The government’s distribution of the Social Amelioration Program (SAP) will not prevent millions of Filipinos from joining the ranks of the poor due to the lockdowns imposed by the government to prevent the spread of Covid-19, according to the state think tank.
In a study titled Mitigating the Impact of Covid-19 Pandemic on Poverty, a team of researchers led by Philippine Institute for Development Studies (PIDS) President Celia M. Reyes estimated that around 2.816 million Filipinos, or 400,400 households, will still become poor despite SAP.
However, without the SAP, Reyes and her co-authors estimate that as much as 7.535 million or 1.443 million households will become poor because of the efforts of the government to impose quarantines.
“The poverty simulation results show that if the government did not implement an emergency subsidy program, an additional 1.44 million families, or 7.53 million individuals, will become poor as a result of the pandemic,” the authors said.
“Implementation of the SAP reduces the number of Filipinos who will become poor to about 410,000 families, or 2.82 million individuals. Given the projected economic performance for 2020, poverty is projected to still increase despite the implementation of the SAP,” they added.
The PIDS estimates also showed that without the SAP, the country’s poverty incidence per population will reach 23.8 percent, while the estimate with SAP showed that the poverty incidence will reach 19.4 percent.
These would translate to 25.205 million poor Filipinos in a scenario without SAP, and 20.486 million with SAP.
These are still higher than the 16.7 percent estimated prior to Covid-19. Based on 2018 official statistics, there were 17.670 million poor Filipinos.
In terms of households or families, poverty incidence will increase to 18 percent under the without SAP scenario and 13.8 percent in the with SAP scenario.
These translate to 4.447 million poor households in the without SAP scenario and 3.405 million poor families in the with SAP scenario.
Based on the 2018 data, poverty incidence for households was at 12.1 percent, or 3.005 million poor families nationwide.
The study also stated that the estimated impact of the pandemic on poverty is almost the same for urban and rural areas, where an additional 700,000 families or 3.8 million individuals will become poor when no emergency assistance is implemented.
With SAP, however, the study stated that the impact is estimated to be greater in urban areas with about 300,000 families, or 2 million people becoming part of the new poor, compared to only 70,000 families or 800,000 individuals in rural areas.
The PIDS said many of the families and individuals who will become poor are residing in the National Capital Region, Calabarzon and Central Luzon to fall into poverty.
“Being the center of economic activity, the imposed community quarantine and the stringent physical distancing protocols affect industries and establishments in these regions, leaving its workers with less or more income than usual,” the PIDS study.
Inequality
IN a separate study, PIDS researchers said that while inequality in the Philippines is improving, it remains high in the pre-pandemic years.
The study titled Does Economic Growth Benefit the Poor? Reyes and her team said that inequality has been narrowing since 1997 when the Gini coefficient was at 0.5183 to 0.4305 in 2018.
The Gini coefficient is a measure of income inequality within the population which ranges from 0 to 1, with 0 indicating perfect income equality among families, and 1 indicating absolute income inequality.
Similar to the situation at the national level, income distribution in the urban areas has been the most equitable since 1991, with a Gini index of 0.4121 in 2018.
The Gini index of rural areas has been constantly increasing until it peaked and coincided with the Gini index of urban areas in 2012. It has since declined and is at 0.4118 in 2018, which is slightly lower than that of urban areas during the same period.
Reyes and her co-authors said inequality has improved given the higher share in income of the poorest 20 percent of the population.
They found that the share in income of the poorest 20 percent increased to 5.94 percent in 2018 from 5.05 in 2009 and 2012, as well as 5 percent in 1991.
“This has been the highest share of the poorest 20 percent among the available data since 1991. Meanwhile, the share of the richest decile slightly decreased from 35.3 percent in 2015 to 33.8 percent in 2018. In a perfect equality, the bottom 20 percent should receive 20 percent of the aggregate income,” the researchers said.
In order to address this, the researchers included in its recommendations maximizing the Community Based Monitoring System (CBMS) law passed in 2019.
The authors said this will help improve anti-poverty programs and poverty and inequality in general. They said that while there were a lot of anti-poverty efforts, increasing the impact of these programs and projects will require better data.
The PIDS research team said the CBMS can help in this regard. The CBMS is one of the tools developed in the early 1990s under the Micro Impacts of Macroeconomic Adjustment Policies (MIMAP) Project-Philippines.
The system seeks to provide policy-makers and program implementers with a good information base for tracking the impacts of macroeconomic reforms and various policy shocks. It has recently been institutionalized through a law.
The researchers also recommended that PSA consider improving the Family Income and Expenditure Surveys (FIES), the basis of poverty and inequality data in the country.
“One of the challenges in designing and implementing effective safety nets is lack of understanding of the dynamics of poverty. Future research on chronic and transient poverty would require panel data,” the team said.
“The Community-Based Monitoring System, recently institutionalized by Republic Act 11315 and placed under the supervision of the Philippine Statistics Authority [PSA], can be tapped to provide the much-needed panel data to enable us to understand better the movements in and out of poverty,” they added.