Old Age Poverty and Active Ageing in ASEAN: Trends and Opportunities

[The World Senior Citizen's Day is celebrated on 21 August each year. The celebration took place for the first time in 1991.]

Poverty in Old Age

The current method of tracking old-age poverty involves disaggregating the current poverty measure according to age. However, poverty in later life is not the same as it is in youth and early adulthood. Older people are less likely to emerge from long-term poverty because of receding capability, deteriorating health, and limited access to financial resources. Thus, research on poverty must analyze old-age poverty within a context-specific framework.

Incidence of Old-Age Poverty in ASEAN

• In general, older persons in the ASEAN Member States have been living marginally above the poverty line and remain vulnerable to falling into poverty.

• In countries with younger populations like the Philippines, the Lao PDR, and Cambodia, older people are less likely to become impoverished than the general population. In countries with a more mature population like Indonesia, Malaysia, and Thailand, the poverty headcount rate of older people is higher than that of the general population or even non-older people.

Poverty Profile of Older Persons in the ASEAN Member States

GENERAL

• In most ASEAN Member States, older women have a higher poverty rate than older men, and they also face more severe conditions. Women’s domestic responsibilities prevent them from having paid full-time jobs. Those who work are still expected to fulfill caregiving duties at home. Many engage in low-wage, unstable, and informal jobs. These leave women with limited social protection and financially dependent on their spouses. Hence, they become more vulnerable to poverty in their later years.
  

• More older people live in rural areas. They also typically reside with their family, particularly their adult children, showing that filial obligation is still observed. However, they usually live with family members who are also impoverished.

• Poverty is the primary factor driving older people in ASEAN to remain in the labor force. Many of them work in agriculture. Older women are typically employed in informal and unstable jobs.

Source: The Asean Magazine

Easing poverty: be first honest with data

Are there fewer Filipinos as government data tend to show?

The question was posed by local think tank Ibon Foundation as President Ferdinand Marcos Jr. stressed what he described as a “significant drop” in poverty rate during his third state of the nation address (Sona) last July 22.

“Halos dalawa’t kalahating milyong Pilipino ang naiangat natin mula sa kahirapan (We were able to lift almost 2.5 million Filipinos out of poverty),” he said, citing data showing that poverty incidence fell to 15.5 percent in 2023 from 18.1 percent in 2021 before he assumed office.

According to initial result of the latest Philippine Statistics Authority’s (PSA) Family Income and Expenditure Survey (FIES), 17.54 million Filipinos were considered poor in 2023, down from 19.99 million in 2021.

As he went on with his Sona, Marcos added that over 1.7 million Filipinos are no longer “food poor,” indicating that they already have income enough to meet their basic food requirements.

But while Marcos’ assertion was based on PSA data, which showed that the proportion of “food poor” Filipinos fell to 4.3 percent from 5.9 percent, Ibon Foundation stressed that the government should take a closer look.

“Most that this (FIES) really says is that the number of Filipinos officially reported as poor has fallen – which is unfortunately not the same as saying that there are now less poor Filipinos,” it said.

Poverty line unrealistic

According to Ibon, “all the PSA data shows is that the income of the very poorest Filipino households increased enough to bump them above the unrealistically low official poverty line.”

It explained that the official poverty threshold, or the income level below which one is considered poor, is set at a national average of P91.22 each person a day, or P13,873 a month for a household with five members.

“This is evidently too low to provide for a person’s basic needs – for food, housing, utilities, transport, communication, education, health, and clothing in the modern era,” said the think tank.

The extreme poverty threshold, set by the World Bank, has already shifted from $1.90 (P108.84) to $2.15 (P123.16) a day in a bid to provide governments with a complete grasp of the problem of poverty.

Pointing to data collected by the Social Weather Stations (SWS) since 1986 and the Bangko Sentral ng Pilipinas (BSP) since 2004, Ibon Foundation stressed that the government’s official standard for poverty is “insufficient.”

The yearly average of SWS’ self-rated poverty shows consistency with 48 percent in 2018, 46 percent in 2021 and 48 percent in 2023, but “looking at both self-rated poor and borderline rates for a broader measure of poverty and risk is even more disturbing.”

Based on SWS data, self-rated poor and borderline poor Filipinos were 76 percent in 2018, 80 percent in 2021 and 79 percent in 2023. Ibon Foundation said that the median self-rated poverty threshold from SWS respondents is P15,000 a month.

Poverty ‘widespread’

As the think tank stressed, the actual experience of most Filipinos will likely affirm that the SWS data, and even the result of the BSP’s Consumer Expectations Survey, “are closer to the truth of Philippine poverty.”

The percentage of Filipino households without savings is said to be “persistently high and has even risen” from a yearly average of 65 percent in 2018 to 72 percent in 2021 and 69 percent in 2023.

With this, Ibon estimated that the number of households without savings grew from 16.1 million in 2018 to 18.4 million in 2023. It made clear, however, that these data do not contradict the official poverty statistics of the PSA.

“They measure different things,” it said, stressing that the PSA’s 2023 FIES results show that the income of 2.5 million among the very poorest increased enough to carry them over the official poverty threshold and to no longer be reported as poor.

The SWS and BSP results, meanwhile, “paint a broader picture of much more widespread poverty according to self-rating and household savings metrics,” said the think tank, which stressed that 18 to 22 million households should be considered poor.

It said that better-looking poverty statistics should not be the goal: “The real goal should be development for the economy and the people, where being lifted above the income-based poverty line is just a natural consequence of such development.”

“There is much to be done to develop the Philippines,” Ibon said.

One of the first steps, it pointed out, is be more honest about the real extent of poverty and underdevelopment. There are no single perfect indicators and many relevant metrics have to be looked at to form as accurate and complete a picture as possible.

“It is also important to ensure that each indicator is as realistic as possible. It goes without saying that claiming great strides in reducing poverty using a low and grossly unambitious standard is counterproductive,” it said.

Source: Inquirer

Filipino households’ average annual income up 15% in 2023

The average annual income of Filipino families increased by 15% in 2023, as wages and quality of jobs improved, the Philippine Statistics Authority (PSA) said.

Preliminary data from the PSA showed that the average annual income of Filipino households rose to P353,230 in 2023 from P307,190 in 2021.

In 2023, the average annual spending of Filipino families went up by 12.8% to P258,050 from P228,800 in 2021.

The increase in income was attributed to the uptick in wages, salaries and entrepreneurial activities for the period, Undersecretary and National Statistician Claire Dennis S. Mapa told a news briefing.

By region, the National Capital Region (NCR) had the highest average annual family income in 2023 at P513,520, up by 22.9% from P417,850 in 2021.

Calabarzon followed in second place with P426,530 in 2023, up by 18.1% from P361,030 in 2021. This was followed by Central Luzon at P375,240 in 2023, 14.2% higher than P328,540 in 2021.

On the other hand, Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) posted the lowest average annual family income at P206,880 in 2023, followed by Zamboanga Peninsula at P257,140 and Negros Island Region at P266,290.

In terms of expenditure, NCR also had the biggest annual average family spending at P385,050 in 2023, followed by Calabarzon at P310,320 and Central Luzon at P298,700.

BARMM also had the smallest average family expenditure at P168,910, followed by Mimaropa Region at P189,770 and Eastern Visayas at P199,910.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan told that the government is looking to improve the quality of jobs to increase Filipinos’ household incomes in the next few years,

“Quality of employment is the foremost priority of this administration because… we have historically low unemployment rate already. You can’t do any better than that now you know because that’s the kind of rate that you see in very mature economies,” he said.

In 2023, the jobless rate fell to a record low 4.3%. The underemployment rate — or the proportion of employed Filipinos looking for more work or longer working hours — declined to 12.3% in 2023 from 14.2% in 2022.

“The three-legged sources of economic growth, such as BPOs (business process outsourcing), OFW remittances, and tourism should be supplemented by growth in the manufacturing sector,” Union Bank of the Philippines, Inc., Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

Mr. Asuncion also said the government must build the necessary digital infrastructure to help bolster growth.

PSA data also showed the Gini coefficient, which measures income inequality, slipped to 0.3909 in 2023 from 0.4063 in 2021, PSA data showed. A Gini coefficient reading of “0” would mean perfect equality, while “1” suggests perfect inequality.

POVERTY

Data from the PSA also showed the poverty rate dropped to 15.5% in 2023 from 18.1% in 2021 amid elevated inflation.

The number of poor Filipinos declined by 12.26% to 17.54 million in 2023 from 19.99 million in 2021.

“It’s good that the income increases faster than the food inflation. But, if food inflation will be lower, of course, the reduction in poverty could be much, much bigger,” Mr. Mapa said.

Inflation averaged 6% for 2023, the highest in 14 years. It also marked the second straight year that inflation breached the BSP’s 2-4% target band.

The PSA said a family with five members needed to have at least P13,873 a month to meet their minimum basic food and nonfood needs in 2023.

Among the regions, nine had poverty thresholds higher than the national average, led by Central Luzon with P16,046, followed by NCR with P15,713, and Calabarzon with P15,457.

On the other hand, the Soccsksargen Region posted the lowest poverty threshold with P12,241.

By region, the NCR recorded the lowest poverty incidence among the population at 1.8%, while the BARMM had the highest rate at 32.4%.

Meanwhile, the national poverty incidence among families with five members improved to 10.9% in 2023 from 13.2% in 2021. This is equivalent to 2.99 million Filipino families that do not have enough income to meet their basic food and nonfood needs.

Among the regions, NCR had the lowest poverty incidence at 1.1%, while the Zamboanga Peninsula had the highest at 24.2%.

The Caraga Administrative Region showed the biggest improvement as its poverty incidence declined by 11 percentage points to 14.9% in 2023 from 25.9% in 2021.

FOOD THRESHOLD

According to the PSA, the food threshold for a family of five rose by 14.7% to P9,581 in 2023 from P8,353 in 2021, mainly due to high food inflation. This would mean the food threshold per person in a day is at P64.

Food threshold refers the minimum income an individual or a family needs to meet their basic food needs, “which satisfies the nutritional requirements for economically necessary and socially desirable physical activities.”

Mr. Mapa said the food threshold is based on a sample food bundle with three meals and snacks.

Based on the national food bundle, breakfast is composed of scrambled egg, coffee and boiled rice or rice-corn mix, while lunch is boiled monggo with malunggay and dried dilis, banana and boiled rice. Dinner is composed of fried fish or boiled pork, vegetables and boiled rice, while snacks include bread and boiled root crops.

“This is really basic,” Mr. Mapa said. “Most probably, a lot of people will not be happy about it. But that’s how the bundle was arrived at. And of course, there’s science to it.”

Mr. Mapa said the PSA is reviewing the methodology used for the food poverty threshold.

“There is a review process that we’re doing and as I said we have already initiated to the technical staff ng PSA to review our methodology, the menu,” Mr. Mapa said in mixed English and Filipino.

Source: Business World