Explanatory Notes on the 2003 Poverty Estimates

A. Trends in poverty incidence should be analyzed vis-à-vis changes in the real income of lower income groups instead of changes in the overall real average income

• When analyzing poverty incidence, it is not sufficient to look at the overall real income since poverty incidence is affected only by changes in the real earnings of the lower income groups, particularly, those whose per capita incomes are closest to the poverty threshold.

• As Table 1 would show for example, poverty incidence in NCR decreased notwithstanding the 6.5 percent drop in the overall real per capita income. A look at the income distribution would reveal that the real average per capita income of families in the lowest income group, which includes families with per capita incomes closest to the poverty threshold, did increase from 2000 to 2003 lending support to the improved poverty incidence despite the decline in the overall real per capita income. (Note that poverty incidence in 2000 and 2003 are 5.7 and 5.0 percent, respectively, which both fall under the first income decile. This means that it is in this income group where families with per capita incomes closest to the poverty threshold can be found. Families in the lower income portion of the group are classified as poor and those in the higher income portion are classified as non-poor. Therefore, changes in poverty incidence should be analyzed vis-à-vis the trends in the per capita income of this income group.)

Table 1
Poverty Incidence, Poverty Threshold, and REAL Per Capita Income^a
by Decile, NCR, 2000 and 2003

• A similar consistent pattern between the trend in the poverty incidence and the trend in the real per capita income of the appropriate income group was observed at the national level and at the regional level except in Region X as shown in Appendix Table A.

For these notes, inquiries may be made with Ms. Redencion M. Ignacio or
Ms. Glenita V. Amoranto at telefax number (632) 896-7981 or at their
e-mail addresses rm.ignacio@nscb.gov.ph / gv.amoranto@nscb.gov.ph.