Who is treating the poor like dirt?

A number of our legislators in the House of Representatives are waxing indignant at the “magic”/“deception”/“window dressing” practiced by the National Statistical Coordination Board (NSCB) to make it appear that poverty incidence—the percentage of Filipino families/population living below a predetermined poverty line—had significantly decreased from  26.3 percent to 20.9 percent. And naturally they want to conduct another investigation.

How was the NSCB supposed to have pulled off this decrease in poverty incidence? By changing its methodology for measuring poverty.

And the reason for this so-called deception? Well, if the newspaper reports are accurate, the claim of NSCB critics is that the reduction was meant to justify the government’s massive spending for the poor, specifically the conditional cash transfer (CCT) program. This, I must say, sounds like twisted logic. If the government wants to justify its “massive spending,” wouldn’t it want to show that poverty has increased instead of decreased?

But let’s not get ahead of ourselves.  Let’s start with the charges of bad faith against the NSCB.  As a long-time (very long) student of Philippine poverty, and a regular user of NSCB data and the analyses thereof, I say those charges are completely baseless. I have never found our government statisticians in the NSCB and in the National Census and Statistics Office to be anything but competent, honest and professional. They never knowingly allow themselves to be “used” or to be persuaded to fudge data.

So where lies the problem? In a word, misappreciation by critics of the data and methodology used in their generation. Whether in good faith or in bad, I will not speculate.

Let’s try to clarify:

The 26.3 percent poverty incidence of families referred to above is the estimate for 2009, using the old methodology. And the 20.9 percent figure is the estimate for 2009, using the new methodology. The two are not comparable. In other words, neither the NSCB nor, to my knowledge, anybody in the present government has claimed that there was a decrease in poverty of 5.4 percentage points or a 20-percent decrease in family poverty incidence, in whatever timeframe they want to choose. The government would more likely want to show that there was a large increase in poverty during the previous administration.

What can and should be compared are the trends in poverty over time, using the same methodology. And whether the old or the new methodology is used, they show the same direction of movement. For example, using the old methodology, family poverty incidence would have been estimated at 24.4 percent in 2003, 26.9 percent in 2006, and 26.3 percent in 2009. An increase, and then a decrease. Using the new methodology, the family poverty estimates are 20.0, 21.1 and 20.0 percent respectively, also showing an increase, and then a decrease. The data also show that, no matter what the methodology, the number of poor families (as well as the number of poor people) increased between 2006 and 2009.

But how come a new methodology was chosen that results in much lower poverty incidence at any given time than the old methodology?

Anyone who wants to get into the technical details, the time line, the issues can go to the NSCB website for enlightenment. The NSCB makes no effort to hide anything, giving the history (the work started in 2003), the people involved (e.g., the overall chair was Celia Reyes of the Philippine Institute for Development Studies and the chair of the Small Working Group on Estimating Poverty Thresholds was Arsenio Balisacan of the UP School of Economics—both poverty experts).

But the move to change the NSCB methodology did not originate from some politico or high official. It originated from academics and professionals working on poverty, and the story should remove all doubts regarding motives. What is incontrovertible is that there was general dissatisfaction with the official methodology for computing poverty thresholds, because it did not allow for comparisons across space and over time. This dissatisfaction led Balisacan to construct an alternative methodology, which addressed those problems, and it is this methodology which poverty researchers (including the World Bank and the Asian Development Bank) adopted.

It must be pointed out that the Balisacan methodology resulted in poverty estimates that are consistently—without exception—lower than the official estimates, the difference ranging from 4 to 11 percentage points (estimates for 2003 and 1985, respectively). It should also be noted that nobody ever accused Balisacan of trying to reduce the magnitude of the poverty problem. He is acknowledged to have clarified the problem and measured it in as objective a manner as possible.

It took literally years—about a decade—and all kinds of arguments before the NSCB even consented to review its methodology with respect to space and time comparability. I once described the process as dragging Romy Virola (head of NSCB) kicking and screaming to the table. But come he did. And the result is the “refined” methodology. Whose estimates, by the way, are now adopted by poverty researchers, including Balisacan.

In sum, there was nothing underhanded about the adoption of the new methodology.  No conspiracy to hoodwink the Filipino people. All was done in order to improve the quality and relevance of the data, as well as their applicability for policy and planning.

It is not the NSCB that is exploiting the poor, or treating them like dirt. Physician, heal thyself.