Favorable poverty news again

THIS WEEK, Social Weather Stations is reporting Self-Rated Poverty (SRP) among families in the second quarter (2016Q2) at 45 percent, or 1 point better than the 46 percent in 2016Q1.  The two quarters together are the best poverty numbers for two consecutive quarters in the entire SWS quarterly series since 1992.

The SRP average percentage of 45.5 in the first half of 2016 shows clear progress from the past six years’ full averages of 50 in 2015, 54 in 2014, 52 in 2013, also 52 in 2012, 49 in 2011 and 48 in 2010 (see “Favorable news about poverty,” Opinion, 5/28/16).  If it continues the rest of the year, then 2016 will have the lowest poverty ever since the restoration of democracy in 1986.

The 1 point fall in SRP from the first to the second quarter resulted from gains of 5 points in the Visayas and 3 points in the Balance of Luzon (BL), against setbacks of 2 points in the National Capital Region (NCR) and 1 point in Mindanao.  Compared to their 2015 averages, however, poverty fell everywhere—by 14 points in the Visayas, 9 points in Mindanao, 2 points in BL, and 1 point in NCR.

Self-Rated Food Poverty (SRFP) is at its record low. The percentage of families that regard their food as mahirap or poor was 31 percent in June 2016, matching the record low that was first set in March 2010, and equaled in April 2016, one quarter ago.

Food poverty stayed the same in the second quarter since drops of 2 points each in NCR and BL were offset by increases of 4 points in the Visayas and 2 points in Mindanao.  Compared to the full year 2015, however, the June SRFP was lower by 12 points in Mindanao, 7 points in Visayas, 2 points in NCR, and 1 point in BL.  Nationwide, SRFP was 4 points less in June 2016 than in 2015 as a whole.

Subjective indicators are realistic. The subjectivity in measuring poverty—as well as hunger, for that matter—is that of the survey respondents, not the surveyors.  Self-rated variables can be (and have been) objectively validated by independent surveys, just like satisfaction with an official or trust in a personality.

The reason SRP and SRFP numbers are much higher than official ones is: The people’s true minimum needs are higher than what bureaucrats think the people deserve. (See “The lowering of the official poverty line,” Opinion, 2/12/11, and “Poor and near-poor,” Opinion, 10/11/14.)

After asking for a poverty self-rating, SWS asks those who rate themselves as poor how much monthly budget for home needs would be enough not to feel that way.  The answer is a Self-Rated Poverty Threshold (SRPT).  It is for all needs at home, not just food; it excludes transportation and items needed for one’s occupation, education and nonhome activities, which family income must also cover.

The poverty thresholds are bottom-up. SRPTs vary a lot across the respondents, of course.  They refer to the entire family, not a single individual.  (SRP is about poor families, not poor individuals.)  SRPTs rise with family size, but less than proportionally—a family of eight does not need twice as much as a family of four. They rise with the cost of living—higher in urban than rural areas, and highest in NCR.  They are not exorbitant; they are realistic.

In NCR, as of June 2016, P20,000 per month was the median SRPT of the poor.  The median is the middle response, ranking the responses of the poor from highest to lowest.  It is not an average; it is not affected by extremely high or extremely low values.

In the Balance of Luzon, the median SRPT was P15,000 in June 2016.  In Visayas and Mindanao, the medians were P10,000.  Every SWS poverty report has the latest median SRPT and the previous ones in the past 30 years; the changes reflect inflation.

Self-Rated Poverty is much more up to date than official poverty. With the report on its 2016Q2 survey, the SWS indicator of poverty is now four quarters ahead of the poverty report of the Philippine Statistics Authority (PSA), which refers to the first half of 2015 (see “Poverty incidence among Filipinos at 26.3%, as of first semester of 2015—PSA,” released 3/18/16).

Since the PSA’s last report was based on the triennial Family Income and Expenditure Survey, its only points for comparison are the first semesters of 2006, 2009 and 2012.  It does not cite 2013 and 2014, even though Annual Poverty Indicators Surveys were done in those years.

The PSA report says that the decline in official poverty from the first half of 2012 to the first half of 2015 was not significant.  This conclusion was anticipated by SRP, which averaged 53 percent in 2012Q1-Q2, and the statistically similar 51 percent in 2015Q1-Q2 (see also “Self-Rated Poverty proves its reliability,” Opinion, 3/14/15).

As judged by the PSA, a family of five needed P6,365 per month for food in the first semester of 2015.  The PSA derives the total for all needs by a simple 69:31 food:nonfood ratio.  There are no official basic family needs for clothing, shelter, transportation, schooling, etc.  (For NCR, the PSA 2015 line amounted to P10,430 per month for a family; official poverty was 4.5 percent.  Compare it to NCR’s Self-Rated Poverty of 32 percent in 2015Q1-Q2 as well as in 2016Q2.)

Decades of economic growth have not done much for poverty. Solving the problem scientifically calls for econometric modelling to project poverty over time.  Better quality and more plentiful data on poverty and its determinants are needed to construct such models.

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