Alert on poverty and hunger

The worrisome economic news in the September 2017 Social Weather Survey is that poverty and hunger took a backward step again.

The latest SWS poverty rates. In the first five quarters of the Duterte administration, the percentages of families rating themselves as mahirap (poor) have been 42, 44, 50, 44, and 47. After gaining from 50 in March to 44 in June, Self-Rated Poverty rose to 47 in September.  The average for 2017Q1-Q3 is 47 percent, a backward move from the 44 percent average for 2016Q1-Q4.

The setback in poverty was noted (12/3/17) by presidential spokesperson Harry Roque, who said: “We attribute the increase to inflation which registered 3.4 percent in September, according to the Philippine Statistics Authority.”

Indeed, the PSA inflation rate for October is 3.5 percent, bringing the average rate for the first 10 months of 2017 to 3.2.  Considering the favorable 1.4 and 1.8 averages for the full years 2015 and 2016, inflation in 2017 has been hurting the poor.

As I wrote in “Poverty has dropped since 2014” (1/21/17) and “Poverty hits a bump” (5/6/17): “[T]he rate of inflation in the cost of living should be kept below 2 percent in order for the favorable trend in poverty to continue.”

In the 20-year PSA series since 1998, the average inflation percentage was 1+ in only two years—i.e., 2015 and 2016; it was 2+ in 2002, 2003 and 2007; 3+ in 2010, 2012, 2013, and 2017 so far; 4+ in 2004, 2009, 2011 and 2014; 5+ in 2001 and 2006; 6+ in 1999, 2000 and 2005; 8+ in 2008; and 9+ in 1998.

In my opinion, the width of the Bangko Sentral ng Pilipinas’ target band of 2 to 4 percent is rather large, and lacking in compassion for the poor. Since it’s only a target, anyway, what would be the harm in lowering the upper end to 3 percent?

I think the main reason poverty in the Philippines has been so stubborn is this: Inflation in the cost of living has been in the 1+ and 2+ range in only 5 of the last 20 years.

The latest SWS Hunger rates. This week, a new SWS report states that the percentage of families experiencing recent Hunger rose back to 11.8 in September, after falling from 11.9 in March to 9.5 in June.  Fortunately, however, the average for 2017Q1-Q3 is 11.1 percent, a gain from the 13.3 average for 2016Q1-Q4.  These figures will be in the SWS page by the time this column appears.

The SWS poverty rates are proportions of families, not individuals.  The SWS survey respondents are household heads, reporting about their families, not about themselves personally.  It is more natural to count the poor in terms of families, since the family, rather than the individual, is the basic spending unit.

The latest PSA poverty incidence for families is 16.5 percent, obtained by applying the official poverty line to the 2015 Family Income and Expenditures Survey (FIES).  The PSA report (10/27/16) pointed out that poverty among families had dropped from 19.7 percent in the 2012 FIES, and had been 20.5 in 2009, and 21.0 in 2006.  When the snapshots are few, poverty seems to be falling smoothly.

In terms of size, it is natural for official poverty, based on an official line, to be much less than Self-Rated Poverty, based on the people’s own criteria.  In terms of time-trend, on the other hand, official poverty and Self-Rated Poverty move in parallel (“The poverty drop was anticipated,” Opinion, 11/5/16).

The latest PSA poverty figure is now two years old.  Being triennial, the FIES is next set for 2018 and 2021, for reporting in October 2019 and October 2022.  Antipoverty programs that only use official statistics are virtually flying blind.

Contact [email protected].