Poverty incidence worsened in 2014

The incidence of poverty in the country inched up during the first half of last year mainly due to the after-effects of the onslaught of Supertyphoon “Yolanda” in late 2013 coupled with higher food prices, the government reported Friday.

The Philippine Statistics Authority’s (PSA) latest report based on the Annual Poverty Indicators Survey (Apis) showed that the poverty incidence among individual Filipinos during the first semester of 2014 stood at 25.8 percent, up 1.2 percentage points from the 24.6 percent recorded in the first half of 2013.

As for the subsistence incidence, which the PSA defines as “the proportion of Filipinos whose incomes fall below the food threshold,” it remained at an estimated 10.5 percent in the first half of last year, similar to the level during the previous year. Food threshold, which the PSA uses to measure extreme poverty, is defined as “the minimum income required to meet basic food needs and satisfy the nutritional requirements set by the Food and Nutrition Research Institute to ensure that one remains economically and socially productive.”

Among Filipino families, PSA data showed that the poverty incidence based on the latest Apis rose to 20 percent during the first half of 2014 from 18.8 percent in the same period of 2013. The subsistence incidence among families also inched up to 7.6 percent from 7.5 percent during the same comparative period.

In a statement, Economic Planning Secretary Arsenio M. Balisacan attributed the increase in poverty incidence during the first half of last year to the “rapid” rise in food prices, particularly of rice, as well as the “lingering effects” of Yolanda despite a 6.4-percent year-on-year increase in the per capita income during the same period.

“Per capita income data in 2014 showed that economic growth has benefited the lower income groups, including the poor. This means that the twin strategies of encouraging investments and production alongside the implementation of a large-scale income redistribution program have worked,” said Balisacan, who is also director general of the National Economic and Development Authority (Neda).

But the Neda chief admitted that higher prices, which jacked up inflation near the higher-end of the full-year target during the first semester, “eroded” the per capita income gains.

“The very high prices of food wiped out the gains in per capita income. This situation could have been avoided especially in the case of rice, which is a staple food for low-income and vulnerable families, usually accounting for 20 percent of their budget. Just at the time when the world price of rice was declining, the domestic price of rice was skyrocketing,” Balisacan noted.

According to the PSA, a family of five had to shell out about P6,125 a month during the first half of last year to meet their basic food needs, while a higher P8,778 was needed to also cover non-food necessities.

These amounts reflected year-on-year increases worth 9.5 percent in the food threshold and 9.4 percent in the poverty threshold during the six-month period.