Poverty hardly changed since 2003

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The National Statistics Coordination Board (NSCB) said on Friday that the country’s poverty rate since 2003 has not been improving significantly, as the number of above-poverty line individuals who become poor is almost equal to those moving out of poverty.

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In the agency’s Beyond the Numbers analysis, NSCB Secretary-General Jose Ramon Albert said that overall poverty “did not seem to change” through the years, because the numbers of people getting out of poverty and going into poverty are almost the same.

“Poverty inflows nearly equal outflows for the entire population: Among the estimated 20.5 million poor persons in 2003, 6.5 million moved out of poverty, but 6.8 million moved into poverty in 2006,” Albert said, referring to series of yearly data from the Family Income and Expenditure Survey (FIES).

“The estimated 13.3 million persons that either moved into or out of poverty, which may be viewed as the relatively vulnerable population, are slightly fewer than the estimated 14 million persons that were poor in both 2003 and 2006,” Albert added.

Though the data provided in FIES may not be compared to the Annual Poverty Indicator Survey (APIS), Albert said that the data is still substantial in determining the poor as it indicates their status, per capita incomes as well as family inflows for the year.

“From 2003 to 2008, a quarter of the bottom 20 percent of the total households moved out of poverty,” Albert said, estimating it to be a total of 2.4 million Filipino households.

He explained that among the estimated overall 16.5 million households in 2003, 20 percent are at the bottom of the per capita income distribution.

Three fourths of this bottom 20 percent slightly moved out from being “persistently poor” in 2003 to 2008, while the remaining 25 percent moved out of the poverty line “either permanently or temporarily,” which shows not much movement of Filipinos out of the poverty line.

The FIES data also showed that 23 percent of total households in 2003 to 2008 were “transient” or temporarily poor. Albert said that the transient poor are still more than the persistently poor during those years, which took 15 percent of Filipino households.

“These persons [under transient poor]have incomes that are very volatile, and even if they may be nonpoor today, any shocks from disasters, price movements, income or employment losses can put them into poverty, and this may be the reason why poverty reduction continues to be a challenge,” the NSCB chief said.

“[Also] among the upper 80 percent of the per capita income distribution in 2003, one out of every five non-poor have moved into poverty between 2004 and 2008 either permanently or temporarily,” Albert said, referring to the other 80 percent of the population besides the 20 percent under the poverty line.

‘Rural phenomenon’
He also said that majority or 86 percent of these 2.4 million poor households were living in rural areas, which indicates that poverty is a “rural phenomenon.”

“Even among the 2.8 million nonpoor households in 2003 that fell into poverty or moved in and out of poverty in the period 2004 to 2008, about two-thirds [69 percent] of them live in the rural areas. Consequently, poverty, whether transient or chronic, is more of a rural phenomenon,” Albert said.

“Clearly, interventions for the ‘chronic poor’ [persistently poor]and transient poor [those who are sometimes poor]must be different. The chronic poor may need long-term investments such as the government’s Conditional Cash Transfer [CCT] program to help them exit from poverty, while the transient poor would need safety nets to mitigate the income volatility they face,” he added.

Furthermore, the NSCB secretary-general said that the bigger the size and dependent members of a family, the poorer they get. He said that most households who were persistently poor have more than six members and three dependent members in the family.

“The Reproductive Health Law, which up to now is still being contested in the Supreme Court, should allow poor households to better manage their family sizes. In contrast, the never poor belong to households that have smaller family sizes than the rest of households,” he said.

“Those belonging to families that were nonpoor in 2003, but moved into poverty had about an average family size in 2003 of five, but had one more dependent member by 2008. In contrast, those that were poor in 2003 but moved out of poverty had a family size of five in 2003, but by 2008, had one less dependent,” he added.

In coping with shocks that drag the poor to become persistent poor, Albert said that these people tend to pawn their cell phones and other assets such as television sets and vehicles to get other sources of income.

This would result in lesser money for food and medical matters, as well as having children drop out of school.

“Such coping strategy is clearly going to have its long-term impact on the income prospects of families, and may only further exacerbate their future welfare conditions. Current efforts by government to provide conditional cash transfers to extremely poor families with the condition that they send their children to school may serve well in lessening the opportunity costs of sending children to school,” Albert said.

“The reduction of poverty is never the responsibility of government alone. Some interventions such as the government’s CCT should not be expected to have immediate effects in reduction of overall poverty,” the NSCB chief added.

The estimates used by NSCB were FIES data in years 2003, 2006 and 2008 as well as APIS data in years 2004 and 2007.

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