Poverty, not mere numbers

At less than P500 a day, a family with five members can be considered out of the poverty threshold, according to the Philippine Statistics Authority (PSA), which was a recent finding that created a huge uproar, particularly among the poor who felt insulted by the figure.

The unrealistic estimate was behind other PSA data which revealed that the national poverty rate declined to 15.5 percent in 2023 from 18.1 percent in 2021.

Based on the PSA estimate, a family with five members needed at least P13,873 per month, or P447 per day, to meet their minimum basic needs, including food, in 2023.

Even outside Metro Manila, spending P500, or P100 for each member of the family, for a day will mean missing some of the necessities, which are not compatible with the PSA estimate.

The explanation of the government for the figure added insult to injury, as the statements issued to justify the number were considered degrading.

Socioeconomic Planning Secretary and head of the National Economic and Development Authority Arsenio Balisacan reasoned that the numeric value was just a tool to measure the effectiveness of the government’s policies and programs in addressing poverty.

He tried to explain that the food threshold represented the cost of a bundle that meets the energy and micronutrient requirements of the average Filipino.

Thus, Balisacan said, the released figures were not and were never intended to be prescribed budgets for a decent standard of living.

Instead, these thresholds, along with other socioeconomic indicators, Balisacan said, are “metrics that we use to determine the inclusiveness of the country’s economic growth and if our policies have improved the well-being of the poor.”

The explanation only strengthened the belief that the government, including the numbers crunchers at NEDA and the PSA, have a disconnect with social realities.

The supposed figure showing a remarkable fall in the poverty level does not reflect the true conditions of the majority of the population, many of whom had emerged from poverty based on the PSA numbers.

Since the numbers are not representative of reality, the method must be reviewed.

The World Bank has long recommended a review of the formula that the government uses to determine the poverty level since the multilateral agency said it presents an unrealistic view.

Andrew Mason, Deputy Chief Economist for the East Asia and Pacific Region of the World Bank, said the poverty measure should not only take into account the shortfall in income and consumption but also low educational achievement, poor health and nutritional outcomes, and lack of access to basic services.

“As countries like the Philippines increase their income levels and general levels of well-being, it should reconsider from time to time whether the poverty line is appropriate and, if not, consider updating the line based on the basket of goods that the poor consume,” the regional economist indicated.

For instance, he recommended that the threshold must move from the absolute poverty line to a level closer to a lower middle-income or upper-middle-income economy such as the Philippines.

For Mason, a poverty line that is too low can lead to an inaccurate assessment of an individual’s ability to function in society in a socially acceptable manner.

The economic managers must realize that numbers, particularly for measuring, must not only be part of statistics but a reflection of the dire conditions of families.

As the economic situation improves, prices increase and the amount that used to be sufficient becomes subsistent.

The numbers and those analyzing them must be grounded in reality.