Poverty as Income Deprivation

Leland Joseph R. de la CruzDirector

Development Studies ProgramSchool of Social Sciences

Ateneo de Manila Universityldelacruz@ateneo.edu

Test your knowledge!1. Name one region where one out

of every two individuals is considered poor.

2. How much should a family of 5 persons be earning per month to be considered non-poor?

3. What percent of the Philippine population is considered poor?

When is a person considered poor? The poor refers to individuals and families whose incomes fall below the official poverty threshold as defined by the government and/or cannot afford to provide in a sustained manner for their minimum basic needs for food, health, education, housing, and other social amenities of life. The poverty line measures the income needed to obtain basic and non-basic needs for one year. (Virola, 2008)

How does the government compute for the poverty line?1. The government constructs a menu per

region that satisfies basic nutritional requirements. The government computes for the cost of that menu. (ex. P27)

2. The government computes for the proportion of income that is budgeted for food using survey data. (ex. 66%)

3. The figure obtained in #1 is divided by the figure obtained in #2. (ex. P27 / 66% = P40)

Food Threshold Also referred to as the subsistence

threshold or the food poverty line Refers to the minimum

income/expenditure required for a family/individual to meet the basic food needs, which satisfies the nutritional requirements for economically necessary and socially desirable physical activities (Virola, 2008)

Poverty Threshold/ Line Refers to the cost of minimum

basic needs: food + non-food Refers to the minimum

income/expenditure required for a family/individual to meet the basic food and non-food requirements

What is the NCR poverty line (2008)?

P328.77Family/ day*

P10,000.00Family/ month

P120,000.00Family/ year*

P65.76Individual/ day*

P2,000.00Individual/ month*

P24,000.00Individual/ year*

*Unofficial, self-computed

What is the Philippine poverty line (2006)?

P206.29Family/ day*

P6,273.99Family/ month*

P75,287.85Family/ year*

P41.26Individual/ day*

P1,254.80Individual/ month*

P15,057.57Individual/ year NSCB

*Unofficial, self-computed

Regional poverty lines 2006,

NSCB

Region Threshold Region Threshold

NCR P20,566 VIII P13,974

I P15,956 IX P13,219

II P13,791 X P14,199

III P17,298 XI P14,942

IV-A P17,761 XII P14,225

IV-B P14,800 CAR P16,810

V P15,015 ARMM P15,533

VI P14,405 CARAGA P15,249

VII P13,390

Poverty incidence 2006, NSCB

32.9% or 27.6 million Filipinos are poor. 32.9% of Filipinos earn less than

P15,057.57 a year, P1,254.80 a month and P41.26 a day.

26.9% or 4.6 million Filipino families are poor. 26.9% of families earn less than

P75,287.85 a year, P6,273.99 a month and P206.29 a day.

Regional poverty incidence (Individual) 2006,

NSCB

RegionPoverty

IncidenceRegion

Poverty Incidence

NCR 10.40% VIII 48.50%

I 32.70% IX 45.30%

II 25.50% X 43.10%

III 20.70% XI 36.60%

IV-A 20.90% XII 40.80%

IV-B 52.70% CAR 34.50%

V 51.10% ARMM 61.80%

VI 38.60% CARAGA 52.60%

VII 35.40%

Regional poverty incidence (Individual) 2006,

NSCB

Region N* % of total Region N* % of total

NCR 0.8M 4% VIII 1.6M 7%

I 1.4M 5% IX 1.2M 5%

II 0.8M 2% X 1.5M 6%

III 1.6M 6% XI 1.2M 5%

IV-A 1.6M 8% XII 1.5M 5%

IV-B 1.0M 5% CAR 0.5M 1%

V 2.5M 9% ARMM 1.6M 6%

VI 2.7M 9% CARAGA 1.0M 4%

VII 2.0M 8%

* Percentages are unofficial, self-computed

Poorest Provinces (2006) NSCB

Poverty Incidence

Tawi-Tawi 78.9%

Zamboanga del Norte 63.0%

Maguindanao 62.0%

Apayao 57.5%

Surigao del Norte 53.2%

Lanao del Sur 52.5%

Northern Samar 52.2%

Masbate 51.0%

Abra 50.1%

Misamis Occidental 48.8%

Least Poor Provinces (2006) NSCB

Poverty Incidence

Batanes 0%

Rizal 6.4%

Bataan 6.8%

Cavite 7.8%

Benguet 8.2%

Pampanga 8.3%

Bulacan 10.0%

Laguna 10.6%

Nueva Vizcaya 12.7%

Quirino 15.9%

Poverty trends NSCB

0

5

10

15

20

25

30

35

Families Individuals

200020032006

Philippine Poverty Incidence: Families (Percentage) NSCB

0

5

10

15

20

25

30

35

40

45

1988 1991 1994 1997 2000 2003

%

Philippine Poverty Incidence: Individuals (Percentage) NSCB

0

10

20

30

40

50

60

1988 1991 1994 1997 2000 2003

%

Income Gap (2006) NSCB

RegionPoverty

IncidenceRegion

Poverty Incidence

NCR 21.6% VIII 30.9%

I 25.2% IX 35.7%

II 23.5% X 33.4%

III 23.4% XI 30.0%

IV-A 24.5% XII 28.1%

IV-B 32.5% CAR 32.1%

V 30.1% ARMM 29.3%

VI 26.6% CARAGA 34.4%

VII 29.5%

Average family income, expenditures and savings per decile 2006, NSO

Avg. Annual Income

Avg. Expenditures

Avg. Savings

Avg. Monthly Income

Phil 173,000 147,000 25,000 14,416

Poorest 10%

32,000 35,000 -3,000 2,666

2nd decile 51,000 52,000 -2,000 4,250

3rd decile 65,000 66,000 Less than 500

5,417

4th decile 81,000 79,000 2,000 6,750

5th decile 100,000 95,000 5,000 8,333

6th decile 124,000 116,000 7,000 10,333

7th decile 156,000 143,000 13,000 13,000

8th decile 205,000 181,000 23,000 17,083

9th decile 292,000 244,000 46,000 24,333

Richest 10%

622,000 460,000 156,000 51,833

Income Distribution 2003, NSO

1.9 3 3.8 4.7 5.87.1 9

11.816.8

36

0

5

10

15

20

25

30

35

40

% o

f In

com

e

1st 3rd 5th 7th 9th

Decile

Income Distribution

0

510

1520

25

3035

40

% o

f In

com

e

1st to 7th 8th 9th 10th

Decile

Income Distribution

0

10

20

30

40

50

60

% o

f In

com

e

1st to 8th 9th to 10th

Decile

Gini Coefficient

Country Gini ratio Country Gini ratio

Denmark 0.247 Hong Kong

0.434

Japan 0.249 Philippines

0.445

Italy 0.360 Mexico 0.461

India 0.368 Guatemala

0.551

U.S.A. 0.408 Namibia 0.743Philippine data: UNDP, 2004 as cited in Wikipedia

Self-Rated Poverty Pulse-Asia

June 2004

October2004

March 2005

Philippines

70% 70% 70%

Class ABC

37% 21% 35%

Class D 68% 68% 69%

Class E 84% 87% 82%

Self-Rated Poverty Pulse-Asia

June 2004

October2004

March 2005

NCR 52% 41% 48%

Luzon 69% 69% 66%

Visayas 71% 82% 80%

Mindanao 80% 79% 81%

Urban 66% 57% 58%

Rural 73% 83% 82%

Self-Rated Poverty SWS

Summary

Official Statistics

Perception-based measure

Poverty Incidence

26.9% 50-70%

Poverty threshold

P6,273 a month

P10,000 a month

Data Sources NSCB: www.nscb.gov.ph: poverty

statistics NSO: www.census.gov.ph: income and

poverty statistics (FIES final report, Table 4A)

Wikipedia: http://en.wikipedia.org/wiki/Gini_coefficient

Pulse-Asia: Public Perceptions on Poverty. CD obtained directly from Pulse-Asia

SWS: www.sws.org.ph/pr050118.htm

Poverty as Income Deprivation

Leland Joseph R. de la CruzDirector

Development Studies ProgramSchool of Social Sciences

Ateneo de Manila Universityldelacruz@ateneo.edu