Poor and near-poor

The more that poverty is scientifically quantified, the more it can be understood, and thereby better dealt with. Poverty is not static. It can change quickly, upward or downward, and can change at different rates in different locations. SWS has discovered this from quarterly surveys in four broad geographic areas of the Philippines. Other institutions will see it for themselves by doing the same.

Poverty has a continuum. There is no black-versus-white distinction of the poor from the nonpoor. Poverty has as many degrees and dimensions as social science research is able to describe. SWS also monitors regularly the people’s minimum budgetary needs to avoid feeling poor.

Defining poverty for program targeting. The government, as it should, has its own definition of poverty for program use. In 2008, the Department of Social Welfare and Development (DSWD) adopted a Targeting System for Poverty Reduction for identifying potential beneficiaries of its social protection programs and services. In 2009, the National Statistical Coordination Board (NSCB), producer of the official poverty line, resolved to support the DSWD targeting system. In March 2010, Executive Order No. 867 directed all national government agencies to adopt the DSWD system to identify beneficiaries for their own social protection programs also.

Listahanan: talaan ng pamilyang nangangailangan is the Filipino term for the National Household Targeting System for Poverty Reduction. The system already has a database of millions of families, with data on 46 variables on family welfare, for assessing their eligibility for propoor programs and services.

Disruption due to lowering of the official poverty line. Then, in February 2011, after the DSWD had already identified very many conditional cash transfer (CCT) beneficiaries, using the official poverty line, the NSCB suddenly lowered its line by 11.8 percent for reference year 2009, effectively reclassifying one million families nationwide as “not really poor.” This prevented the Philippines from appearing to have the worst poverty in Southeast Asia (see “The lowering of the official poverty line,” Opinion, 2/12/2011).

The official minimum daily food menu that had been in place since 1992 was cruelly downgraded, to eliminate milk for children, meats, fried foods, and fruits aside from one banana. Viands were limited to (boiled) fish and vegetables. In this way, the official estimate of Metro Manila poverty was exaggeratedly reduced to only 2.6 percent of all families in 2009 (see “Is poverty gone from NCR?”, Opinion, 2/11/2011).

But there were many families already benefiting from the CCT program, chosen by means of the old poverty line, that became ineligible under the NSCB’s new line. They could not be delisted from CCT; such patent injustice would have caused a furor. They became “inclusion errors” instead, as though no longer deserving of government assistance.

Compassionate targeting, by means of a Near Poverty Threshold. New research presented last week by Vicente Paqueo, the foremost Filipino expert on CCT, shows that the present official poverty line is too low for assurance that those slightly above it do not become officially poor very soon. By studying the incomes of a panel of families in several national surveys of 2004-2010, he and his colleagues have estimated that family income should be at least 28 percent above the official line in 2004, to reduce their risk of being poor anytime up to 2010 to less than 50 percent.

Paqueo et al. call this minimum safe family income the Near Poverty Threshold (NPT), and recommend its use for eligibility to social protection programs, on the ground that preventing the near poor from becoming poor is a cost-effective strategy for poverty reduction.

The official national average poverty line income is P8,022 per month, for a 5-person family, as of the first half of 2013 (see “The will to measure poverty,” Opinion, 5/3/2014). This implies a national average NPT of 8,022 x 1.28 = P10,268 per month. (Since official poverty lines are constructed at the provincial level, so too would there be provincial NPTs.)

The NPT is consistent with the median self-rated poverty threshold. In the June 2014 Social Weather Survey, 55 percent of households rated themselves as poor in the sense of mahirap. When asked what budget for monthly home expenses would suffice for them not to feel poor, their median responses were P12,000 in the National Capital Region, and P10,000 in the Balance of Luzon, Visayas, and Mindanao, with the national median at P10,000.

The SWS median poverty threshold is the monthly home consumption that separates the lower half from the upper half of the mahirap, i.e., the “lower-mahirap” and the “upper-mahirap,” with each half having 27.5 percent of families in June 2014. The family’s minimum income need is larger, since home consumption excludes costs such as transportation to/from work, which might add P500-1,000, depending on family circumstances.

Thus the official poor plus the near-poor appear quite consistent with the lower-mahirap of the SWS surveys.

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The paper, “Analysis of the near-poor challenge and strategy development ideas,” by Vicente B. Paqueo ([email protected]), Elvira M. Orbeta, Sol Francesca S. Cortes and Ana Christina V. Cruz, was presented at a forum sponsored by the DSWD, the Philippine Statistical Authority and the Asian Development Bank on Oct. 7, 2014, at the Sulô Riviera Hotel, Quezon City.

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