An economist of the World Bank (WB) is urging the Philippine government to update its poverty threshold in order to present a more realistic view of the country’s poverty situation.
The Philippines must consider setting a multidimensional poverty measure that will not only take into account the shortfall in income and consumption, but also low educational achievement, poor health and nutritional outcomes and lack of access to basic services, according to Andrew Mason, WB Acting Chief Economist for the East Asia and Pacific region.
“The Philippines has been using a national poverty line. It is a monetary-based measure. It is very useful to look at that as a consistent poverty line over time because it gives you an absolute metric on how well-being increases and poverty decreases over time,” Mason said in a press briefing held Wednesday.
“As countries like the Philippines increase their income levels and general levels of well-being, two things can be advantageous: reconsider from time to time whether the poverty line is appropriate and if not, consider updating the line based on the basket of goods that the poor consumes,” he added.
The economist pointed out that the threshold must move from the absolute poverty line to a level, which is closer to a lower middle income or upper middle income economy such as the Philippines.
An updated poverty threshold will enable policymakers in the country to craft effective measures that will improve the condition of poor Filipinos.
In its latest study, the World Bank stated that monitoring poverty at higher poverty lines is increasingly important as countries grow richer.
“A poverty line that is too low can lead to an inaccurate assessment of an individual’s ability to function in society in a socially acceptable manner. Participation in society with dignity may require more goods in a richer country than in a poorer country,” WB said in its economic update for the East Asia and Pacific region, which was released this month.
The international financial institution noted that the International Poverty Line (IPL), which is set at USD 1.90 per day in 2011 purchasing power parity (PPP), has gradually become less relevant to the developing East Asia and Pacific region, which is today comprised exclusively of middle-income countries.
The WB reported that families in lower middle income countries must earn at least USD 3.20/day in 2011 PPP while those in upper middle income countries should earn at least USD 5.50/day in 2011 PPP for them to be not considered poor. (PNA)
