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Gov’t finds fewer Filipinos poor

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poverty
REUTERS

By Marissa Mae M. Ramos
Researcher

FEWER FILIPINOS were mired in poverty in the first half of 2018, the Philippine Statistics Authority (PSA) reported on Wednesday.

Results of the First Semester 2018 Official Poverty Statistics by the PSA placed poverty incidence among individuals — the proportion of Filipinos whose incomes fell below the per capita poverty threshold — at 21%, compared to 27.6% recorded in the first half of 2015.

The report marked the first set of official poverty statistics from the Family Income and Expenditure Survey (FIES) 2018 which, according to the PSA, started to use a sample size of around 180,000 households “deemed sufficient to provide estimates at the provincial level and highly urbanized cities cognizant of the need for more disaggregated data.”

The latest poverty data translates to a reduction of more than five million poor individuals to 23.1 million in 2018 compared to 28.8 million in 2015, the PSA said in a press conference.

Snapshots of Philippine poverty statistics: first semester, 2015 vs 2018




“Over the course of three years, we can see that poverty [among population] decreased substantially — down by 6.6 percentage points — thanks to sustained economic growth and critical and broad-based reforms and investments that have translated to employment generation and social protection,” read the statement of the National Economic and Development Authority (NEDA), as delivered by officer-in-charge Adoracion M. Navarro.

NEDA attributed the improvement to the government’s implementation of its social programs such as the conditional cash transfer program that now includes an additional P600 rice subsidy cash grant; the P1,000 pension increase from the Social Security System since March 2017; and the rollout of the unconditional cash transfer of P2,400 per household released in early 2018 to cushion vulnerable groups from the transitory effects of the tax reform law.

As a result, NEDA said, the subsidence incidence among Filipinos — or the proportion of those whose incomes fell below the monthly food threshold — also went down to 8.5% in the first semester of 2018 from 13% in 2015’s first half.

Likewise, poverty incidence among Filipino families — or the proportion of those whose incomes fell below the poverty threshold — went down to 16.1% from 22.2%.

The subsistence incidence among families — or the proportion of those in extreme poverty — improved to 6.2% from 9.9%.

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 to ensure that one remains “economically and socially productive.”

Similarly, the poverty threshold is the minimum income needed to meet basic food and non-food needs such as clothing, housing, transportation, health, and education expenses.

The per capita poverty threshold in the first half of 2018 was P12,577 per month as compared to P11,344 per month in the first half of 2015. Meanwhile, the monthly poverty threshold for a family of five members was P10,481 versus the P9,453 in 2015’s first half.

The per capita food threshold was P8,804 per month in first half 2018 as compared to P7,920 in first half 2015. For a family of five, the monthly food threshold in the first half of 2018 was P7,337 versus P6,600 in 2015’s first half.

The results also noted that incomes of poor families, on the average, fell 26.9% short of the poverty threshold in last year’s first half. This means that, on the average, an additional monthly income of P2,819 was needed by a poor family with five members to move out of poverty.

Gross domestic product (GDP), a measure of economic output within the country’s borders, grew by 6.3%, while inflation averaged 4.3% in 2018’s first half.

“While inflation rose to 8.1% in the period of 2015-2018 from 7.8% in 2012-2015, the growth of average income accelerated considerably to 21.2% from 15.3%, respectively,” NEDA said.

NEDA also cited the increase in the growth in per capita income of the bottom 30% of households to 29.2% in 2015-2018 from 20.6% in 2012-2015.

“These indicate that the pace (average of 6.5% GDP growth in 2012-2018), the quality and consistency of economic growth over the past seven years continue to benefit the poor,” according to the socioeconomic planning agency.

“In particular, the growing contribution of industry, particularly construction and manufacturing, to output and employment, are creating more income-earning opportunities that are accessible to the poor.”

Economists shared NEDA’s assessment.

“[The reduction was] basically rooted in the continuing economic growth expansion that the country has been experiencing. More and more economic growth is investment-led in the last two years, where the productive capacity of the economy is rising,” said Union Bank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion in an e-mail.

Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC) said in a separate e-mail that the stable GDP growth in the past years was “consistent with the significant reduction/improvement in poverty incidence.”

TARGET REACHABLE?
“While these initial results are encouraging, we have yet to wait for full-year results of the FIES, as targets in the Philippine Development Plan (PDP) 2017-2022 are based on full-year estimates,” NEDA said.

The current administration targeted to reduce poverty incidence to 17.3-19.3% in 2018 from 21.6% in 2015. The rate is targeted to go down further to 14% when President Rodrigo R. Duterte ends his six-year term in 2022.

For UnionBank’s Mr. Asuncion, the overall increase in prices of basic goods may be a possible drag in hitting this target.

“The country is poised to meet its [2022] target barring any hiccups in the economy. A downside hiccup lately has been the very high level of prices in the economy threatening the very heart of growth which is domestic consumption,” Mr. Asuncion said, referring to inflation’s acceleration to a nine-year-high 6.7% in September and October last year before posting steady monthly declines since then to a 15-month-low 3.3% in March.

For RCBC’s Mr. Ricafort: “The country could possibly meet the target of reducing poverty incidence to 14% by 2022 with economic growth expected to sustain above six percent in the coming years… fundamentally resulting in greater employment and business opportunities.”