Two years of rising poverty

The good-looking 10-point drop in poverty in 2014-16 was followed by a significant 4-point increase in it in 2016-18. This is the big picture in the new SWS poverty report, “Fourth Quarter 2018 Social Weather Survey: Self-Rated Poverty subsides to 50% after rising by 10 from Q1 to Q3,” www.sws.org.ph, 1/11/19.

The latest 2018Q4 Self-Rated Poverty (SRP) percentage of 50 was based on the SWS Dec. 16-19, 2018 survey. It was slightly improved from the 52 in Q3, but not a recovery to the 48 of Q2, much less the 42 of Q1.

Poverty is dynamic; it does not move smoothly. It can either rise or fall in a matter of months, in line with the sensitivity of the people’s suffering to changes in economic circumstances. During 2018, the main factor affecting it was most likely the rate of inflation in the cost of living.

For the full-year 2018, the SRP average is 48. It is 2 points over the 46 average in 2017, and 4 points over the 44 average in 2016, indicating two successive annual increases in poverty (see “Alert on poverty and hunger,” 12/19/17, and “Poverty bounces back up,” 10/13/18). The overall 2016-18 experience is a partial reversal of two successive drops in poverty from 54 in 2014, to 50 in 2015, and then to 44 in 2016 (see “Poverty has dropped since 2014,” 1/21/17).

The straightforward way to understand the dynamics of poverty is to monitor it frequently, preferably quarterly. The official system of triennial measurement is hopeless. The last official reference point was 2015. With no data for 2016 and 2017, the government has no clue as to what happened to poverty then. For 2018, its next reference point, the official poverty figures will be ready only sometime this year. Then 2019 and 2020 will be blank years again.

Movements in poverty, by area. In the National Capital Region, average SRP fell by a substantial 8 points, from 40 in 2014 to 32 in 2016. It fell a bit more, to 31 in 2017, but then slipped to 32 in 2018. Thus, the NCR maintained its poverty situation.

In Balance Luzon, SRP likewise fell by 8 points, from 48 to 40, in 2014-16. But it returned to 43 in 2017 and 2018, thus losing almost half of its gains.

SRP in Visayas fell by a large 12 points, from 67 to 55, over 2014-2016. But it rose to 58 in 2017 and further to 62 in 2018, thus losing most of its gains. Visayas has both the worst poverty and the biggest reversal in the last two years.

SRP in Mindanao fell by a large 11 points, from 62 to 51, over 2014-16. It rose back to 52 in 2017 and further to 54 in 2018, losing a minor part of its gains.

The needs of the people, by area. In every quarterly Social Weather Survey, the household head is asked how much the family’s monthly home budget should be in order not to be poor.  This is its poverty threshold. It is for home expenses only, and excludes expenses for transportation and all other costs of earning a living. Its median is the threshold of the lower half of the self-rated poor.

For a poor family, its head is further asked how far is its actual monthly home budget from its threshold. This is its poverty gap. Its median is the gap of the lower half of the self-rated poor.

For December 2018, the median poverty thresholds and poverty gaps of Filipino families (in pesos per month) are:

Area                                        Poverty threshold                 Poverty gap

NCR                                         15,000                                    6,000

Balance Luzon                       14,500                                    5,000

Visayas                                   10,000                                    5,000

Mindanao                               10,000                                    5,000

The thresholds are realistic. The gaps are significant. Are there any better data?

Contact mahar.mangahas@sws.org.ph.