MANILA – An economist of the World Bank (WB) is urging the Philippine government to update its poverty threshold in order to present a more realistic view of the country’s poverty situation.
The Philippines must consider setting a multidimensional poverty measure that will 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, according to Andrew Mason, WB Acting chief economist for the East Asia and Pacific region.
“The Philippines has been using a national poverty line. It is a monetary-based measure. It is very useful to look at that as a consistent poverty line over time because it gives you an absolute metric on how well-being increases and poverty decreases over time,” Mason said in a press briefing held Wednesday.
“As countries like the Philippines increase their income levels and general levels of well-being, two things can be advantageous: 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 consumes,” he added.
The economist pointed out that the threshold must move from the absolute poverty line to a level, which is closer to a lower middle income or upper middle income economy such as the Philippines.
An updated poverty threshold will enable policymakers in the country to craft effective measures that will improve the condition of poor Filipinos.
In its latest study, the World Bank stated that monitoring poverty at higher poverty lines is increasingly important as countries grow richer.
“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. Participation in society with dignity may require more goods in a richer country than in a poorer country,” WB said in its economic update for the East Asia and Pacific region, which was released this month.
The international financial institution noted that the International Poverty Line (IPL), which is set at USD 1.90 per day in 2011 purchasing power parity (PPP), has gradually become less relevant to the developing East Asia and Pacific region, which is today comprised exclusively of middle-income countries.
The WB reported that families in lower middle income countries must earn at least USD 3.20/day in 2011 PPP while those in upper middle income countries should earn at least USD 5.50/day in 2011 PPP for them to be not considered poor.
“These lines, which are typical of standards among lower-middle-income and upper-middle-income countries respectively, are designed to complement, not replace, the IPL,” according to the WB.
The WB’s Multidimensional Poverty Measure includes the international poverty rate and non-monetary dimensions in education and access to infrastructure.
If a household is deprived in at least one dimension, then the members are considered as multidimensionally poor.
“A broader view of poverty, including higher poverty lines and multidimensional poverty measures, reveals there is still much work to be done in middle-income countries, even though extreme poverty is now less prevalent. This view helps to enhance policy dialogue and craft policies that are more relevant and targeted,” the World Bank report stated.
A recent study by the Philippine Statistics Authority (PSA) showed that the proportion of Filipino families living below the poverty line fell to 16.1 percent in January to June 2018, from 22.2 percent during the same period in 2015.
Among individuals, the poverty incidence fell to 21 percent from 27.6 percent during the same period.
According to the PSA, a family of five needed to spend at least P10,481 a month for food and non-food items to be not considered poor.
Various sectoral groups claimed that the PSA report does not accurately reflect the number of poor Filipinos in the country as it does not calculate a budget for shelter, transportation, utilities, health care, and education. (PNA)
