983, when the self-rating method was first applied nationwide, by the Development Academy of the Philippines. The original survey found 55 percent of household heads calling their families poor. The starting point of 55 and the latest point 53 are statistically the same.

Poverty history is revealed by rapid poverty monitoring. Although it is back where it started, poverty did not stand still in the intervening 26 years. The very next survey, done in hyperinflation year 1985, found self-rated poverty at 74 percent, its all-time record-high.

Thereafter, the following poverty episodes, all statistically significant, are visible in the SWS surveys (quarterly since 1992): the trend in the percentage of Self-Rated Poor (SRP) was downward from 1985 to only 43 percent in early 1987; upward till early 1994, reaching 70 percent; downward till early 1998, going to 57 percent; flat till mid-2001; downward till mid-2004, to 46 percent; upward till mid-2006, at 59 percent; and downward till the end of 2007, to 46 percent again. It spiked up in 2008, to 59 percent again; and, most recently, settled down to 53 percent in September 2009.

Thus, the SRP has fallen to the 40s at best; unfortunately it has only stayed there briefly, so far. Most often, the percentage is in the 50s, as it is now, which means merely returning to its beginning in 1983. Poverty is rather bad when the SRP reaches the 60s, which last happened in late 2003, and is terrible when the SRP hits 70 percent or more, which last happened in 1994.

It is only because of the rapid and frequent measurement of poverty that we know of these historical fluctuations. The tracking of general poverty, food poverty, the people?s poverty thresholds, and hunger by the self-rating approach is inexpensive since it requires addressing only a handful of survey questions to the household head. Such research is at the vanguard of the gradually growing acceptance, in global professional circles, of indicators of subjective well-being as a valid means of tracking meaningful social progress.

The fluctuations in Philippine poverty cannot be explained by the rate of economic growth per capita, since the latter has almost always been positive, and rather smooth. The more likely culprit is inflation. The periodic spikes of inflation immediately cause immense suffering to the poor, from which it takes a great effort for them to recover.

What the Filipino poor really need is not more economic growth (which actually hasn?t been of much benefit to them), but consumer price stability and upward flexibility of wages. Economic growth can hardly trickle down to the poor when the purchasing power of wages is going down.

Official poverty statistics are scant and hence misleading. On the other hand, the dynamics of poverty cannot be seen by those who rely only on the scanty official poverty statistics. These are derived by the National Statistical Coordination Board (NSCB), by applying its official poverty line to the Family Income and Expenditure Surveys (FIES). The super-expensive FIES, with a very long questionnaire because it asks for many financial details, and a huge sample size because it aims to produce statistics for every province, is done only once every three years.

So far, the FIES has been conducted only eight times, namely in 1985, 1988, 1991, 1994, 1997, 2000, 2003 and 2006. The NSCB computations of the percentage of households below its poverty line showed steady declines over the first seven FIES rounds, and gave the misleading impression, up to 2003, that the country?s steady economic growth was smoothly solving the problem of poverty.

However, in early 2008, the NSCB reported that poverty had increased between 2003 and 2006. It was the single official admission that poverty ever got worse; congratulations to the NSCB for sticking to its numbers. (Lately, however, official descriptions of poverty have been omitting the 2003 figure, and instead have been comparing the 2006 end-point favorably with some earlier starting point like 1991; this is sheer intellectual dishonesty.)

The finding of worsening poverty over the last two FIES rounds was revealed only in early 2008. Thus, for the next official FIES of 2009, the official reading of poverty might be revealed only in early 2011, i.e., not until the next administration is in place. Does it look like solving the poverty problem has high government priority?

SWS will report the effect of the recent floods soon. The Third Quarter SWS survey was done last September 18-21, or about a week before storm ?Ondoy? seriously flooded Metro Manila and many areas in Luzon, and therefore did not reflect the suffering it caused.

Fairly soon, however, SWS will be able to report to the public about the effects of Ondoy and subsequent storms on poverty and hunger, since it has used the self-rating questionnaire items in a special non-political survey fielded some days ago, and still being processed. This is separate from the regular SWS Fourth Quarter survey, to be fielded in December and reported to the public early next year.

Contact SWS: www.sws.org.ph or mahar.mangahas@sws.org.ph.



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