Fewer Poor Filipinos? A New Trick Did It

Changing the average family size to 5 members may have reduced the number of poor Filipinos, but it still does not change the true extent of poverty in the country
 
By Joseph Yu
IBON Features, Vol. XI, No. 14
Posted by Bulatlat
 
IBON Features--If recently released official poverty figures are to be believed, then the government is well on its way to solving the poverty problem.
 
According to the National Statistical Coordination Board (NSCB), more than 23.5 million Filipinos were living below the poverty line in 2003-- a decrease of 8% or almost 2 million Filipinos from year 2000 figures of 25.4 million poor Filipinos.
 
The number of poor families, however, did not change significantly: from 4.1 million poor families in 2000 to 4 million in 2003. But this could be due to the new average family size used by the NSCB in its computations: five members from the previous six.
 
Changing methodologies
 
The NSCB estimated the magnitude of poverty in the country using an annual per capita poverty threshold figure of P12,267 ($226.45, based on an exchange rate of P54.17 per US dollar) in 2003. According to these figures, an individual needs only P33.61 ($0.62) a day to meet his or her minimum basic food and non-food needs. For a family of five members, government economic planners believe a monthly income of at least P5,111 ($94.35) is enough to sustain their minimum food and non-food basic needs. Of this amount, P3,211.25 ($59.28) would be enough to meet said family’s monthly food needs.
 
But even a non-economist understands that these amounts will meet only a fraction of a family’s basic needs. According to IBON estimates, as of December 2004, a family of six members needs at least P492.19 ($9.09) a day to meet its basic food and non-food needs, or a minimum monthly income of P14,765.70 ($272.58). In fact, the daily poverty threshold for 2003 of P201.65 ($3.72) is less than half the estimated average daily cost of living for 2003 of P450.14 ($8.31).
 
Thus, government’s poverty threshold figures only obscure the true extent of poverty in the Philippines. Comparing IBON’s cost of living estimates to the preliminary results of the 2003 Family Income and Expenditures Survey (FIES) shows that almost 90 percent of Filipino families are poor.
 
To further hide the real poverty picture, government also changed its poverty measurement methodology. Under the old methodology using an annual per capita poverty threshold of P11,605 ($214.23), there were 26.5 million poor Filipinos in 2000. But a new methodology reduced this figure to P11,451 ($211.39), which allowed government statisticians to report that there were actually 1.1 million fewer poor Filipinos than was originally reported using the old figure.
 
But even the P11,605 ($214.23) figure was substantially reduced from the preliminary poverty threshold figure released by the NSCB in 2002 of P13,916 ($256.89). Using that methodology, there were 5.2 million poor families or 31.3 million poor Filipinos.
 
Demand for wage hike
 
The poverty threshold figures, low as they are, point out the urgency of a wage hike for workers. NSCB figures show that annual per capita poverty threshold in the NCR (which has the highest threshold figure among the regions) is P16,796 ($310.06), which translates to a monthly income of P6,998 ($129.18) for a family of five. This means that a worker must earn a daily wage of P269 or $4.97 (for an average 26 days of work a month) in order to meet his or her family’s minimum daily food and non-food needs.
 
This is just P31 more than the daily minimum wage of P300 or $5.54 (the P250 or $4.62 legislated wage plus P50 or $0.92 emergency cost of living allowance). Not all workers receive the cost of living allowance, hence they still earn the legislated daily minimum wage of P250 ($4.62).
 
The daily poverty threshold of P280 ($5.17) for a family of six (computed based on an average 30 days) is also just 46 percent of the estimated daily cost of living in the NCR of P602.31 ($11.12) as of December 2004.
 
Addressing poverty
 
The Arroyo administration has vowed to wage war against poverty. However, it seems that government is bent on reducing poverty, not through addressing the structural weaknesses of the economy, but through the adoption of new poverty methodologies.
 
Although this may be sufficient for government’s economic planners, the ordinary Filipino knows that it takes more than a change of methodology to reduce poverty and improve the lives of the people.
 
Poverty can genuinely be addressed only through the implementation of a national industrialization strategy that would develop the country’s industries and create quality livelihoods for the majority of Filipinos, rather than through the economic globalization strategies that past administrations have been pursuing.
 
If government would continue on its current policy course, then we can only expect the poverty problem to worsen in the years ahead. And eventually, even changing methodologies would no longer be enough to conceal the true extent of poverty in the country. IBON Features / Posted by Bulatlat
 
IBON Features is a media service of IBON Foundation, an independent economic policy and research institution. When reprinting this feature, please credit IBON Features and give the byline when applicable.

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