SELF-RATED POVERTY IN THE PHILIPPINES, 1981-1992

The definition of poverty in terms of adequacy of income or expenditures is not conducive to analysis of time-trends in poverty, because it is too expensive to survey income or expenditures frequently. On the other hand, the poverty-self-rating approach is an economical means of generating a time-series. The bottom-up perspective on poverty is socially meaningful in itself, irrespective of its correlation with poverty measured from the top down. Unlike official poverty lines, poverty thresholds obtained by the self-rating approach are not institutionally manipulable. Cross-sectionally, the Philippine data on self-rated poverty and self-rated poverty lines have familiar economic-demographic characteristics. Use of the self-rating approach in the Philippines since 1981, enabling poverty to be surveyed very many times, shows that poverty has been quite volatile. In contrast, the official series on poverty has only three data points (1985, 1988, and 1991) within that period. Regression analysis attributes the volatility in self-rated poverty during 1981-92 mainly to changes in the inflation rate, and secondly to changes in the unemployment rate. Changes in per capita income, however, were not significant in explaining changes in the level of poverty.