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  • Writer's pictureZiggurat Realestatecorp

Philippines’ stubborn poverty

The national proportion of families rating themselves as Mahirap (Poor), in the new Social Weather Stations (SWS) quarterly survey of March 26-29, 2023, is 51 percent, the same as in the previous SWS survey of Dec. 10-14, 2022. The Borderline and Not Poor percentages are 30 and 19 respectively, unchanged as well.


The good news is that Self-Rated Poverty stopped rising. Last year the quarterly percentage steadily grew: 43 in Q1, 48 in Q2, 49 in Q3, and 51 in Q4. The 8-point change from Q1 to Q4 is quite significant since the national error margin is only 3 points. The bad news is that it’s far from recovering to its average of 45 in pre-pandemic 2019, much less to its all-time low of 38 in March 2019.


The recent stability in national poverty was due to increases in the National Capital Region (NCR) by 8 points, in Visayas by 7 points, and in Mindanao by 3, offset by a 6-point fall in Balance Luzon. The new poverty percentages in each area are 65 in Visayas, 62 in Mindanao, 43 in Balance Luzon, and 40 in NCR.Over time, Visayas and Mindanao are always the two poorest and only keep changing ranks. Balance Luzon used to be much poorer than NCR; but now its disadvantage is not as much.


Of course, the absolute number of the poor is more now than in December, since the total population is rising by 1.5 percent yearly. Keeping the absolute poor number steady requires the poverty rate to fall by about 1.5 points per year. We have to run, just to stay in the same place.The main problem now is rising Food-Poverty.


The national percentage of families rating their food quality as Mahirap is now 39, significantly above the steady 34 in Q4, Q3, and Q2 last year, not to mention the 31 in Q1. The Food-Borderline rate is now 35; the Not Food-Poor rate is 26. (Note: with respect to the inadequacy of food quantity, see the SWS survey reports on Hunger.)


Not only is present Food-Poverty far above that in pre-pandemic 2019 (average 31), but it has not been this high in any quarter since 2014, nine years ago. The new Food-Poverty percentages are 52 in Mindanao, 45 in Visayas, 31 in Balance Luzon, and 33 in NCR. At present, NCR is not the least Food-Poor of the four areas; this has happened before. Recovery to pre-pandemic times requires reducing the food poverty rates to 40 in Mindanao, 42 in Visayas, 26 in Balance Luzon, and 21 in NCR; those were the 2019 averages.


Where NCR retains its advantage is in having the highest percentage of Not-Food-Poor—43 points, versus 33 in Balance Luzon, 18 in Visayas, and a pitiful 9 in Mindanao. The Food-Borderline is only 24 points in NCR, versus 36 in Balance Luzon, 37 in Visayas, and 40 in Mindanao. These findings imply that NCR has the most inequality in food-consumption quality of the four areas.


The median poverty thresholds and poverty gaps are holding steady, implying that the poor are tightening their belts. These medians are the midpoints of the answers of the poor themselves when asked (1) what they need (the thresholds) and (2) what they lack to reach their thresholds (the gaps) in terms of their monthly home expenses in order not to be poor. These answers are typically in large round numbers.


(We also ask the Borderline and the Not-Poor households what they think a poor household as large as theirs would need in order not to be poor. Interestingly, their answers are not very much higher than the answers of the poor themselves.)

For the generally poor in Metro Manila, the current median poverty threshold is P20,000, and the current median poverty gap is P10,000. The corresponding numbers for the generally poor in Balance Luzon are P15,000 and P6,000; for those in Visayas, P15,000 and P7,000; and for those in Mindanao, P10,000 and P5,000.


For the food-poor in Metro Manila, the current median food-poverty threshold is P10,000, and the current median food-poverty gap is P5,000. The corresponding ones for the food-poor in Balance Luzon are P9,000 and P4,000; for those in Visayas, P8,000 and P3,000; and for those in Mindanao, P6,000 and P3,000. I think these numbers are very realistic and up-to-date.


In the past few years, the medians have been relatively stable. However, the means or simple averages are steadily rising, suggesting to me that the medians will in due time jump up to higher levels or “terraces.” I expect the jumps to be no less than P1,000 at a time. Money has lost so much value that many people don’t bother to count pesos in the hundreds anymore.


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