Poverty back in the 60s

I had no advance hint of last Thursday’s Inquirer headline, “SWS: Self-Rated Poverty at 63%, highest since ’03” (Inquirer.net, 1/9/25). I suppose it was the 21-year gap, from the 64 percent of November 2003, that made our poverty report the top news of the day.

Not one of the quarterly Social Weather Stations (SWS) surveys, from March 2004 to September 2024, found poverty in the 60s—the full series of 145 poverty numbers, since April 1983, is charted and tabulated in “Self-Rated Poverty (SRP) at 63% in December 2024, up from 59% in September; Borderline at 11%, Not Poor at 26%.” (www.sws.org.ph, 1/8/25)

Reviewing poverty in the past four decades. SRP was surveyed annually in 1983, 1985, and 1988, twice a year in 1986-1991, and quarterly thereafter (except that in 2020, it was not surveyed until November due to the public transport lockdown). The percentage was in the 70s five times during 1985-1994, with no recurrence (as yet). It was in the 60s and 50s many times; just count them.

It was in the 40s for the first time in 1987 (at 43 in March), and for the second time in 2004, 17 years later. It gradually became fairly common, and most recently was 46 percent in March 2024.

Self-Rated Poverty was in the 30s only once, when it fell to the record low 38 percent in March 2019. Yes, the long-term trend in national poverty is generally downward; but it is rather ragged and volatile, rather than smooth and gentle. (Actually, two of every three point-to-point changes in SRP are statistically significant, or not due to normal sampling error.) This is an important research discovery, made possible by a unique, made-in-the-Philippines system of monitoring poverty on a quarterly basis.

Reviewing poverty in the past year. For 2024, the quarterly SRP numbers are 46, 58, 59, and 63, respectively, which average to 57 for the full year. This is a big leap from average 48 in both 2023 and 2022, average 46 in 2021, and average 45 in pre-pandemic 2019. The last year with an SRP average of 50+ was 2015, nine years ago.

The alarm bell was already ringing hard last June, when national SRP jumped by 12 points, to 58 percent poor from 46 percent in March (see my warning in “Poor, Borderline, Not Poor,” 7/20/24). That involved particularly large jumps of +15 in Mindanao and +14 in Balance Luzon.

In September 2024, the national SRP of 59 was only 1 point up from June, or just short of 60. This time, its jump of +13 in the National Capital Region was the most noticeable. (see “Self-Rated Poverty stays high,” 10/12/24)

In the newest survey of Dec. 12-18, 2024, national SRP was a significant +4 up from September, and finally worsened back into the 60s. There was a combination of poverty stability in NCR (minus 1) and Balance Luzon (no change) with significant increases of +12 in Visayas and +9 in Mindanao.

Thus, the SRP-monitoring system reveals interesting fluctuations in poverty, by area and by timing. These geographical fluctuations are for regional specialists to analyze.

What makes Self-Rated Poverty move the way it does? My SWS colleague Geoffrey “Jeff” Ducanes and I are collaborating on econometric analysis of the long SRP data series, starting at the national level. The initial findings are: (a) a rise in food inflation by 1 pp (percentage point) implies a rise in SRP by 0.68 pp, holding unemployment constant; (b) a rise in unemployment by 1 pp implies a rise in SRP by 1.7 pp, holding food-inflation constant; (c) on the other hand, a rise in the growth rate of Gross Domestic Product implies only a small, statistically insignificant, fall in SRP.

We will be able to analyze the effects of anti-poverty programs, using data in the SWS surveys about families receiving external assistance, by source and by type of assistance.

Our main frustration is inability to quantify the effects of movements in workers’ wages, since historical data on the wages they receive have not been publicly released, despite being included, to the best of our knowledge, in the government’s quarterly Labor Force Surveys. My personal hunch is that growth/stagnation of real wages will prove to be statistically significant, and thus open up aggressive wage-promotion as a means to solve the perennial poverty problem.

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Contact: mahar.mangahas@sws.org.ph.