Think tank questions government figures on poverty decline

A think tank has questioned the meth­odology of the Philippine Statistics Au­thority (PSA), which reported last week that the country’s poverty rate declined to 21.6 percent in 2015 compared to 25.2 percent in 2012.

Research firm Ibon said the govern­ment’s poverty survey used a “very low poverty threshold of just P60 per person per day.”

Ibon said the amount would only fit the situation of Filipinos in extreme poverty.

“The official methodology grossly underreports real poverty in the coun­try because it uses a conservative food threshold and an outdated and mechan­ical estimation of non-food expenses,” Ibon said.

It also noted that the 21.6-percent poverty incidence for 2015 was far low­er than the 26.3-percent poverty rate for the first semester of 2015, or a change of nearly 5 percentage points, which would be equivalent to about 5 million Filipi­nos who were lifted from poverty in just six months.

“This large difference between ear­lier semestral and full-year results can also be looked into,” the group said.

The government’s poverty inci­dence of 21.6 percent also indicated that the country remained saddled with 22 million poor in 2015, based on the esti­mated 110 million population.

Ibon added that the improvement in the poverty figure was driven by the government’s expensive conditional cash-transfer (CCT) program, which it said did not solve structural poverty from backward economic policies.

Under the CCT, cash support is given to some 4.6 million beneficiary households.

“The Aquino administration’s Pan­tawid Pamilyang Pilipino Program (4Ps) or CCT cost a total of P295 billion over six annual national budgets from 2011 to 2016 including P64.7 billion for 2015.

“This is a large enough amount of cash transfers to reflect in incomes re­ported by poor households in the pov­erty survey,” Ibon said.

The very slight improvement due to CCTs for Filipinos in extreme poverty should not be taken as an indication of Philippine development, Ibon added.

There are other signs of underde­velopment that indicate poverty for tens of millions of poor Filipinos not reflect­ed in the official poverty results, the group said.

Job creation has become much weaker during the supposedly high-growth Aquino administration, it added.

Average annual new job cre­ation during the 2011-2015 period of 692,000 was much less than the average of 858,000 during the 2004-2010 peri­od.

In 2015, more Filipinos found work abroad than in the country, with 4,994 Filipinos deployed daily, compared to just 1,775 new jobs created per day in the country.

The quality of domestic employ­ment was also poor, with almost two out of three employed at 63 percent or a total of 24.4 million Filipinos consisting of non-regular, agency-hired, informal sector, or unpaid family workers, Ibon said. “This means low-paying and inse­cure work with poor or no benefits.”

Ibon also noted that its latest sur­vey in September 2016 had seven out of 10 respondents rating themselves as “poor.”

The PSA said the latest poverty re­port provided estimates using income data from two Family Income and Ex­penditure Surveys (FIES) held in July 2015 and January 2016.

The survey also showed subsis­tence incidence among Filipinos, or the proportion of Filipinos whose incomes fall below the food threshold, was esti­mated at 8.1 percent in 2015.

In 2012, the subsistence incidence among Filipinos was at 10.4 percent. Subsistence incidence among Filipinos is often referred to as the proportion of Filipinos in extreme or subsistence pov­erty.

Food threshold is the minimum in­come required to meet basic food needs and satisfy the nutritional requirements set by the Food and Nutrition Research Institute (FNRI) to ensure that one re­mains economically and socially pro­ductive. It is used to measure extreme or subsistence poverty.

Poverty threshold is a similar con­cept, expanded to include basic non-food needs such as clothing, housing, transportation, health, and education expenses, according to PSA.

“In 2015, a family of five needed at least P6,329, on average, every month to meet the family’s basic food needs and at least P9,064, on average, every month to meet both basic food and non-food needs,” according to the PSA.

PSA said the food and poverty thresholds increased by about 15 per­cent from 2012 to 2015.

But the National Economic and Development Authority (Neda) wel­comed the improved poverty figures, at­tributing them to a “combination of low and stable inflation, higher income, and increase in employment rate.”

“We are pleased to note that this is within the target set in the Philippine Development Plan,” Neda Director Reynaldo Cancio said in a briefing.

The Neda official pointed out that the drop in poverty incidence could have been higher were it not for weath­er-related factors that affected agricul­tural production, the income of people from rural areas, and the food prices.

“The regularity of the cash transfer that was sustained for three years for many CCT beneficiaries has accorded them some resiliency to weather certain shocks. The program also induced more economic activity in the poor barangays, given the presence of a cash economy,” Cancio said.