Poverty hits a bump

The First Quarter 2017 Social Weather Survey has both bad and good news about Self-Rated Poverty, Self-Rated Food Poverty and Hunger (first reported in BusinessWorld last April 28 and May 3).  These three indicators—all expressed as proportions of families, not individuals—deserve commentary.

In the first place, Self-Rated Poverty (SRP) rose sharply from only 44 percent in December 2016 to 50 percent in March 2017, which is sad. A 6-point change is not a sampling fluke, since the error margin of these surveys is only 3 points, plus/minus. It is the fourth-largest increase in a single quarter since 2010, after one 10-point increase, and two 7-point increases.

The news is sad since the trend was so favorable recently. Personally, I think the culprit is the rise of annual inflation to 3 percent, from only 1.5 percent in the previous two years. In “Poverty has dropped since 2014” (Opinion, 1/21/17), I wrote: “… the rate of inflation in the cost of living should be kept below 2 percent in order for the favorable trend in poverty to continue.  Inflation harms the poor; growth in per capita GNP, even if adjusted for inflation, doesn’t counter it.”

Interestingly, however, Self-Rated Food Poverty (SRFP) barely moved; it was 34 percent in December, and then 35 percent this March.  This reveals that the food-poor are not a fixed proportion of the poor.  Food-poverty can be steady, while general poverty rises, if the deprivation occurs in other commodities or services besides food. Incidentally, food-poverty happens when a family calls its food “mahirap” for whatever reason, not necessarily due to shortage of it.

The good news is that families suffering involuntary Hunger dropped from 13.9 percent in December 2016 to 11.9 percent in March 2017.  It is now lower than all the average annual hunger rates of 2005 to 2016.

Those in Moderate Hunger—i.e., once or a few times—fell from 10.9 to 9.7 percent, and those in Severe Hunger—i.e., often or always—fell from 3.0 to 2.2 percent, from last December to this March.

This reveals that the hungry are not a fixed proportion of the poor, or even of the food-poor, even though hunger is naturally related to poverty and food-poverty. The hungry were 17.1 percent of SRP in March 2017, down from 21.0 percent in December 2016.  They were 20.7 percent of SRFP in March 2017, down from 24.9 percent in December 2016.  There are also some hungry families among those not-poor and those not-food-poor; but these are much fewer. (For the figures in this paragraph, I thank Ms. Josefina Mar of SWS.)

It is not illogical for poverty and hunger to sometimes move in opposite directions over the same quarter.  It has happened before—see the SWS quarterly hunger rates since July 1998 (www.sws.org.ph).  The way to understand such opposite movements is to realize that the hungry are a varying proportion of the poor.

The key determinant of hunger is, of course, the cost of food in particular.  Filipinos deserve access to food at prices no higher than in neighboring countries. The simplest and cheapest way to do this is to end the legal monopoly of the National Food Authority on foreign trade in rice and corn.

It is more important to acknowledge a problem than to agree about its cause. The fundamental way to discover the dynamics of poverty is to measure it at short intervals, like SWS does.

The government has quarterly surveys for underemployment, but not for poverty. The latest official poverty figure is for calendar year 2015.  I think the next reference year will be 2018, which means that poverty will not be officially known again until sometime in 2019.  Is that soon enough?

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