The will to measure poverty

Last Tuesday, April 29, was a red-letter day for official poverty measurement, when the report of the Philippine Statistical Authority (PSA), “Poverty incidence among Filipinos registered at 24.9% as of first semester of 2013,” marked the first time that the government issued new official figures on poverty after one year, rather than after three years.  It manifested a stronger will of the government to find out what is happening to poverty.

Actual annual reporting, at last. The last previous official report, made on April 23, 2013, referred to poverty in the first semester of 2012 (see my “The reform of official poverty statistics,” Opinion, 5/4/2013). There had been no official poverty statistics for any reference year before 1985.  For the period 1985-2012, there exist only 10 data-points for official poverty, namely 1985, 1988, 1991, 1994, 1997, 2000, 2003, 2006, 2009 and 2012.

Under the old schedule, 2013 and 2014 would have been skipped entirely from the government’s poverty calendar.  The next reference year would have been 2015; its poverty finding would not have been released until early 2016.  Under the new schedule, there is now a poverty figure for 2013—albeit for the first semester only.  It seems that the next figure would refer to the first semester of 2014, and would be reported in May 2015.

On the other hand, within the time span of 1985-2013, economic growth, as given by the change in the Gross National Product, was measured 116 times, since it is done quarterly (a 29-year time span contains 116 quarters).  With the volume of its data so tilted toward economic growth rather than poverty, it’s no wonder that the government does so little study about how poverty moves over time.  Ideally, poverty and GNP should be tracked with equal frequency (see my “Syncing poverty and growth statistics,” Opinion, 6/13/2013).

What happened to poverty, officially? As of the first half of 2013, the official proportion of poor people is 24.9 percent, per the title of the PSA report. The PSA report also puts the official proportion of poor families at 19.1 percent.  The poverty incidence is higher when stated in terms of people, since poor families have so many more children than nonpoor ones, on average. It’s not because the poor prefer it, but because they lack the knowledge and the means to achieve their preferred family size—a situation to be remedied as the implementation of the RH Law gets underway.

The PSA reports that the proportion of officially poor families fell from 22.3 percent in 2012S1 (where S1 denotes semester 1), to 19.1 percent in 2013S1.  This 3.2 point-drop is formidable, if sustainable.  Later I will compare it to the trend in poverty as tracked quarterly by Social Weather Stations.

Official, or top-down, definition of poverty. The official definition, for 2013S1, is family INCOME below P8,022 per month, for a five-person family.  This is the official poverty threshold, which, according to the PSA, enables a family to spend P5,590 per month on food.  The P5,590 amount is the cost of an official daily food menu allowing minimum energy and nutrients for a five-person family for one month, given the prices of the pertinent foods in 2013S1; it is the official food-poverty threshold.

The official menu is extremely skimpy.  In 2011 it was severely downgraded to remove milk for children, all meats (no more pork adobo), and all fried items, among other things.  This resulted in a radical downward adjustment of the official poverty rate in reference-year 2009 by 5.4 points, as computed by the government itself.  (See my “The lowering of the official poverty line,” Opinion, 2/12/2011.)

The PSA derived the amount of P8,022 by simply assuming that food accounts for 70 percent of the spending of a borderline poor family. The government has never actually set minimum standards for nonfood needs like shelter, clothing, electricity, fuel, water for washing, transportation, schooling, etc. so as to find the actual costs of nonfood essentials.  (See my “The poor don’t live by bread alone,” 3/5/2011, and “No shelter in the poverty line,” 1/11/2014.)

Comparison with SWS, or bottom-up, data. Social Weather Stations began surveying self-rated poverty in 1986, and has done it quarterly since 1992.  In 2012, the four quarterly self-rated poverty rates were 55, 51, 47 and 54 (percentages of families, not of persons), in chronological order.  In 2013, the four quarterly rates were 52, 49, 50 and 55, also chronologically.  These rates are posted in the SWS website. The reason they are much higher than the official percentages is this: The people’s standards for poverty—also in the website—are not as stingy as the official standards.

To assess the semestral trend of poverty, let us average the above figures two quarters at a time.  The average self-rated poverty percentages, by semester, were 53 in 2012S1, 50.5 in 2012S2, 50.5 again in 2013S1, and 52.5 in 2013S2. Thus the SWS surveys anticipated the official finding that poverty declined from the first semester of 2012 to the first semester of 2013.  In addition, they show that the decline: (a) occurred as early as in the second semester of 2012; (b) was maintained into the first semester of 2013; and (c) was partially reversed in the second semester of 2013.

SWS has already made a self-rated poverty report for the first quarter of 2014, and alerted key government officials about it.  Watch for it to be published by our media partner BusinessWorld.

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