Fat Free Econ 42: NSCB vs SWS Data on Poverty

* This is my article today in interaksyon.com, TV5's news portal.
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Last week, the country was bombarded with stories that carried descriptions such as “high poverty”, “poverty unchanged”, “more than half of Filipinos poor,” among other variations. Two institutions triggered these stories.

Last Tuesday, the National Statistical Coordination Board (NSCB) released its2012 First Semester Provincial Poverty Statistics, reporting that poverty incidence at 28 percent of the population in the first half of last year was unchanged from the same period in 2006. The subsistence incidence based on a food threshold was 13.4 percent last year, slightly lower than the 14.2 percent in 2006.

The following day, the Social Weather Stations (SWS) released its First Quarter 2013 Social Weather Survey: Families rating themselves as Mahirap or Poor at 52%. The self-rated food poverty based on food threshold budget stood at 39 percent of the population.

 

Notice the big gap in Philippine poverty incidence: 28 percent according to the NSCB, but 52 percent according to the SWS. The subsistence incidence stood at 13.4 percent as per NSCB, but three times as per SWS at 39 percent. What explains the big difference?

First, the NSCB report was based on the Family Income and Expenditure Survey (FIES) of the National Statistics Office, whereas the SWS report was "self-rated." The former used highly quantitative measurements while the latter was based on a subjective assessment by the respondents.

The FIES involved nearly 51,000 respondents nationwide, answering 70 pages of a questionnaire, while the SWS involved 1,200 respondents nationwide, answering a few pages of a questionnaire.

Second, the threshold levels were different. Under the NSCB, food and subsistence threshold was P5,458; non-food needs, P7,821, for a minimum P13,279 per month poverty threshold.

The SWS’ food poverty threshold for Metro Manila was P8,000 per month while overall poverty threshold was P15,000 per month. But notice the arbitrary and inconsistent figures through the years.

In March 2013, the self-rated poverty threshold in Metro Manila was P15,000 per month. It was the same in March 2011, September 2009, June 2008, March 2004 and November 2003. The self-rated threshold was highest at P18,000 in October 2009, and was only P10,000 in December 2011 and September 2010, much lower than the P15,000 in March 2004 and November 2003. Very arbitrary and highly subjective.

For self-rated food poverty in Metro Manila, this stood at P8,000 per month in March 2013, March 2011 and March 2010, but at P8,500 in March 2012 and October 2009. Very arbitrary and highly subjective.

There was a tendency for survey respondents to somehow exaggerate their degrees of poverty and needs for at least two reasons. One is that it could prod the government -- both national and local -- to expand existing subsidies, or invent new aid programs on top of existing ones, if poverty and hunger incidence remained high.

Two, people would not reveal that one reason for their poverty and/or hunger was their high consumption of alcohol and tobacco products, or high spending on lotto, jueteng, cockfighting and other forms of gambling, relative to their household income. There is a tendency to under-report or fail to report this kind of spending in poverty surveys, whether done by the government or private outfits like the SWS.

Mentioning the second reason would be considered as “politically incorrect” because it is tantamount to “blaming the victim.” But those who say this should recognize that the ultimate victim in society would be the taxpayers, especially the fixed-income earners, who are automatically deducted 30 or 32 percent monthly, as government keeps expanding its expenditures.

While we cannot stop the SWS –- or any other private survey firm -- from conducting its subjective and even emotion-based “self-rated poverty” survey, people should be informed or warned of the potential for sensationalism and alarmism. They make good news, good headlines -- imagine the stark contrast between persistent poverty and record economic growth.

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See also:

Fat-Free Econ 38: Jobless Growth vs. Jobless Non-Growth, February 12, 2012

Fat Free Econ 39: P57,000 Public Debt Per Filipino, February 25, 2013 

Fat-Free Econ 40: IMF Irrelevance, March 16, 2013 

Fat-Free Econ 41: Cut Income Taxes, April 08, 2013

Socialized Healthcare 5: Alterrnative Views on Universal Healthcare

Rights should always be coupled with responsibilities. Some people agree by saying that "With greater rights and freedom comes greater responsibilities." That is one way of saying it; another way is "With greater (personal) responsibilities comes greater (personal/individual) freedom." As Friedrich Hayek said, "People who are afraid of responsibilities are afraid of freedom itself."

In many discussions on health policy, what is often asserted and formulated is that "health is a right" and hence, "universal healthcare is a right." I have no problem with this formulation if this should also be added, that "health is a responsibility", and I am referring to individual (and parental/guardian, civil society, community) responsibility, not just government responsibility as is commonly understood. Thus, "health is a right, health is a responsibility" is easily intertwined.

Below are three articles in BusinessWorld by one of my friends in the local health sector, Reiner Gloor, Executive Director of PHAP, on universal healthcare. I agree with many -- but not all -- of his arguments here. I can sympathize with greater government health support and subsidy for the poor suffering from infectious or communicable and tropical diseases. But I have little or no sympathy for government subsidy for lifestyle-related diseases like illnesses due to heavy smoking, heavy drinking, heavy eating of fatty or junk foods, heavy sitting or sedentary lifestyle.

Reiner is speaking from a private sector and civil society point of view, not government's. So these papers have a balanced perspective on the issue of universal healthcare.
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(1) http://www.bworldonline.com/weekender/content.php?id=50666

April 27, 2012

Medicine Cabinet -- Reiner W. Gloor

Universal health care coverage provides safety net for the poor

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For many poor people, health has become a difficult economic choice between getting better or poorer.

Often characterized by high out-of-pocket spending, health financing systems in low- and middle-income countries have contributed to the vicious cycle where diseases worsen poverty, while at the same time, poverty results in rising incidence of diseases.

The World Health Report 2010 estimated that about 150 million people globally suffer financial catastrophe when they avail of health services. Similarly, 100 million people are pushed into poverty due to direct out-of-pocket spending.

In the Asia-Pacific region alone, about 80 million people experience financial catastrophe and 50 million others are impoverished due to health payments.

These happen since in low- and middle-income countries, health is paid for privately or mainly from out-of-pocket health care systems. The same is true for the Philippines that reported a private out-of-pocket share of 54.3% while government funding was 26.2% and social insurance, 8.5%.

This was validated by the Social Weather Stations (SWS) survey of Filipinos on Health Services and Financing which revealed that for those who have consulted a doctor when they were sick, seven out of 10 of them paid from their own pockets.

The video documentary, "The Road to Universal Health Coverage", emphasized that when households spend a substantial part of their income on health, the results can be catastrophic.

In fact, the same SWS survey disclosed that almost three out 10 Filipinos deferred visits to doctors even if they were sick because they felt that they cannot afford to pay for health care. Seven out 10 respondents also believed that many families get impoverished when a member gets sick and has to be hospitalized.

In shielding families from financial catastrophe and other disastrous social outcomes of direct out-of-pocket health payments, the video documentary highlighted the pressing need for countries to adopt and implement financing strategies leading to universal health coverage.