UP stat school: More Pinoys joined ranks of poorest in 2018

MORE Filipinos, especially fisherfolk and farmers, likely joined the ranks of the country’s poorest in 2018, according to a study from the University of the Philippines School of Statistics.

In a presentation late Friday at the Social Weather Stations (SWS) office in Quezon City, UP School of Statistics Dean Dennis Mapa said the increase in food inflation, especially for the poorest 30 percent, reached 7.1 percent last year.

Given that fishermen and farmers are considered among the near-poor since their incomes are the nearest to the poverty threshold, Mapa said they would be the first ones to join the ranks of the poor in 2018.

“2018 is really a bad year because you have high food inflation. Using our historical data from the PSA [Philippine Statistics Authority] official statistics on income poverty, we’ve seen that [it was] only [in] those years wherein food prices are low, leading to low inflation, and you have high income growth, wherein we really experienced reduction in poverty. And utilizing SWS data, we used the spikes in selfrated hunger and also...looked at the self-rated poverty in 2018 .... These are really indicators on what to expect when we hear the report,” Mapa said.

However, Mapa told the BusinessMirror that to determine the exact impact especially where official data is concerned, there is no choice but to wait for the results of the 2018 Family Income and Expenditure Survey (FIES), which will be released this year.

Nonetheless, the impact of high food prices in 2018 will have a negative effect on poverty-reduction efforts. Food inflation felt by the poorest Filipinos reached 7.1 percent in 2018 with the highest observed in September at 9.9 percent.

In the study, Mapa said every 1-percentage-point increase in food inflation causes a 0.68-percentage-point increase in selfrated hunger incidence.

The 2018 SWS data for self-rated hunger incidence increased by 10 percentage points particularly for the second and third quarter information. This was largely because these quarters saw the highest spikes in food prices. “What we are seeing is that food prices have a substantial contribution. With that, there will be an impact on subsistence poverty that will eventually be reported by PSA,” Mapa told the BusinessMirror. Subsistence poverty is measured using a food threshold or the amount needed by families or individuals to meet their basic food requirements.

The increase in food prices increases the poverty threshold. This means those near the poverty threshold in 2015 could fall below the poverty line in 2018.

Based on Mapa’s estimates, the fisherfolk who are considered near-poor earn an average percapita income of P21,845 a month, which is only 0.40 percent higher than the poverty threshold.

In terms of farmers, the nearpoor earn an average per capita of P22,392 a month, higher by 3 percent than the poverty threshold.

Mapa said the government should target these sectors in their assistance. The bulk of the country’s fishermen are in Bicol, Davao, Autonomous Region in Muslim Mindanao (ARMM) and Caraga regions.

Farmers, meanwhile, are found in ARMM, Northern Mindanao, Eastern Visayas, Zamboanga Peninsula and Caraga regions.

“My anticipation is that we will have more poor from the fisherfolk,” Mapa said during his presentation. “[In terms of farmers] assuming that their income did not dramatically increase, with the increase in food prices, most of them will be poor in 2018.”

The near-poor household, as defined by Mapa, is one with a high probability of becoming poor in the future due to shocks. These households are also referred to as transient poor.

Based on 2015 FIES data, Mapa said the near-poor whose incomes are one to 1.1 times the poverty threshold included 4.21 percent of all Filipino households or around 900,000 households. In terms of population, this group accounts for around 5 percent of the population or around 5 million Filipinos.

Inflation cut deeper for the poorest 30 percent of the population in 2018, averaging 7.2 percent, according to the PSA. The highest inflation rate for them was observed in September and October when inflation was at 9.5 percent.

In the National Capital Region or Metro Manila, inflation experienced by the poorest was at 6.6 percent, while in areas outside of NCR, reached 7.2 percent.