Official income and poverty statistics

The Philippine Statistics Authority’s press release (12/17/2021), “Proportion of poor Filipinos registered at 23.7 percent in the First Semester of 2021,” and its compendium, “Official Poverty Statistics of the Philippines: First Semester 2021,” are the first public outputs from the 2021 Family Income and Expenditure Survey (FIES).

The 2021 FIES had a mammoth sample of 174,007 families, far more than enough for statistically good data for each province and Highly Urbanized City (with a few groupings, since it had 117 sampling domains for the 81 provinces and 33 HUCs). Its intense geographical detail is the FIES’ strength; but it also makes the FIES too costly to do more often than once in three years.

An FIES interview is extremely detailed: It asks for incomes of each family member, from each of several sources; it probes into many categories of family expenditures. SWS does not attempt to obtain income data as a byproduct of its own surveys, since it would take too much interview time to do justice to measuring income.

A year’s FIES has two field periods—one in July, covering the first semester, and a second the next January, covering the second semester—to count family income and expenditures for the full calendar year. The PSA is rightly proud to be able, for the first time, to release first semester poverty figures before the end of the year. Its normal past practice was to release full-year figures by October the following year.

The raw data of an FIES are the income and expenditures of the sampled families. Its most important findings, eagerly awaited by economists, are the averages and variances of these variables by size and across the provinces and HUCs.

The PSA poverty incidences are derived data, from: (a) applying the Food and Nutrition Institute’s daily food cost, in the province/HUC, of a family’s minimum caloric and nutrient needs, (b) adjusting for non-food needs, not by direct observation but by setting the FNRI food-line at a fixed 69.83 percent of the total (a rule of thumb since 2011); and finally (c) checking the FIES distribution of provincial/HUC family income to see how many families fall below the adjusted line. (It would make more sense to check on family expenditure rather than on its income; but that would revise the methodology already used in earlier years.)

The PSA’s basic data on both needs and income pertain to the entire family, rather than to the individuals within it. To me, there is little value-added from counting poor people in addition to counting poor families. The percentages of poor people are always larger than the percentages of poor families because poor families always have more members, on average, than non-poor ones.

2021, so far, compared to 2018. The PSA’s new finding, from first semester data, is that poor families in the Philippines rose from 16.2 percent in 2018 to 18.0 percent in 2021. There are no intermediate data for 2019 or 2020.

Interestingly, the PSA’s poverty rates did not rise everywhere. The proportion of poor families rose from 4.9 percent to 5.2 percent in the National Capital Region; from 11.0 percent to 14.8 percent in the Rest of Luzon; and from 20.4 percent to 29.4 percent in the Visayas. In Mindanao, however, they fell from 28.9 percent to 26.3 percent. (In particular, the PSA reports that poor families in Bangsamoro fell from 55.9 percent to 39.4 percent, while poor families in Basilan fell from 65.5 percent to 46.7 percent. These remarkable improvements, in a time of pandemic, deserve further investigation in the field.)

Comparison with Self-Rated Poverty (SRP) in 2018 and 2021. The SRP series supplies time-points missing from the FIES-dependent PSA series, although from the bottom-up rather than the top-down perspective. Average four-quarter SRP was 48 percent in 2018, and fell to 45 percent in 2019. In 2020, SRP was not surveyed until November, when it was back to 48 percent again.In the SRP series, the national percentage was 42 in March 2018, 48 in June 2018, 49 in May 2021, and 48 in June 2021 (SWS media release, 11/27/21, Table 1). With the first two averaging 46 percent, and the second two averaging 48.5, I think the SRP and PSA first-semester movements between 2018 and 2021 are consistent at the national level. We shall see the SRP for full year 2021 soon.

Looking specifically at the geographical areas surveyed by SWS, and the same four survey dates above (SWS media release, 11/27/21, Table 2), the average first-semester SRP rose, between 2018 and 2021, from 36.5 percent to 41 percent in NCR, from 37.5 percent to 41.5 percent in Balance Luzon, from 60.5 percent to 63 percent in Visayas, and from 51 percent to 55 percent in Mindanao. Thus, only in Mindanao is there a difference of the SRP trend from the PSA trend.

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On this first time ever for Social Climate to be published on Christmas Day, I wish for a happy holiday season for people of all faiths, as well as those with none.

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