The 3-year official poverty cycle

Last week, poverty was officially put at 16.6 percent of the population for 2018, down from 23.3 percent in 2015 (“Proportion of poor Filipinos was estimated at 16.6 percent in 2018,” Philippine Statistics Authority press release, 12/6/19).

In terms of families rather than individuals, official poverty was at 12.1 percent in 2018, versus 17.9 percent in 2015. Family-proportions are smaller than population-proportions since poor families are larger than nonpoor families.  I will use the family-proportions here since SWS surveys poverty at the family level.

The new report apparently assembled the PSA surveys for the first and second semesters (2018S1 and 2018S2) into figures for the full year 2018.  Last April, when reviewing the PSA report for the first semesters of 2015 and 2018, I noted its consistency with the SWS quarterly surveys’ earlier showing that poverty fell between those two periods, three years apart (“Consistency in poverty trends,” Opinion, 4/13/19).

The average quarterly percentage of Self-Rated Poor (SRP) families fell from 50 in 2015 to 48 in 2018.  The SWS surveys agree with the PSA that poverty was less in 2018 than in 2015, but also show that it was not a smooth fall.  Average SRP fell initially, from 50 in 2015 to 44 in 2016, but then it rose to 46 in 2017 and rose again to 48 in 2018 (“Two years of rising poverty,” Opinion, 1/19/19). On the other hand, since the Family Income and Expenditure Survey is triennial, the PSA has no idea of what happened to poverty in 2016 and 2017.

I wish the PSA had reported its figures for each half of 2018, to show everyone what happened during that year, according to its measurement system. In the case of the SWS surveys, the quarterly percentages of poor families in 2018 were: Q1 42, Q2 46, Q3 52, and Q4 50, i.e. self-reported poverty rose from the first half to the second half.  Will PSA dispute that there was a rise in the proportion of families below the official poverty line during those two semesters?

The SWS surveys have no predetermined poverty line.  What they do is to ask about the minimum needs of the Filipino people, especially the poor, for their own families in terms of home expenses (not income).  A median SRP Threshold (SRPT) set by poor families of P10,000 per month—the actual median in September 2019—means that one-half (not all) of the self-declared poor say they need it in order not to feel poor.

In 2019Q3, when SRP was 42 percent, the median monthly SRPT was P10,000; this means it satisfied half of the poor.  It was also their most popular single amount, i.e. the mode; one-fourth of the poor specifically cited it. The next most popular amount was P15,000, which was cited by one-fifth of the poor. One-eighth of the poor cited P20,000, and one-twelfth cited P30,000.  The citations of at most P30,000 accounted for 97 percent of the poor.

The demographic data show that those with above-median SRPT have relatively large families, i.e. six persons or more; they are more in urban areas, with higher costs of living.  This shows that the stated needs of the poor are not exorbitant.  They are simply more realistic than the poverty lines set by bureaucrats, who probably are not poor themselves.  As important as its realism is the operational practicality and scientific value of Self-Rated Poverty as an indicator that alerts everyone about poverty on a quarterly basis.

For official poverty figures, 2018 is the last reference year until 2021. There will be no official data for 2019 or 2020; for 2021 the data will be ready only in 2022.  Meanwhile, SWS has already published SRP percentages of poor families for most of 2019: Q1 38, Q2 45, and Q3 42.  For 2019Q4, our interviewers are in the field now, and next month SWS will report poverty for the final quarter of the year.

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