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Overview of the Refinements in the Official y gy Provincial Poverty Estimation Methodology

Presented by Dr. Lisa Grace S. Bersales Chairperson

Small Working Group on the Estimation of the Food Thresholds of the Technical Committee on Poverty Statistics

Press Conference

10:00 AM, 8 February 2011, NSCB Operations Room

Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

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NATIONAL STATISTICAL COORDINATION BOARD

Outline of Presentation

I. II.

Background Highlights of the Refinements in the Official Poverty Estimation Methodology

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

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I. Background SOURCE OF OFFICIAL POVERTY STATISTICS? Executive Order 352 Designation of Statistical Activities that will Generate Critical Data for Decision-making of the Government and the Private Sector · Issued on July 1, 1996 (with regular updates from time to time) · NSCB generates and releases the official poverty statistics in the Philippines · The Technical Committee on Poverty Statistics (TC PovStat) is in charge of the formulation/development of the official poverty estimation methodology

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

I. Background Who are the members of the Technical Committee on Poverty Statistics (TC PovStat)?

The Committee is composed of professionals/experts who have undertaken significant studies on poverty. Membership in the committee is based on individual expertise and not on representation by agency/institution.

Chairperson: Dr. Celia M. Reyes

Philippine Institute for Development Studies (PIDS)

Vice Chairpersons: Dr. Romulo A. Virola

NSCB

Administrator Carmelita N. Ericta

National Statistics Office (NSO)

Chairpersons of the Four Small Working Groups: Dr. Lisa Grace S. Bersales

UP School of Statistics UP School of Economics

Dr. Arsenio S. Balisacan

Dr. Zita VJ Albacea

UP Institute of Statistics

Ms. Dolores de Quiros-Castillo

Former Asst. Sec., National Anti-Poverty Commission

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

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I. Background Who are the members of the Technical Committee on Poverty Statistics (TC PovStat)? Members: Dir. Erlinda M. Capones Usec. Alicia R. Bala

National Economic Dev't Authority NSO Dev t. Dept. of Social Welfare and Dev't.

Dep. Adm. Paula Monina G. Collado

OIC-Dir. Myrna Asuncion

NEDA

Asst. Sec. Gen. Lina Castro

NSCB NSO

Dr. Jose Ramon Albert

PIDS

Ms. Emma Fabian Dir. Manuel Gotis

OIC-Dir. Jessamyn O. Encarnacion

NSCB

Dept. of Interior & Local Gov't.

Dr. Arturo Pacificador

De La Salle University

Dir. Romeo S. Recide Dr. Jocelyn Juguan

Bureau of Agricultural Statistics Food & Nutrition Research Institute Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

Ateneo de Manila University

Prof. Ofelia M. Templo Ms. Susanita Tesiorna

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Trade Union Congress STATISTICAL COORDINATION BOARD NATIONAL of the Philippines

I. Background WHY THE NEED TO REFINE THE METHODOLOGY? HAS THE DEFINITION OF POVERTY CHANGED? 1. The definition of poverty did not change. The refinements are only meant t b tt measure the poor. fi t l t to better th 2. It is a standard practice among official statisticians in national statistical systems all over the world to refine and update methodologies and statistical frameworks to better reflect current phenomena. 3. The UN Statistical Commission prescribes international g standards and guidelines on statistical measurement and practices but there is no international standard on measuring poverty.

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

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I. Background WHY THE NEED TO REVISE THE METHODOLOGY? HAS THE DEFINITION OF POVERTY CHANGED? The latest refinements on the methodology is the third since the first official methodology was adopted in 1987. History of the official poverty estimation methodology

Year 1987 1992 2003 1 2 Refinements were made so as not to overestimate poverty Refinements were made to generate provincial poverty statistics b using i i l t t ti ti by i regional menus priced using provincial prices. Refinenements were undertaken to ensure comparability of estimates across space and over time.

NATIONAL STATISTICAL COORDINATION BOARD

Refinements

Considerations

2011

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

I. Background WHY THE NEED TO REVISE THE EXISTING METHODOLOGY? 4. To address some issues/concerns raised on the Official Poverty Estimation Methodology

· Issues on the estimation of the food threshold, poverty threshold, incidence and other measures of poverty and improvement of poverty, the relevance of official poverty statistics. Issues particularly on the comparability of poverty estimates across space and over time.

·

5. Instruction of the NSCB Executive Board

· The NSCB Executive Board, in its meeting on 6 November 2002, instructed the NSCB Technical Staff to undertake a phased revision of th official provincial poverty estimation methodology. f the ffi i l i i l t ti ti th d l The 1st Phase was undertaken in the development of the existing official estimation methodology, approved per NSCB Resolution No. 1, Series of 2003.

·

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

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I. Background What were the activities undertaken by the TC PovStat in comingup with the refinements in the methodology?

Activities

1. Project on the Comprehensive Documentation of f Official Poverty Statistics 2. Overall review of the official poverty estimation methodology

Description

- Come-up with a complete documentation of all components of the poverty methodology.

Output

-Documentation of the methodology - Reviewed/documented findings of various papers that discussed the issues being raised on the methodology. - Recommendations on the poverty estimation methodology

- Started in 2008 - Took off from the outputs of the Documentation Project - Undertaken thru the creation of 4 Small Working Groups (SWGs) - recommendations were finalized based on recommendation of TC PovStat - The Committee intended to refine methodology at the start of new administration to avoid any misconception on the objectives.

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

I. Background What were the activities undertaken by the TC PovStat in comingup with the refinements in the methodology?

Activities

3. 3 Consultative Forum on the Proposed refinements on the Official Poverty Estimation Methodology 4. Reporting/updating to the NSCB Executive Board

Description

-Held on 28 January 2011 Held - Participated by 40 guest from various agencies.

Output

-Documentation of the Documentation methodology - Reviewed/documented findings of various papers that discussed the issues being raised on the methodology.

- The Board was informed in its 5 meetings in 2009 and 2010 on the Committee's plan on the 2009 official p poverty statistics

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

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II. Highlights of the Refinements in the Methodology

Components

Existing Methodology Income-based

Proposed Methodology Income-based

Use provincial food bundles, with food items that are:

Remarks/Considerations No change

-To capture province-specific To province specific characteristics in the estimation of provincial poverty statistics -To ensure that the bundle chosen for the province is "superior" over another bundle based on preferences, that is, the former will provide the least cost but with the same level of utility -Used a national reference food bundle as a starting point to enhance consistency across space

I. ESTIMATION OF THE FOOD THRESHOLD

a. Artifice to use Use region-based food region based bundles that are:

Low-cost

-Least cost food bundle for the province as it passed the Test of Revealed Preference

-Were developed based on an indicative national food bundle

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

II. Highlights of the Refinements in the Methodology

National reference food bundle from the Test of Revealed Preference

Meal Time Breakfast Viands Scrambled egg Coffee with milk Boiled rice/rice-corn mix Lunch Boiled/ginataang monggo with malunggay and dried dilis Banana Boiled rice/corn mix Dinner Fried fish/boiled pork Vegetable dish Boiled rice/rice-corn mix Snacks Bread or boiled rootcrop

Sample translation: NCR

Meal Time Breakfast Viands Scrambled egg Coffee with milk Boiled rice Lunch Boiled monggo with malunggay and dried dilis Banana, latundan Boiled rice Dinner Fried tulingan Boiled kangkong Boiled rice Snacks Pandesal

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Press Conferenceon the range of usual intakes of households who consume these items, withNATIONAL STATISTICAL COORDINATION BOARD 1- Based on the 2009 Official Poverty Statistics consideration of households in the 2nd income LSBersales/ 08 households2011 quintile and all February regardless of income class

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II. Highlights of the Refinements in the Methodology

Components Existing Methodology Use of the FE/TBE ratio by province urban-rural for the respective FIES year. Proposed Methodology Remarks/ Considerations

II. ESTIMATION OF THE POVERTY THRESHOLD a. FE/TBE ratio -Use the average FE/TBE ratio for 2000, 2003, 2006 and 2009 - To ensure that the parameters are fairly stable since FE/TBE ratios do not change dramatically over time (See graph on next slide) -To ensure consistency over time for at least two administrations -To ensure consistency across space -The use of a constant FE/TBE ratio has been suggested by the NSCB Technical Staff since 2003.

Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

-To be used for 12 years

- Where the FE/TBE ratio for each FIES year is nationally determined

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NATIONAL STATISTICAL COORDINATION BOARD

II. Highlights of the Refinements in the Methodology

Will back estimates be available? · Parallel estimates for 2009 using the old methodology were generated. · Likewise, back estimates for 1991, 2003 and 2006 using the , , g new methodology will be released to be able to look at trends in poverty using the same methodology, specifically for MDG monitoring · To facilitate the computation, food thresholds would be estimated based on the regional food CPI, given the manpower and resource constraints of the NSCB · E ti Estimation of th other poverty statistics (e.g., poverty ti f the th t t ti ti ( t threshold, incidence, income and poverty gap, severity of poverty) follow the same recommendations of the TC PovStat

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

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Maraming Salamat po!

URL: http://www.nscb.gov.ph e-mail: [email protected]

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Press Conference on the 2009 Official Poverty Statistics LSBersales/ 08 February 2011

NATIONAL STATISTICAL COORDINATION BOARD

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