Poverty at historic low

Last Thursday, Oct. 13, SWS released the report, “Third Quarter Social Weather Survey: Families rating themselves as Mahirap or Poor fell to new record-low 42%; Families Food-Poor fall to new record-low 30%.”

The 42 percent Self-Rated Poverty (SRP) broke the old record of 43 percent first set in March 1987. The record of 43 happened because the hyperinflations of 1984 and 1985 were followed by zero inflation in the next two years. Unfortunately, SRP reverted to 70 or more in November 1990, July 1991, and February 1992. In the past three decades, SRP has been mostly in the 60s and 50s. (See “Inflation enemy of poverty,” 8/9/14.)

The new record of 42 percent in September 2016 is not a great surprise, since it had been steadily falling since mid-2014. It was 55 in June 2014 and also September 2014, 52 in December 2014, 51 in March and also June 2015, 50 in September and also December 2015, 46 in April 2016, and 45 in June 2016.

The successive drops by one or two points per quarter eventually resulted in significant change. The new record of 42 is 13 points below the old 55 of June 2014. (See “Favorable news about poverty,” 5/28/16, and “Favorable poverty news again,” 8/6/16.)

Self-Rated Food Poverty (SRFP, which is the same concept as SRP but applied to Food) has also been falling for some time—it was 37 in June 2015, 35 in September 2015, 33 in December 2015, 31 in April and also June 2016 (a new record low at that time), and finally 30 in September 2016.

For the improvements in SRP and SRFP, I give credit to consumer price stability. Since 2015, the cost of living has been rising by only about 1.5 percent annually. Price stability is necessary in order for economic growth to trickle down. It is too easy for an inflationary spike to wipe out any gains in money incomes of the poor.

The SWS SRP figures represent the world’s fastest and longest time series of nationwide statistical surveys of poverty.  It is the world’s fastest series, because it is done quarterly, synchronized with the official figures of the Gross National Product. It thus enables simultaneous tracking of economic deprivation and economic growth. Does anyone know of any other country that surveys poverty quarterly? If so, please let me know.

The SRP is the world’s longest series, because it was semiannual in 1986-91 before becoming a quarterly from 1992 to the present.  The year 2016 is its 25th consecutive year as a quarterly.  Including its pilot surveys in 1983 and 1985, there have been 116 national surveys of SRP in the Philippines, as of September 2016.  Does anyone know of any other country that has surveyed poverty nationwide more than a hundred times in the past three decades? If so, please let me know.

In contrast, there are only eight points in time with official poverty figures estimated on the same basis namely: 1991, 2003, 2006, 2009, 2012, 2013, 2014 and 2015. At least the official numbers were annual starting in 2012.  (See “The will to measure poverty,” 5/3/14.) That’s too little data for an understanding of the dynamics of poverty.

SWS has more plentiful data since it is willing to use the bottom-up approach for measuring poverty.  The number 42 percent is double, yet more realistic, than official poverty of something like 21 percent (in 2015).

The official 21 percent are estimated on the basis of very stingy poverty lines that only react to the price of food. There is no allowance for transportation and other nonfood essentials (see “No shelter in the poverty line,” 1/11/14.)

The SRP has a good record of anticipating the movements in official poverty over time. It recognized “the lost decade” ahead of the official stats (see “Self-rated poverty proves its reliability,” 3/14/15). It gauged the effect of “Yolanda” (see “Poverty, hunger and Yolanda,” 1/25/14), whereas the government income survey omitted Leyte since the official sample of households was washed out.  What worries me is that the drop in poverty in 2014-16 might not be noticed in the official stats until 2018.

Contact mahar.mangahas@sws.org.ph.