On self-rated poverty and public policy: To err is divine


At the height of COVID-19 pandemic, OCTA Research (OCTA) began to issue statements on potential surges of the virus that somehow compelled the National Government to act. They started with eight research fellows, thus the name OCTA. Their regular reports covered projections on cases and details on which local government units and regions were showing the highest number of COVID-19 incidence at a given time.

But not a few raised concerns about the accuracy of OCTA’s predictions because they were anchored on the data of the Department of Health (DoH) over the two preceding weeks. In August 2021, some members of the House of Representatives summoned OCTA, mostly UP professors, to a virtual Inquisition. Their questions focused on their source of funding, their communication strategy, their analysis, and their policy recommen-dations. Some of them even challenged their authority to declare a “surge” and in pinpointing localities as potential “epicenters” of the coronavirus.

They were branded as “alarmist” and their forecasts “overboard.” They were charged with triggering “panic” among the public.

The congressional hearing sounded like a circus because some warned that OCTA’s commentary was too much, others suggested that they be banned from making pronouncements as if the Philippines were not a democra-cy but a dictatorship.

What was sad was that very few of our representatives realized that OCTA’s analysis and forecasts, if they did not exist, would have to be brought to life out of necessity. There was no option because the DoH was not re-leasing advisories detailed enough to either inform or calm the public. In the same hearing, a DoH official effectively admitted as much, when she committed to try sharing more timely information with the public.

What about the issue of the accuracy and reliability of OCTA’s projections?

OCTA was quite transparent about the limitations of their forecasts. Their motivation was to build useful models subject to constant refinement. Nothing wrong with that.

Such beefs against the group like preempting lockdowns without inputs from the business community should have been the job of the DoH and the national government, and our health officials should have commandeered sufficient knowledge-based resources to back up their proposed mitigation measures. OCTA forecasts could have been one of those data groups to be monitored.

OCTA had no pretension about their forecasts of a surge based on the dynamics of the virus. One DoH official’s expectation that the forecasts should be complemented by data-driven directives on the magnitude of addi-tional testing, isolation capacity, and vaccination was just too much. We had little of those, and the DoH itself hardly provided civil society with what they expected from a tiny private institution like OCTA.

One of OCTA officers clarified to the House in September 2021 that “our projections and our models have 100% detection accuracy. The important matter is our models predicted a surge, and it happened. We only predicted a surge three times, and it all happened.”

SELF-RATED HUNGERJust this week, no less than the Philippine News Agency (PNA) reported that a new OCTA survey “found that fewer Filipino families rated themselves poor and hungry in the first quarter of 2024.” The PNA cited OCTA’s Tugon ng Masa survey, done from March 11 to 14, about their respondents’ self-rated poverty, and the result was quite impressive. Self-rated poverty dropped from 45% in the 4th quarter of 2023, to 42% in the 1st quarter of 2024.

Those ratios mean that some 11.1 million families considered themselves better off compared to 11.9 million a quarter earlier, or 800,000 families less. The survey also claimed that this represents a “continuing downward trend in self-rated poverty” observed since July 2023 when it was at a high 50%.

OCTA also covered self-rated hunger. The Tugon ng Masa survey found this at 11% or some 2.9 million Filipinos. Self-rated hunger is involuntary hunger felt in the last three months. The 1st quarter 2024 result stood at three percentage points lower than the previous quarter’s 14% or some 3.7 million families, or fewer by 800,000 families.

The PNA also reported that the Tugon ng Bayan survey was conducted using face-to-face interviews of some 1,200 adults nationwide with a +/- 3% margin of error at a confidence level of 95%.

How do we appreciate these results of self-rated poverty or self-rated hunger?

We cannot think of a better source than Mahar Mangahas of Social Weather Stations (SWS), the guru of social weather reporting. He was given the World Association for Public Opinion Research (WAPOR) Helen Diner-man Award for his successful petition before the Supreme Court. The High Court ruled that legislation suppressing the publication of election surveys was unconstitutional.

Twenty-five years ago, in the December 1999 issue of Philippine Review of Economics and Business, Mangahas published an excellent exposition on “Monitoring Philippine Poverty by Operational Social Indicators” which he had presented to the World Bank’s Poverty Reduction and Economics Management (PREM) Network earlier in June 1999 at the University of Maryland.

He clarified that “all poverty measurement approaches incorporate some norms or values.” In contrast to the orthodox, pre-determined, presumably objective, poverty-line approach, the self-rated approach seems more subjective, employing bottom up, community, or citizens’ values. He explained that SWS’ own survey involves the family head who is queried by showing him two cards and asking him where he would consider his family to be: poor or not poor.

In the same paper, Mangahas claimed that SWS had been tracking the incidence of Philippine poverty using the self-rated approach twice a year at first, then quarterly thereafter. Official data on poverty was limited because the survey was done less frequently presumably because of logistical issues. Mangahas showed their monitoring from the last few years of then President Marcos, Sr. through the presidencies of Corazon C. Aquino, Fidel V. Ramos, and Joseph Estrada, and it was moderating.

He explained that the practical distinction between income-defined poverty and self-rated poverty was not so much that one is objective and the other is subjective. Surveying income-based poverty could be more com-plex and costly. Against the imperative of monitoring poverty, or even hunger, more frequently for public policy concerns, self-rated poverty surveys actually “result in greater knowledge of the nature of poverty, without running into any highly implausible features, as might be feared by those previously unfamiliar with subjective social indicators and thus still hesitant to use them.”

A quick comparison between SWS and OCTA survey results for self-rated poverty shows very close findings at least for the last quarter of 2023. SWS reported that nearly 47% of Filipino families rated themselves poor, slightly down compared to the 48% in the third quarter last year. This translates to around 13 million poor families in the last quarter of 2023.

On the other hand, OCTA’s ratio of self-rated poverty was at 45% or 11.9 million households. Like the SWS’ result, this was slightly lower than the 46% of the previous survey. It had the same number of respondents, 1,200 nationwide, as SWS’ and the periods of the surveys were comparable — Dec. 8-11 for SWS and Dec. 10-14 for OCTA. For both surveys, those who responded they were not poor actually dropped.

What has been the trend in the incomed-defined official poverty surveys of the Philippine Statistics Authority (PSA)?

Unfortunately, as Mangahas correctly stressed, the data would be dated. The latest data, as announced by the PSA last December, was as of the first quarter of 2023 compared with the first quarter of 2021 since these sur-veys are done once every two years.

While the trend was coming down between 2021 and 2023, the ratio was much lower at 16.4% or just about 4.51 million Filipino families. This is population-based rather than in terms of families. The current level remains elevated compared to pre-pandemic levels.

We are definitely encouraged by the general trend of moderating poverty even if self-rated. Some quarters may take issue with this observation due to some counterevidence, like the pandemic scarring on labor markets and education, and rising prices. But some macroeconomic indicators could support this improving social reality among which include sustained economic growth and more job opportunities.

But policy-wise, it will ever be best to sustain a more fundamental approach to poverty alleviation and hunger. We know the drill, but self-rated poverty should never lead permanently to some anti-poverty palliatives. Cash transfers are necessary, but we would need more than that, or more than the current food stamp program. As far as fighting poverty and hunger, it is better to overkill than to undershoot. To err on the side of excess is divine.

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.