A fresh drop in hunger

This week’s economic news with the greatest meaning for the Filipino people was the SWS report that Filipino families experiencing involuntary hunger fell to 16.3 percent in the fourth quarter, from 21.0 percent in the third quarter (“Fewer families go hungry,” BusinessWorld, 1/07/2013).

The new hunger rate consists of 12.7 percent that went hungry once or a few times (called moderate hunger), plus 3.6 percent that went hungry often or always (called severe hunger), in the past three months, on account of having nothing to eat. The survey was fielded on Dec. 8-11, 2012, on a national sample size of 1,200 household heads, responding in behalf of the family.

The previous SWS survey of Aug. 24-27, 2012, had found moderate hunger at 18.0 percent, and severe hunger at 3.0 percent. Thus the moderate-hunger percentage fell significantly by 5.3, while the severe-hunger percentage rose slightly by 0.6, in the fourth quarter.

The long SWS experience of surveying hunger quarterly since 1998, totaling 60 survey rounds so far, has enabled discovery of the volatility of hunger. Hunger does not necessarily keep still, but can move significantly, upward or downward, within as short a period as three months. (The rarity of official hunger measurements fosters the illusion that nothing happens. I wish the government would also survey hunger quarterly, so that we can compare findings.)

Furthermore, the simultaneous SWS surveying of hunger and poverty each quarter has enabled discovery that their relationship to each other is not fixed, but fluctuates, over time. Even while hunger is always proportionally greater among the poor than among the nonpoor at a given point in time, these proportions do not keep still over time. As a result it can happen that the hunger rate rises while the poverty rate falls, and it can also happen that the hunger rate falls while the poverty rate rises. Such time-movements are not inconsistencies; I will discuss this more fully in another column.

There is no magic formula for solving the hunger problem. Preliminary econometric research indicates that the quarterly movements in hunger are reactions mainly to changes in food prices, changes in general price inflation, and changes in underemployment and unemployment. At times, the presence of natural disasters and armed conflicts are relevant factors also.

On the other hand, quarterly movements in aggregate economic activity—either Gross National Product (which means “produced by Filipinos anywhere”) or Gross Domestic Product (which means “produced in Philippine territory), per capita—have hardly any correlation to quarterly changes in hunger, except for a few components like agricultural production and government expenditures.

In short, there is no natural “trickle-down” process in the economy. To combat hunger, the government should prioritize consumer price stability and generation of decent jobs over mere economic growth. It should bear in mind that price spikes cause immediate suffering to people without financial reserves.

During 2012, the hunger rate was at 23.8 in March, 18.4 in May, 21.0 in August, and finally 16.3 in December.  Thus, it went forward in the second quarter, and then backward in the third quarter, before going forward again at the end of the year.  For the entire year 2012, the hunger rate average was 19.9 percent.

The complete SWS series of annual average percentages of families in hunger in the Philippines is as follows: 1998, 11.0; 1999, 8.3; 2000, 10.8; 2001, 11.4; 2002, 10.1; 2003, 7.0; 2004, 11.8; 2005, 14.3; 2006, 16.7; 2007, 17.9; 2008, 18.5; 2009, 19.1; 2010, 19.1; 2011, 19.9; and 2012, 19.9 again.

The general rate of growth of the economy has not made a discernible impact on hunger, either from quarter to quarter or from year to year.  Even though per capita GNP/GDP rose throughout 1998-2012, starting from 2004 hunger steadily grew more serious, after being relatively benign at first, the year of lowest-hunger being 2003.  Now there is a flicker of hope that the hunger rate has decelerated. But it is important for the recent improvement in late 2012 to continue further into 2013, before one can assume that the worst is over.

For the entire period 1998-2012, the average overall hunger rate is 14.5 percent, or approximately the situation back in 2005. It is only 1.8 points below the new December 2012 hunger rate of 16.3. A simple continuation of the December 2012 state of hunger into 2013 will already represent a recovery to 2006, approximately.

The 1998-2012 average moderate hunger rate is 11.0 percent, or only 1.7 points below moderate hunger in December 2012.  The 1998-2012 average severe hunger rate is 3.5 percent, or only 0.1 percent below severe hunger in December 2012.

What I fear most is that the current high economic growth rates and other so-called “good news” may distract economic analysts in government, academia and public-interest institutions from doing intensive research on hunger and poverty.

A strong peso does well for importers and Filipinos going on tours abroad, but does poorly for exporters and overseas Filipino workers.  Booming stock prices are nice for stock speculators, but poor Filipinos don’t own stocks anyway. An upgraded credit rating for the country strengthens the government’s ability to borrow money; it assists Filipinos in general, if the government spends its funds wisely.

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