POVERTY THRESHOLD/LINE

• The country’s annual per capita poverty threshold (also called as poverty line) is P13,913, an increase of 22.9 percent over the P11,319 estimate in 1997.

• All regional estimates on the annual per capita poverty threshold increased from 10.1 percent to as high as 27.2 percent.

• National Capital Region (NCR) posted the highest poverty threshold at P18,001 per person or an increase of 25.9 percent over the 1997 estimate of P14,299.

• Among regions, Region VII registered the biggest increase of 27.2 percent over the 1997 estimate, followed by Region II (26.4%), ARMM and NCR (both with 25.9%).

• Other regions with large increases in poverty lines between 1997 and 2000 include Region V (25.4%), Region VIII (23.9%), Region III (23.8%), Region I (23.6%), Region IV (22.9%), CAR (22.4%), Region VI (19.8%) and Region XI (19.5%)

• Regions with relatively smallest increase in poverty line include Region XII (10.1%), Region IX (13.5%) and Region X (16.2%).

POVERTY INCIDENCE

• Based from the preliminary results of the 2000 FIES, the number of families below the poverty line of P13,913 increased from 31.8 percent to 34.2 percent or an increase of 2.4 percentage points. In relation to the population, poverty incidence rose from 36.8 percent in 1997 to 40.0 percent in 2000.

• Urban-rural differential in poverty incidence is notable with urban areas having lower incidence than rural areas. From 17.9 percent in 1997 to 20.5 percent in 2000, poverty incidence of families in urban areas increased by 2.6 percentage points. In rural areas, it increased by 3 percentage points from 44.4 percent to 47.4 percent.

• In all areas, eleven regions had increased the number of families with income below the poverty line. ARMM had the biggest increase of 11.5 percentage points, followed by Region IX (6.4), Region V (6.2) Region VII (4.5) Region VI (3.5), NCR (3.3), Region III (3.2), Region XI (3.0), Region VIII (2.7), Region XII (0.9) and Region IV (0.3).

• The number of families below poverty lines decreased in four (4) other regions. These include CAR with the biggest decrease of 5.6 percentage points, Region II, 1.5 percentages points, Region X,1.3 percentage points and Region I, 0.6 percentage point.

• Meanwhile, in the rural areas, poverty incidence of five regions have improved. These include CAR down by 5.5 percentage points, followed by Region II (-2.1%), Region I (-0.8), Region IV (-0.5) and Region X (-0.4).

• Regions with highest poverty incidence in 1997 also had the highest poverty incidence in the year 2000: ARMM at 68.8 percent, Region V at 56.3 percent and Region XII at 50.9 percent.

• The number of poor families reached 5.2 million up by 707 thousand families or 16 percent higher than in 1997. In the urban areas, the number of families increased by 26.9 percent while in the rural areas, the number of families increased by 11.6 percent over the 1997 estimate.

SUBSISTENCE THRESHOLD

• The subsistence threshold (also called food threshold) increased from P7,710 in 1997 to P9,183 in 2000, up by 19.1 percent. In the urban areas, the subsistence threshold increased by 19.8 percent and in the rural areas, by 17.8 percent.

• The number of families below the subsistence threshold was estimated at 2.6 million or 16.9 percent of the families, an increase of 0.7 percentage point over the 1997 estimate. In the urban areas, the increase was 0.4 percentage point, while in the rural area, it increased by 1.5 percentage points.

• Increases in the incidence of families falling below the subsistence threshold were observed in 6 out of 15 regions from 0.8 percentage points to as high as 10.4 percentage points. ARMM posted the highest increase of 10.4 percentage points followed by Region IX (5.8), Region V (4.4), Region VI and VII (2.8) and NCR (0.8).

• On the other hand, nine regions had improved; the estimates on subsistence incidence declining by as much as 7.4 percentage points registered in CAR. Other regions showing improvement include Region XII, declining by 2.9 percentage points, Region I, by 1.7 percentage points, Region XI, by 1.3 percentage points, Region VIII, by 1.1 percentage points, Region II, by 0.8 percentage point, Region III, by 0.4 percentage point, Region X, by 0.3 percentage point and Region IV, by 0.2 percentage point.

• In both urban and rural areas, CAR, Region I, and Region XI experienced an improvement in the subsistence incidence. Region VIII and Region X registered improvement in subsistence incidence in urban areas alone while Region XII, Region II and Region III registered improvement in the rural areas.

INCOME GAP

• The country’s income gap was estimated at 32.1%, higher by 0.5 percentage point over the 1997 estimate. This means that the income of those below the poverty threshold have to be raised by 32.1 percent to surpass the poverty threshold.

• NCR consistently had the lowest income gap at 22.4 percent, up from 18.9 percent in 1997. Also, NCR is one of the seven regions where the income gaps had worsened from 1997 to 2000.

• Other regions with income gaps lower than the estimate at the national level were Regions III (22.7%), II (28.4%), IV (30.2%) and VIII (30.5%).

POVERTY GAP

• The country’s poverty gap was estimated at 11.0 percent, up by 1 percentage point over the 1997 estimate of 10.0 percent.

• NCR had the lowest poverty gap of 2.2 percent, a decrease of one percentage point from 1997 to year 2000.

• Four regions showed some improvement in their poverty gap. CAR had the highest decrease of 2.9 percentage points followed by Region XII (-2.2), Region X (-0.6), and Region I (-0.3).

• Regions with high incidence of poverty were also the regions with high poverty gaps such as ARMM (24.4%), Region V (19.9%) and Region XII (17.0%).

• Poverty gaps in urban areas are generally lower than those in rural areas. Only Region II showed otherwise with its urban poverty gap (9.8%) higher that in the rural areas (8.4%).

EXPLANATORY TEXT

The data presented in this press release were taken from the 2000 Family Income and Expenditures Survey (FIES) preliminary results with inputs from the Food and Nutrition Institute (FNRI) and the Technical Working Group (TWG) on Income Statistics at the National Statistical Coordination Board (NSCB). The FIES gathers data on the sources of income (in cash and in kind) and the level of consumption by item of expenditures, family size, number of family members employed for pay or profit (wage/salary or own account workers), occupation, age and educational attainment of the household head, and housing characteristics.

Determination of Low Cost Diets, by Region, Urban-Rural

Low cost diets on a per capita basis are constructed for the regions of the country, subdivided into urban and rural. One day sample menus for each urban-rural area of the region are provided by the FNRI taking into consideration the nutrient requirements, food commonly eaten in the areas, and the generally cheap foods. These menus, however, are used for purposes of estimating the food threshold and not to be seen as prescribed menus.

Nutritional requirement

The dietary goal of the low cost menu plans to meet 100% of the per capita Recommended Dietary Allowance (RDA) for energy and protein and 80% of the per capita RDA for vitamins, minerals and other nutrients. The RDA for energy is 2,000 calories.

Food Commonly Eaten in the Area

The menus are typical of a Filipino diet and representative of the different regions. The typical Filipino pattern is composed of three meals and one snack and usual combinations are followed like having rice with a viand. Variation in food preference across regions has been reflected in the menus. The consumption patterns are based on the results of the latest Consumption Survey of FNRI.

Cheap Foods

The term "low cost" implies the utilization of cheap foods for the construction of the sample menus. Thus, nutritionally economic foods are considered to comprise the menu. This means that an additional quantity of such food items entails comparatively lower cost but has the same nutritional contribution as the other costly foods. On the other hand, some foods, although a little more costly, are included in the menu because they are the only source of the nutrient required. The ingredient of the respective menus are listed in weights (grams) based on an individual’s intake. The nutrient content is calculated and compared to the requirement.

Determination of Own-Produced Components

For the purpose of costing the menus, the proportion of food "bought" and "not bought" are determined. These are based on the results of the National Nutrition Survey of the Philippines conducted by FNRI.

Derivation of Costs

The menus are valued using average actual prices, but applying different prices for the "bought" and "not bought" components. For the bought component, the following sets of prices are used: a) NSO Retail prices in Metro Manila for NCR; b) the composite prices derived from NSO urban provincial retail prices for urban regions outside NCR; and c) prices paid by farmers for rural regions outside NCR as gathered by BAS. For the own-produced commodities, prices received by farmers gathered by BAS are used in cases where price data are available. In cases where data are not available, a price value is computed based on the price of more or less similar commodities and on average value of commodities for which price data are available.

To get the price per commodity, the required weight of the food in edible portion is converted into its "as purchased" (AP) equivalent. Price per commodity is then applied as follows;

The total cost of the food menu (in terms of peso per day per capita) is then computed by aggregating the cost per commodity.

Computation of the Food Threshold

The per capita per day food cost is multiplied by 30.4 ( approximate number of days per month) to get the monthly food threshold or by 365 days (30.4 days per month x 12 months) to get the annual food threshold.

The annual food threshold derived is thus interpreted as the subsistence threshold – the annual income necessary to meet nutritional requirements.

Subsistence Incidence

The subsistence incidence is measured by determining the number of families with per capita annual incomes below the food threshold. The per capita annual income of each sample household in the Family Income and Expenditures Survey is compared to the food threshold to determine whether it is above or below the threshold. The magnitude of sample families determined to be poor are then blown up by the appropriate raising factor of the survey.

Poverty Threshold

In order to estimate the total poverty threshold (food plus non-food basic needs), the food threshold is divided by the proportion of the food expenditures (FE) to total basic expenditures (TBE) derived from the latest FIES using the FE/TBE’s of families within the +/- 10 percentile of the food threshold. TBE is the aggregate of expenditures on food, clothing and footwear; fuel, light and water, housing maintenance and other minor repairs; rental/rental value of occupied dwelling units; medical care; education; transportation and communications; non-durable furnishings; household operations and personal care and effects. The proportion used is derived from patterns of expenditures of families/individuals whose annual per capita incomes fall below the annual per capita food threshold.

Poverty threshold are computed for each region, on an urban/rural basis. The poverty threshold for the region is the weighted average of the urban/rural thresholds.

Poverty Incidence

To get the magnitude of poverty, the per capita annual income of each sample family of the FIES is computed and compared to the respective annual per capita poverty threshold of the region (urban/rural) where the sample family resides. Those with incomes below or above the poverty threshold are identified. The number of sample families falling below the poverty threshold is blown up to estimate the total number of poor families. For each region/urban-rural area, appropriate raising factor s are used depending on the sampling fractions used in this survey.

The number of families below the poverty threshold at the national level is determined by adding the number of families below the poverty threshold for each region, urban and rural.

The incidence of poverty is computed by getting the percentage of the number of families below the poverty threshold to the total number of families.

Income Gap Ratio

The average income shortfall (expressed in proportion to the poverty line) of those below the threshold.

Poverty Gap Ratio

The income short fall (expressed in proportion to the poverty line) over the whole population.

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