How Do We Measure Poverty?

Source: Dev Pulse, NEDA Development Advocacy Factsheet, Vol.11, No. 19, December 15, 2007

The article is a good read as it describes how poverty is measured. As indicated, while private polling firms use perception surveys, the government, for its part, has the Family Income and Expenditure Survey (FIES). The article gave a rundown on how FIES is done and what the data can do, not to mention its limitations. Let it be known that the 2006 FIES data was acquired from 51,000 households from all over the country, across all income groups. This, in constrast with perception surveys done by private research groups that rely on much smaller statistical samples.

The 2006 FIES released this year showed that:

"The average nominal income of families at the bottom 30 percent grew by 15.9 percent from 2003-2006. In real terms however, income actually declined by 2.7 percent to Php144,000 from Php148,000 recorded in 2003 as a result of faster growth in the number of families. Average family expenditures also weakened by 0.8 percent, putting average real savings to Php21,000 from Php24,000 in 2003."

Another revelation is the shrinking middle class on which Dr. Romulo Virola of the National Statistical Coordination Board challenged the development planners to do something about. "The seemingly systematic shrinking of a group of professionals and skilled workers who can spell the difference between us being mired in poverty or crossing over to the league of first world countries by 2020" should not be ignored.