Self-rated poverty proves its reliability

Last week, while opening a workshop of experts on poverty reduction, Socioeconomic Planning Secretary Arsenio Balisacan revealed that the new official report on poverty was about to be released that day.

The release of a poverty report in early March is much earlier than expected. The last two reports were released on April 29, 2014, and April 23, 2013. The three reports all refer to poverty in the previous year’s first semester (S1) only; the government did not measure poverty in the second semester (S2).

Poverty rose in 2014, after having fallen in 2013. Dr. Balisacan announced the bad news that poverty worsened between 2013S1 and 2014S1. It rose from 18.6 to 20.0 percent among families, and it rose from 24.6 to 25.8 percent among people.

Official poverty is obtained conventionally, by surveying family income and then comparing it to an official (and very stingy) poverty line. The proportion of the poor is always lower among families than among people, since the poor have larger families than the nonpoor.

The rise of poverty last year reminds us yet again that growth in the Gross National Product, of itself, does NOT improve the lot of the poor. The so-called “growth elasticity of poverty”—see “Naive projection of poverty (Opinion, 1/24/2015)—that the World Bank read into the 2013 fall of poverty failed to operate in 2014.

Yes, there was growth in 2014S1 in the money incomes of the lower classes, said Dr. Balisacan, but it was overpowered by the inflation of prices of things the poor need. The inflation facing the poor is stronger than average inflation. In particular, the price of rice is needlessly high, because of the import monopoly of the National Food Authority. This monopoly should be abolished.

The official poverty report validates the trend in Self-Rated Poverty (SRP). The concept of Self-Rated Poverty used by Social Weather Stations is specifically about family poverty. The new official report validates the trend in SRP. I wrote (Opinion, 1/24/2015): “In 2013, the SRP quarterly percentages of families in poverty were 52, 49, 50 and 55, with an average of 50.5 for the first semester and 52 for the year. In 2014, the quarterly SRP rates were 53, 55, 55, and 52, with averages of 54 for the first semester and also for the year. Thus, according to the SRP instrument, poverty rose from 2013S1 to 2014S1 by over 3 points. Let us wait and see what the official figures show about poverty incidence at those two points.” The wait is now over; the official trend is the same as the SRP trend.

This is the second consecutive validation of the SRP trend. After the 4/29/2014 official report of a fall in poverty, I wrote (Opinion, 5/3/2014): “[T]he 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) had 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.”

But there is still no accounting for “Yolanda.” The sad thing about the new poverty report is that it excludes Leyte, the province hardest hit by the supertyphoon in November 2013. It has this endnote: “The 2013 first semester poverty estimates were revised from those released on 29 April 2014 for consistency with the 2014 first semester poverty estimates from the 2014 Annual Poverty Indicator Survey (APIS) which does not include sample households from Batanes and Leyte.”

In other words, the new official poverty rates are understatements.

Thus the 3/6/2015 report has a family poverty rate for 2013S1 of 18.8 percent, without Leyte/Batanes, versus the 5/29/2014 report’s 19.1 percent for the same period, with Leyte/Batanes. The geographical adjustment was needed in order to compare the two years on the same (limited) area.

Last Wednesday, I learned from Dr. Rosemarie Edillon, Neda deputy director general for policy and planning, that the government has been unable to do surveys in Leyte ever since Yolanda struck. This is because the mass movements of the residents caused havoc to its preset “master sample” of names and addresses, by which the field interviewers locate their respondents.

(Yet straightforward sampling in the field by the random walk approach, without need for a prelisted sampling base, has stayed feasible in Leyte. This very practical procedure is widely practiced by the private survey industry, including SWS. The exclusion of the very tiny province of Batanes in the 2014 survey was due to different technical problems.)

Dr. Edillon confirmed to me that not only family income, and its derivative official poverty, but all statistics based on the quarterly Labor Force Surveys in 2014 fail to account for the conditions in Leyte. The government’s sampling system needs to recover by mid-2015, so as to make a full poverty report in early 2016.

Up to now, only the SWS statistics have been able to quantify the impact of Yolanda on poverty: “Super-typhoon Yolanda was so devastating that it raised Self-rated Poverty by 3 points, Self-rated Food Poverty also by 3 points, and Hunger by almost 1 point, according to the Social Weather Survey of Dec. 11-16, 2013.” (“Poverty, hunger and Yolanda,” Opinion, 1/25/2014)

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Materials of the March 6, 2015, workshop on poverty reduction are at https://policy.aim.edu/poverty-reduction/overview.

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Contact mahar.mangahas@sws.org.ph