Battle won, war continues against extreme poverty
Credit to Author: The Manila Times| Date: Sat, 14 Dec 2019 17:11:58 +0000
The Philippines won a major battle recently when it was reported that poverty incidence for a full year fell below 20 percent. To be precise, the Philippine Statistics Authority (PSA) reported that the rate for 2018 was 16.6 percent. For many decades, about a third of the Philippine population lived below the poverty line. In 2015, the poverty incidence was 23.3 percent. At 16.6 percent, the PSA also mentioned that 17.6 million Filipinos were living below the poverty threshold of P10,727 monthly income for a family of five.
It would be premature to declare victory though. Mind you, the bar was set low. The threshold translates to about P70 per day for every Filipino. The global standard for defining extreme poverty is living on a daily income of $1 or $2. At the exchange rate, at present, that comes to between P50 and P100 a day. And so, on that point, one can argue that the Philippines still has some way to go.
The war against poverty should continue, even intensify, now that our collective efforts have made a noticeable dent. To push our advantages, our policymakers and economic managers should adopt more metrics to measure various degrees of poverty. We understand that the setting of the poverty level has political implications. Still, we can maintain an official threshold, and, at the same time, start measuring the incidence of extreme poverty and relative poverty — relative to, for instance, the Association of Southeast Asian Nations. Alternatively, we can benchmark against other countries that have roughly the same size as us in economic terms.
In fairness to the government, it does measure subsistence poverty incidence. That figure represents the proportion of Filipinos who cannot meet their basic food needs. The other good news is that this number also fell from 9.1 percent in 2015 to 5.2 percent in 2018. Still, we should review how we measure poverty and look for more ways to improve the people’s overall welfare.
Quality of growth
Metrics are important and not just for monitoring purposes or for scoring political points.
People respect what you inspect, so says Louis Gerstner, who wrote a book about how he turned around the multinational behemoth IBM in the 1990s when it was in decline because of competition from personal computer manufacturers. Instead of falling, IBM prevailed over its competitors. It has even evolved and has expanded.
Following Gerstner’s example, we should improve our monitoring of poverty, if only to signal to the entire government machinery that improving people’s welfare is Job No. 1. We should link other metrics to the war on poverty. For instance, the authorities should have more frequent reporting on the income gap level.
There is perhaps too much attention on economic growth as measured by the gross domestic product, which is reported quarterly and annually. In contrast, the Gini coefficient, a measure of income disparity, is not even reported annually — neither is poverty incidence. Our appreciation for economic growth is dampened when people sense that the rich become richer and the poor poorer.
To meaningfully help the poor, we need to empower them to help themselves. Education can do that. But the metrics on education suggest that the Philippines is lagging.
Regretfully, Congress seems more inclined to cut the allocations for the Department of Education and the Commission on Higher Education. That would be a move in the wrong direction, taken at a time when poverty is already in retreat.
If we fail to make the right investments and corollary moves now, poverty can reclaim its losses. And if we are to make further progress, we need a deep understanding of the problem. That way, policymakers and others in the government can make better use of finite resources and harmonize efforts in combating different levels of poverty.
The recent PSA report on poverty incidence suggests that the enemy is merely bloodied, not vanquished. Poverty is a formidable enemy. Now is the time to press our advantage, and one way is by reviewing our scorecard for success. They can be useful guides for policymaking and governance.