GOOD PRACTICES OF MEASURING POVERTY RATES

GOOD PRACTICES OF MEASURING POVERTY RATES

Is the Philippines Measuring Poverty Accurately?

Poverty measurement has long been a crucial issue in the Philippines. With millions of Filipinos struggling to meet their daily needs, the question remains: Are we measuring poverty accurately, and are we using the right tools to address it?

The Philippine government, primarily through the Philippine Statistics Authority (PSA), determines poverty rates using various methodologies. Traditionally, the measurement focused on a basic "basket of goods", determining the minimum income needed to afford essential food and non-food items. But with economic changes and the evolving needs of Filipinos, is this method still relevant?

The "Imaginary Basket of Goods": Outdated or Still Effective?

One of the longstanding methods of poverty measurement in the country is the food threshold approach, where the government sets a minimum amount needed for a person to afford a basic set of goods. But critics argue: Who decides what goes into this basket? With the rising importance of internet access and mobile communication, should cell phone loads and Wi-Fi costs be included? In a digital age, access to information and communication is no longer a luxury but a necessity for education and livelihood.

Does the Philippines Use the Multidimensional Poverty Index (MPI)?

Many countries have shifted towards the Multidimensional Poverty Index (MPI), which considers not just income but also health, education, and living standards. This method is widely used in India, Mexico, Sri Lanka, Thailand, and many others. The Philippines has started exploring MPI, but is it fully integrated into national poverty assessments?

More importantly, are local government units (LGUs) required to measure their own local poverty rates? Should mayors and governors be mandated to know and address their own locality’s poverty situation? Perhaps linking poverty reduction to Internal Revenue Allocations (IRAs) could incentivize LGUs to prioritize poverty reduction efforts.

Is There a Link Between Poverty, Inflation, and Wages?

Economic data shows a clear relationship between poverty rates, inflation, and wages. If inflation rises but minimum wages do not, more people fall below the poverty line. Shouldn’t those earning the minimum wage automatically be above the poverty threshold? If not, then either our minimum wage is too low, or our poverty threshold is unrealistically set.

Who Ensures That Poverty Data is Accurate?

The PSA is the official agency monitoring poverty, but is there a third-party organization validating these figures? Can international bodies like the United Nations (UN) or the Asian Development Bank (ADB) question or verify the accuracy of the reported poverty rates? Transparency and accountability in poverty measurement are essential in ensuring that policies are based on real data.

Human Development Index (HDI) and Sustainable Development Goals (SDGs)

Beyond MPI, the HDI—which includes life expectancy, education, and income—is another widely used poverty measurement. The Philippines reports its HDI, but how closely does it align with our poverty statistics? Moreover, how does the country's poverty reduction strategy align with the SDGs?

Can Zero Poverty Be Achieved?

Is it realistic to aim for zero poverty at the local level? Some countries and cities have made significant strides in eradicating extreme poverty through localized approaches, social programs, and economic development strategies. Could Philippine LGUs take inspiration from these best practices?

The Need for a Bottom-Up Approach

Should the Philippines adopt a bottom-to-top approach in poverty measurement—where local data is aggregated into the national level rather than relying solely on centralized estimates? A more localized and community-based method could lead to better-targeted solutions.

Conclusion: Rethinking Poverty Measurement for Better Solutions

Measuring poverty is more than just statistics—it’s about understanding the real struggles of Filipinos and ensuring that policies truly uplift those in need. With inflation, technological advancements, and changing economic conditions, poverty measurement must also evolve. The question remains: Is the Philippines ready to adopt a more comprehensive and reliable way of measuring and addressing poverty?

Ramon Ike V. Seneres, www.facebook.com/ike.seneres
iseneres@yahoo.com, 09088877282, senseneres.blogspot.com

02-28-2025

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