Much lower poverty rate: Possible but difficult

"Here's Secretary Ernesto Pernia speaking."

 

 

When they want to know the level of a country’s economic achievement and the standard of living of its people, economists ask for that country’s poverty rate. A poverty rate, which is the unit of economic measurement employed by the World Bank and other international financial institutions, is the percentage of a country’s population that lives below a certain level of monthly income available to a family of a certain size, which for the Philippines is five persons. Thus, a poverty rate of 20 percent means that 20 percent of a country’s population has a monthly family income of less than a determined amount, which changes over time in response to changes in economic conditions, chiefly salaries/wages and consumer prices.

The government prepares statistics on poverty on a triennial basis. The latest statistics, released in 2019, covers the period 2015-2018. Last week, the Secretary of Socio-Economic Planning, who is currently Director-General of NEDA (National Economic and Development Authority), discussed with the media the 2018 poverty statistics.

The highlights of what Dr. Ernesto M. Pernia told the media were the following facts:

First, this country’s poverty rate fell by almost 7 percentage points over a three-year period—from 23.3 percent in 2015 to 16.6 percent in 2018. In terms of the number of Filipinos involved, this meant a drop, Dr. Pernia said, in the number of poor Filipinos from 23.5 million in 2015 to 17.6 million in 2018.

Second, the NEDA chief said that due largely to two positive factors, the income threshold for a Poor classification rose to P10,727 a month in 2018 from P9,452 in 2015. The positive factors were greater availability of better-paying jobs and grants of cash by the government, he said.

Third, Secretary Pernia said that he “expected” the poverty rate to drop by more than five percentage points more—to 11 percent—by mid-2022, the end of President Rodrigo Duterte’s term.

Fourth, Secretary Pernia said that the poverty rate could even fall to “possibly below 10 percent” by mid-2022.

 Did the NEDA chief offer any caveats for his courageous forecasts? He did. “It would mainly depend on a sustained economic growth rate of 6-7 percent, or better, and intensity in family-planning program implementation, especially among poor households, which are having more children than they want and can provide for,” the NEDA chief said.

Those are tough caveats, considering the recent performance of the Philippine economy and the attitude of Congress—especially the Senate—toward family planning in general and the Reproductive Health Care and Responsible Parenthood Act in particular.

Whether the four-month delay in President Duterte’s approval of the 2019 GAA (General Appropriations Act) deserves much of the blame for the economy’s faltering last year is debatable. What is beyond debate is that the Philippine economy performed less strongly in 2019 than it did in the immediately preceding years. But “7 percent or better” economic growth definitely is unlikely under present circumstances.

As for greater “intensity in family-planning program implementation,” methinks Secretary Pernia should have a little chat with the president of the Senate. Senator Vicente Sotto III goes apoplectic whenever he hears the phrase “family planning.”