A More Differentiated Look at Poverty
by Solita Collas-Monsod
Former Secretary, National Economic and Development Authority

THERE'S at least some good news that came out of the latest Philippine Human Development Report (PHDR 2000). Of course, there is bad news too. But as the song goes, a spoonful of sugar helps the medicine go down, so let's start with the good news. One is that while the Philippines may have had a lackluster economic growth performance (since at least 1975), it has done relatively well with regard to human development, as measured by the country's Human Development Index (HDI). For those who are not familiar with the term, human development is the process of enlarging people's choices, the most essential of which are to live a long and healthy life, to acquire knowledge and to have access to resources needed for a decent standard of living.

The HDI, on the other hand, is a measure – devised by people like Nobel Laureate Amartya Sen and the late Mahbub Ul Haq, who was the originator of the global Human Development Report published by the UNDP – which incorporates the three above-mentioned components. Since its introduction in 1990, the HDI has been almost universally accepted as an alternative measure of development, supplementing (not instead of, mind you) gross national product or GNP. The Philippines is the first country to require its compilation as an official statistic.

The underlying rationale for devising such an index was the recognition that incomes do not necessarily translate into outcomes, or alternatively, that economic growth does not automatically result in development. As Ul Haq put it, "We need a measure of the same level of vulgarity as GNP – just one number – but a measure that is not as blind to social aspects of human lives as GNP is."

The closer the HDI is to 1 the better the performance of the area, and the closer it is to 0, the worse. Those with HDI below 0.5 are considered to have low human development; those with 0.8 or higher have high; and those in between have medium human development.

So now, back to the good news:

Among the Philippines' 77 provinces, 64 are considered to be in the medium human development category (actually, Metro Manila, with an HDI exceeding 0.8, is classified as enjoying high human development). The 10 provinces with the highest HDIs as of 2000 were Rizal, Ilocos Norte, Bataan, Cavite, Laguna, Benguet, Bulacan, Misamis Oriental, Iloilo and Pampanga.

Furthermore, between 1997 and 2000, 43 provinces showed improvements in their HDIs. The top gainers were Davao Oriental, Leyte, Mt. Province, Siquijor, South Cotabato, Iloilo, Southern Leyte and Nueva Vizcaya.

What is even more gratifying is that if we rank the provinces from highest (1) to lowest (77) in terms of HDI, and compare this with their ranking (also from highest to lowest) in terms of their real per capita income, we find that several provinces rank at least 10 slots higher in human development than in income. This would tend to mean that these provinces – such as Nueva Ecija, which ranks 60th in per capita income but 27th in HDI – have translated their incomes into relatively better outcomes for their people than the other provinces. They got more human development bang for their buck, as it were. Other provinces that should also be congratulated in this regard are Camarines Sur, Albay, Lanao del Norte, Tarlac, Bohol and Negros Occidental.

Just as income is not considered sufficient as a measure of well-being and should be supplemented by the HDI, so also is income poverty not considered as a sufficient measure of deprivation, and should be supplemented by the so-called Human Poverty Index (HPI) – which is included for the first time in the PHDR 2002.

The HPI measures deprivation in the same three dimensions as the HDI: that is to say, longevity, as measured by the probability at birth of not surviving to age 40; knowledge, as measured by the functional illiteracy rate; and overall economic provisioning as measured by the percentage of people not using improved water sources and the percentage of children who are underweight.

Here the good news is that in 66 of our 77 provinces, human poverty (as measured by HPI) is less, and in many cases, much less, than income poverty (as measured by poverty incidence).

What is more, some provinces are relatively more effective than others in helping the poor, as measured by the larger positive differences between their poverty incidence rank and their HPI rank (where 1 is the least poor and 77 is the most poor).

There are 16 provinces whose human poverty rank is better than their income poverty rank by at least 20 rungs. Siquijor, for example, is in the bottom 10 (No. 68) provinces with respect to poverty incidence, but ranks No. 12 in HPI – an improvement of 56 slots. Marinduque shows the same differential. Among the others are Camarines Sur, Mindoro Oriental, Catanduanes, Romblon, Eastern Samar, Nueva Ecija, Albay, Misamis Occidental and Bohol.

The bottom line here is that all these tend to show that we Filipinos, at least those in the provinces mentioned above, are doing something right, because we are managing to maximize the choices that are available to us given our incomes, or to minimize the negative consequences to human development of our income poverty.

Let's hold that thought. We can deal with the bad news later.

- Philippine Daily Inquirer, July 13, 2002

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