Favorable news about poverty

The new statistics of SWS on poverty show favorable trends in early 2016. In the SWS first-quarter survey, done on March 30-April 2, only 46 percent of household heads nationwide considered themselves poor (mahirap), and only 31 percent considered their food as poor.

The decline in Self-Rated Poverty. The new Self-Rated Poverty (SRP) figure is 4 points below the 50 percent of December last year; 50 percent was also the full-year average for 2015.  The new figure is the second lowest SRP rate in the entire data series, bested only by 43 percent in March 1987 as well as March  2010, and by 45 percent in December 2011.

The 4-point fall in national SRP from December to March was due to drops of 14 points in the Visayas, 7 points in the National Capital Region (NCR), and 2 points in the Balance of Luzon (BoL), combined with a 2-point rise in Mindanao.  The new SRP percentages are 37 in NCR, 55 in BoL, 68 in the Visayas, and 65 in Mindanao.

The first-ever national survey of SRP was done in April 1983, and found 55 percent of households rating themselves as poor.  The second survey, done in July 1985 at the height of hyperinflation, obtained the all-time record high SRP of 74 percent.  The SRP surveys were semiannual in 1986-91, and became quarterly starting 1992.  They now number 114 surveys so far, and constitute the world’s longest and most rapid series of nationwide statistical surveys on poverty.

It can be said that half of all Filipino families considered themselves mahirap in 2015; and in the first quarter of 2016 the proportion has become significantly less than half.  For comparison, the official proportion of poor families in the country was 21.1 percent in the first half of 2015 (the latest available data point), or less than half of the current SRP rate.

The reason that the proportion of poor families according to SRP is so much higher than the official proportion is, of course, this: The official poverty line is much lower than what the people themselves say they need to escape poverty.

In the SWS surveys, the interviewers ask those who say they are poor how much they would need, in order not to feel poor, as a monthly budget solely for home expenses (i.e., excluding transportation and other expenses involved in earning a living).  The answers are called the Self-Rated Poverty Threshold (SRPT).  Each poor family has its own answer; these thresholds naturally vary according to the size of the family and the cost of living in the area.

As of March 2016, the median SRPTs, or the monthly home budgets that would satisfy half of the self-rated poor are P20,000 in the NCR, and an equal P10,000 per month in the Rest of Luzon, Visayas, and Mindanao.  These budgets, stated by poor people themselves, are realistic; they are not extravagant. And don’t forget, half of the poor need more.

For comparison, the official national poverty line for a family of five, in the first half of 2015, is only P9,140. It is defined as the income considered sufficient to purchase minimum food needs, plus a fixed allowance of P31 for nonfoods for every P69 needed for food.

The official line is less than what would satisfy half of the self-rated poor, and thus is rather stingy.  Worse yet, the official poverty line is subject to arbitrary change, as was done in 2011 (see “The lowering of the official poverty line,” Opinion, 2/12/11).

The decline in Self-Rated Food Poverty. The new Self-Rated Food Poverty (SRFP) figure is 2 points below the 33 percent of last December and 4 points below the 35-percent average for 2015 as a whole.  It ties the record-low 31 percent of March 2010 for the entire SRFP survey series. (There were 12 SRFP surveys done in 1988-2000, intermittently.  They became quarterly in 2001, and now number 74 surveys so far.)

On the other hand, the latest official subsistence incidence among Filipino families (usually referred to as the food-poor) is 9.2 percent, as of the first semester of 2015. This is the proportion whose income is not sufficient to meet the official food threshold of P6,365 per month. (Note that this is 69 percent of the official total poverty threshold; the food threshold is estimated first using new food prices, and the total threshold follows without actually investigating new prices of nonfood items.)

The 2-point fall in national SRFP from December to March was mainly due to a large drop of 17 points in the Visayas, from 50 percent in December to 33 percent in March. There was also a 2-point drop in Mindanao, a 1-point rise in NCR, and a 3-point rise in BoL. The other new SRFP rates are 22 percent in NCR, 29 percent in BoL, and 37 percent in Mindanao.

The Self-Rated Food Poverty Threshold (SRFPT) is what the survey respondents say they need for food expenses in order for their food not to be poor.  For March 2016, the SRFPT medians, or what would satisfy the poorer half of the food-poor, are P9,000 in NCR and P5,000 each in BoL, Visayas and Mindanao.  These amounts are not extravagant.

The subjectivity of the SWS poverty measurement system is that of the people surveyed, not that of SWS.  Others using the same approach should get similar findings, just as different, politically-neutral, pollsters should get similar results about voter preferences for electoral candidates.

Although the SWS poverty magnitudes are larger, their trends over time are consistent with—actually, they anticipate—the official poverty trends. The use of subjective measurement is a practical way of learning the dynamics of poverty.

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