Consistency in poverty trends

Last Wednesday, the Philippine Statistics Authority (PSA) reported that Philippine poverty in the first semester of 2018 (2018S1) had fallen from its last previous measurement in 2015S1 (https://psa.gov.ph/poverty-press-releases/nid/138411). It put the proportion of families below the official poverty line in 2018S1 at 16.1 percent, compared to 22.2 percent in 2015S1.

In the SWS quarterly survey series, on the other hand, Self-Rated Poor (SRP) families were 42 percent in 2018Q1 and 48 percent in 2018Q2, an average of 45 percent for the first semester last year. That was 6 points less than the steady 51 percent in 2015Q1 and 2015Q2, showing agreement that poverty was lower in 2018S1 than in 2015S1, three years earlier.

The consistency is in the trend of poverty, its movement over time, rather than in the scale of poverty, its level at some point in time. The official scale is much lower than the self-rated poverty scale, which is effectively set by the people surveyed, bottom-up, whereas the official, and rather stingy, poverty line is set by the bureaucracy, top-down.

This is now the third validation of the SRP trend. The second trend-validation was described in “Self-Rated Poverty proves its reliability” (Opinion, 3/14/15), which showed that the official poverty report of March 2015, depicting a rise from 2013 to 2014, had been anticipated by the SWS poverty trend.

The first trend-validation was that of the official fall in poverty from 2012S1 to 2013S1, described in “The will to measure poverty” (Opinion, 5/3/14).  For any reference period, the official poverty statistics are always far behind the SRP reports. Indeed, SWS is now preparing its next quarterly poverty report, for 2019Q1, for release to the public soon.

What happened in 2016 and 2017? However, there were more movements in poverty that SWS observed, but PSA could not, for lack of data. Three months ago (in “Two years of rising poverty,” Opinion, 1/19/19), I pointed out that “The good-looking 10-point drop in poverty in 2014-16 was followed by a significant 4-point increase in it in 2016-18.”

That 10-point drop was in two stages: 4 points from the 2014 full-year average of 54 percent to the 2015 full average of 50 percent, plus 6 more points to the 2016 full average of 44 percent. Unfortunately, poverty crept back up to 46 percent in 2017, and then to 48 percent in 2018. Thus, most of the improvement that PSA is now reporting actually happened during 2014-16, and then it got partially dissipated in 2017-18.

The PSA has no data about how poverty moved during 2016 and 2017 since it does its Family Income and Expenditure Surveys (FIES) only once every three years, and had no FIES in-between 2015 and 2018. This is the unavoidable consequence of measuring poverty too intermittently.

From its bottom-up monitoring, done quarterly, SWS has realistic figures on what happened to poverty after 2018S1, the last official measuring point. The proportion of SRP families was 52 percent in 2018Q3 and 50 percent in 2018Q4, or an average of 51 percent in 2018S2 (see “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).

I think there is a strong consensus among economists that the surge in inflation in the cost of living for the poor in the latter half of 2018 was quite painful. Hopefully the PSA official poverty incidence for 2018S2—for release perhaps in October 2019—will bear this out.  But by then, we will already know Self-Rated Poverty for 2019Q2 and 2019Q3.

Meanwhile, the PSA will skip 2019 and 2020 entirely, and have no more poverty data until the 2021 FIES, which it will be ready to report only in 2022.

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