Poverty incidence in Philippines eased in 2015, study says

RG Cruz, ABS-CBN News

Posted at Mar 18 2016 08:54 PM | Updated as of Mar 19 2016 09:52 AM

MANILA - Poverty incidence in the Philippines eased in the first half of 2015, according to the Family Income and Expenditure Survey (FIES) conducted by the Philippine Statistics Authority (PSA). 

The country's first-semester poverty incidence among families in 2006 was at 23.4% during the Arroyo Administration. It went down to 22.9% before Arroyo stepped down in 2009. 

President Aquino's final full year in office in 2015 saw the poverty incidence down to 21.1%. 

Lisa Grace Bersales, national statistician of the Philippine Statistics Authority, presented the data.

"Based on the poverty threshold of P9,140/month, 21.1% or about 1 out of 5 families (were) poor in the first semester of 2015. In 2012, poverty incidence was 22.3%, 22.9% in 2009, and 23.4% in 2006. Based on the food threshold of P6,365/month, 9.2% in the first semester of 2015 of Filipino families (did) not have enough income to buy their basic food needs. In 2012, the food threshold was 10.0%, same as in 2009 and 10.8% in 2006," she said. 

Poverty incidence in Philippines eased in 2015, study says 1

"Among the population of the country, poverty incidence registered at 26.3% in the first semester of 2015. This means 26.3% of Filipinos don't have the income needed to meet their basic food and non-food needs. On the other hand, subsistence incidence among population stood at 12.1% in the first semester of 2015, (or) 12.1% of Filipinos don't have the income needed to buy their basic food needs. At the regional level, the first semester per capita poverty food threshold was observed to be highest."

MORE POOR FAMILIES IN METRO MANILA, ARMM

Regionally, poverty incidence from 2006 to 2015 went up in the National Capital Region (NCR), Regions 4A, 8, 12, and the Autonomous Region in Muslim Mindanao (ARMM). It went down in the other regions. 

Among the population, the first-semester poverty incidence stood at 28.8% in 2006 and 26.3% in 2015. It was up in the NCR, Regions 4A, 8, 12 and ARMM. 

"In terms of the percentage increase in poverty thresholds between the first semester of 2012 and 2015, it is observed that the poverty thresholds of Bataan, Cavite and Western Samar increased by more than 30%. For the increase and decrease of provincial poverty incidence among population, between the first semesters of 2012 and 2015, it is observed that Apayao's poverty incidence among population decreased by 20.9%," Bersales said.

"On the other hand, the poverty incidence among population of Sulu increased by more than 20% between the first semester of 2012 and 2015. As we have done in the past, we do not rank the provinces one by one. Instead, we cluster them according to poverty incidence among families. 

"Based on our clustering, Bukidnon, Lanao del Sur, Maguindanao, Northern Samar and Sarangani were classified in the poorest cluster of provinces in the first semester of 2012 and 2015. On the other hand, Cavite, Ilocos Norte, Rizal, the 3rd and 4th districts of NCR are consistently included in the least poor cluster of provinces in the first semester of 2012 and 2015."

Poverty incidence in Philippines eased in 2015, study says 2

On the other hand, subsistence incidence among Filipinos, or the proportion of Filipinos whose incomes fall below the food threshold, was estimated at 12.1% for the first semester of 2015 from 13.4% for the same period in 2012. 

Subsistence incidence among Filipinos is often referred to as the proportion of Filipinos in extreme or subsistence poverty.

Bersales said that for a family of 5 in Metro Manila, this translates to about P10,431 on average needed in a month to meet basic and non-food needs. "On the other hand, Region 4B registered the lowest per capita poverty threshold in the first semester of 2015 with poverty threshold of P8,414/month." 

"It may be noted, in all regions except in ARMM, poverty thresholds increased faster than the regional Consumer Price Index (CPI) for the bottom 30% and all income groups from 2012-2015. 

"In terms of the food threshold, the NCR also had the highest per capita food threshold with P7,284/month for a family of 5 to meet their basic food needs. Similar to the poverty threshold, Region 4B also registered the lowest first semester per capita food thershold in 2015 at P5,876/month between the first semester of 2012 and 2015.

"The poverty incidence among families decreased in 11 out of 17 regions in the country, and between the first semester of 2006 and 2015, there were significant decreases in the national estimates. These are Regions 1, 2 and 4B. On the other hand, between the first semester of 2009 and 2015, we note decreases in Region 2, 4B and CARAGA. 

"In terms of subsistence incidence among families, between the first semester of 2012 and 2015, 11 out of the 17 regions have decreasing subsistence incidences. Over a longer period of comparison, between the first semesters of 2006 and 2015, decreases in the subsistence incidence among families in the national estimates are also noted as well as in Regions 1, 2, 9 and CARAGA. Further, between the first semester of 2009 and 2016, Regions 2, 5, 9 and CARAGA have noted decreases in subsistence incidence among families, and it may be noted however that Region 12 and ARMM have increased their estimates between the same period." 

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. 

Poverty threshold, meanwhile, includes basic non-food needs like clothing, housing, transportation, health, and education expenses.

Poverty incidence among Filipino families, based on the first semester of 2015, was estimated at 21.1% from 22.3% in 2012. The subsistence incidence among Filipino families or the proportion of Filipino families in extreme poverty, was estimated at 9.2% for the first semester of 2015 from 10.0% in 2012.

DECLINE IN INCOME INEQUALITY

National Economic and Development Authority (NEDA) acting Deputy Director General Rosemarie Edillon expects the full-year figure to be lower.

"Our country's official poverty incidence has eased to 26.3% of individuals during the 1st semester of 2015, a record low across all the Family Income and Expenditure Surveys for which we have first semester data. We note that the family income in the second semester of the year is usually higher than the first semester because that's when we receive our bonuses, our Christmas gifts, thus we expect the full-year poverty incidence to be lower than this 26.3%, and in fact it could very well be 23.6 and 23.8% which will be close to the high-end target of the PDP [Philippine Development Plan] for the year. "

Edillon also noted a steady decline in income inequality in the country. "Increases in income are becoming more progressive, as incomes of the bottom 30% of the population have been continuously rising faster than those in the higher income classes. 

"The acceleration in poverty reduction is likely the result of faster increases in real incomes in the last 3 years as incomes rose faster than the rise in prices, whereas the growth of average nominal per capita income accelerated from 12.8% in 2009 to 2012 to 15.3%. In 2012-2015, inflation decelerated from 12.1% to 9.5%. Respectively, the rate of decline between first semester of 2006 and in same period in 2015 could have been faster if not for the major shocks and I mean major, particularly from natural calamities like typhoon Yolanda and the Bohol earthquake and man-made disasters like the Zamboanga seige. Meanwhile, the country's subsistence incidence, which is a measure of extreme poverty, also reflected a sustained downward trend across all the years.

"This means that the proportion of families that do not have enough income to meet basic food requirements has been declining. Subsistence incidence recorded its first single digit occurrence of 9.2% among families. Among individuals, subsistence was recorded at 12.1%. Moreover, we're seeing improvements in income distribution. As we already said, per capita income of the bottom 30% of the household grew much faster. In fact, it was at over 10% during the period 2012-2015, the average income of households which grew by 15.1%"

Edillon attributed it to the government's push for inclusive growth. "These numbers send a strong signal that our efforts in the past years to foster inclusive growth and good governance have translated to actual and tangible improvements in the lives of our people."

CONDITIONAL CASH TRANSFER 

Edillon cited the Conditional Cash Transfer (CCT) program, a project initiated by the Arroyo administration and expanded by the Aquino administration. 

"The well-targeted social protection program such as the 4Ps [Pantawid Pamilyang Pilipino Program] proved vital in helping the poor to get back up after these major shocks. At the same time, we note that the conditions imposed on the 4P beneficiaries will make more for a more robust poverty reduction in the future," she said. 

Edillion, however, admitted that this is not enough. 

"Certainly a lot more needs to be done and we cannot be content with these achievements. Despite these improvements, these improved numbers, the decline in poverty, could have been more...the increase in income was still not enough to offset the increase in food prices, particularly those that are being consumed more by the poor. In particular, the price of rice which declined in 2015 relative to 2014 levels has remained high, actually almost 20% than its price in 2012.

"Moreover, there are still regional disparities in personal income across the country. The NCR consistently posted the lowest poverty incidence due to the vibrant economic activity and growth of employment opportunities in the region, and we see this spilling over to adjacent areas like Central Luzon and CALABARZON [Cavite, Laguna, Batangas, Rizal, Quezon] and for that reason, these regions reported the 2nd and 3rd lowest poverty incidence respectively."

IMPACT OF CALAMITIES 

Mindanao has remained poor. Edillion explained: "On the other hand, poverty incidence was highest in regions in Mindanao particularly the ARMM. This could be linked to the recurrent armed conflicts and peace and security problems in the area combined with island's exposure to natural hazards. 

"It can also be partly explained to the high dependence on agriculture and the underperformance of the agriculture sector as a whole. We should also note more than 70% of workers in the region are employed in the agriculture sector. 

"Meanwhile, regional data showed Region 8 or the Western Visayas posted the second highest poverty incidence signalling that people there might still be reeling from the destructive aftermath of typhoon Yolanda, which struck the region the hardest in late 2013."

A major drag to the country's poverty numbers is the effect of natural calamities. 

Edillon said, "this factor of natural calamities really merits a closer look. We note for instance that across all period, the years 2013 to 2015 witnessed the highest number of typhoons and the highest damage to properties, including infrastructure and agriculture. The country was visited by 94 typhoons during the period 2011-2015, 9.3% higher than the period 2006-2010, resulting in almost triple the cumulative cost of damage amounting to P242.9 million compared with the previous 5 years."

PALACE WELCOMES REPORT

Malacanang welcomed the report. Presidential Spokesperson Edwin Lacierda released a statement and used it to campaign for the continuation of the administration's programs.

"This latest announcement comes on the heels of another positive report from the PSA. Released just last week, the most recent round of the Labor Force Survey indicates that our unemployment rate dropped further from 6.6% to 5.8% between January 2015 and 2016. This is the lowest rate recorded for all such surveys conducted in January over the past ten years. Led by the services and industry sectors, total employment grew by 2.0% year-on-year, reaching 39.2 million with an estimated 752,000 additional workers," he said. 

"Seen within the context of a momentum that began in 2010, these developments stand as further testaments to the positive impact of good governance. Under Daang Matuwid, our people have gone from success to success, continuously reaping gains in various indicators of quality of life. Since 2009, overall poverty in the country has decreased by 2.3%. Hunger incidence has similarly gone down. According to the Social Weather Stations’ (SWS) Fourth Quarter 2015 Survey, the number of Filipino families experiencing hunger has fallen from 15.7% in September 2015 to 11.7%. In real numbers, this equates to an estimated 900,000 families no longer experiencing involuntary hunger. With this figure, the average hunger rate for 2015 stands at 13.4%—4.9 points below the 2014 average of 18.3%, and the lowest annual rate for the series in 11 years.

"Foremost among the government’s social intervention initiatives is the Pantawid Pamilyang Pilipino Program (4Ps). Under the Aquino administration, the program has been expanded significantly, from covering only 786,523 households in July 2010 to a target of 4.6 million households this year. Initial results of a study have yielded positive news: so far, millions of our chronic poor have been able to cross over the poverty threshold through Pantawid Pamilya. By providing access to better health and education, the program holds enormous promise in granting beneficiaries the wherewithal to break the cycle of intergenerational poverty. The challenge now is to further empower our people so that the transient poor—those who have crossed over to non-poor status yet remain vulnerable to economic shocks due to disaster and disease—will not again fall beneath the poverty line.

"The latest poverty figures, while encouraging, present a constant challenge for Daang Matuwid: to further ramp up and scale up efforts toward a future where no one is left behind. Now that we have made significant headway and are on the cusp of even greater progress, we all the more need a steadfast hand to guide us toward this next level of Daang Matuwid. We trust that our voters will choose the best and most capable leaders for this task, and allow even more generations of our countrymen to achieve the Filipino dream."