PDI 09-44 Nov 7 Poverty's the Same After 26 Years

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Poverty’s the same after 26 years of 3

M. Mangahas, Social Climate , PDI 09-44 Nov 7 Povert y’s the same after 26 years

Column for Philippine Daily InquirerPDI 09-44, 11-05-09 [for publication on 11-07-2009]

Poverty’s the same after 26 years

Mahar Mangahas

The SWS September 2009 survey finding that 53 percent of Filipinohouseholds call themselves mahirap (poor), released this week, indicatesthat there has been practically no progress in the fight against poverty in thelast 26 years.

The new poverty reading is from the 87 th in a series of national surveys thatstarted in April 1983, when the self-rating method was first applied

nationwide, by the Development Academy of the Philippines. The originalsurvey found 55 percent of household heads calling their families poor. Thestarting point of 55 and the latest point 53 are statistically the same.

Poverty history is revealed by rapid poverty monitoring. Although it isback where it started, poverty did not stand still in the intervening 26 years.The very next survey, done in hyperinflation year 1985, found self-ratedpoverty at 74 percent, its all-time record-high.

Thereafter, the following poverty episodes, all statistically significant, arevisible in the SWS surveys (quarterly since 1992): the trend in thepercentage of Self-Rated Poor (SRP) was downward from 1985 to only 43percent in early 1987; upward till early 1994, reaching 70 percent;downward till early 1998, going to 57 percent; flat till mid-2001; downwardtill mid-2004, to 46 percent; upward till mid-2006, at 59 percent; anddownward till the end of 2007, to 46 percent again. It spiked up in 2008, to59 percent again; and, most recently, settled down to 53 percent inSeptember 2009.

Thus, the SRP has fallen to the 40s at best; unfortunately it has only stayedthere briefly, so far. Most often, the percentage is in the 50s, as it is now,which means merely returning to its beginning in 1983. Poverty is ratherbad when the SRP reaches the 60s, which last happened in late 2003, and isterrible when the SRP hits 70 percent or more, which last happened in 1994.





It is only because of the rapid and frequent measurement of poverty that weknow of these historical fluctuations. The tracking of general poverty, food

poverty, the people’s poverty thresholds, and hunger by the self -ratingapproach is inexpensive since it requires addressing only a handful of

survey questions to the household head. Such research is at the vanguard of the gradually growing acceptance, in global professional circles, of indicators of subjective well-being as a valid means of tracking meaningfulsocial progress.

The fluctuations in Philippine poverty cannot be explained by the rate of economic growth per capita, since the latter has almost always beenpositive, and rather smooth. The more likely culprit is inflation. Theperiodic spikes of inflation immediately cause immense suffering to thepoor, from which it takes a great effort for them to recover.

What the Filipino poor really need is not more economic growth (whichactually hasn’t been of much benefit to them), but consumer price stabilityand upward flexibility of wages. Economic growth can hardly trickle downto the poor when the purchasing power of wages is going down.

Official poverty statistics are scant and hence misleading. On the otherhand, the dynamics of poverty cannot be seen by those who rely only on thescanty official poverty statistics. These are derived by the National

Statistical Coordination Board (NSCB), by applying its official poverty lineto the Family Income and Expenditure Surveys (FIES). The super-expensive FIES, with a very long questionnaire because it asks for manyfinancial details, and a huge sample size because it aims to produce statisticsfor every province, is done only once every three years.

So far, the FIES has been conducted only eight times, namely in 1985, 1988,1991, 1994, 1997, 2000, 2003 and 2006. The NSCB computations of thepercentage of households below its poverty line showed steady declines

over the first seven FIES rounds, and gave the misleading impression, up to2003, that the country’s steady economic growth was smo othly solving theproblem of poverty.

However, in early 2008, the NSCB reported that poverty had increasedbetween 2003 and 2006. It was the single official admission that povertyever got worse; congratulations to the NSCB for sticking to its numbers.





(Lately, however, official descriptions of poverty have been omitting the2003 figure, and instead have been comparing the 2006 end-point favorablywith some earlier starting point like 1991; this is sheer intellectualdishonesty.)

The finding of worsening poverty over the last two FIES rounds wasrevealed only in early 2008. Thus, for the next official FIES of 2009, theofficial reading of poverty might be revealed only in early 2011, i.e., notuntil the next administration is in place. Does it look like solving thepoverty problem has high government priority?

SWS will report the effect of the recent floods soon. The Third QuarterSWS survey was done over last September 18-21, or about a week beforetyphoon Ondoy seriously flooded Metro Manila and many areas in Luzon,and therefore did not reflect the suffering it caused.

Fairly soon, however, SWS will be able to report to the public about theeffects of Ondoy and subsequent storms on poverty and hunger, since it hasused the self-rating questionnaire items in a special non-political surveyfielded some days ago, and still being processed. This is separate from theregular SWS Fourth Quarter survey, to be fielded in December and reportedto the public early next year.

Contact SWS: www.sws.org.ph or [email protected] .

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http://www.sws.org.ph/



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PDI 09-44 Nov 7 Poverty's the Same After 26 Years

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