Multidimensional Poverty in the Philippines: Trend, Patterns, and Determinants

Geoffrey Ducanes and Arsenio Balisacan

Multidimensional Poverty - Philippines

There is government awareness that focus should be on povertys many aspects not just income poverty
This is evident in the Medium-term Philippine Development Plan of every president since 1992 which refers to human development goals and not just income poverty targets. Due mainly to effective lobbying by NGOs like the Human Development Network

Multidimensional Poverty - Philippines

e.g. KALAHI-CIDSS
acronym for current governments flagship poverty project (roughly translatable to Arm-inarm Against Poverty) involves funding support for likes of road, water, health and day care projects for selected towns/municipalities

Multidimensional Poverty - Philippines

e.g. KALAHI-CIDSS
steps in town selection
1. Choosing 20 poorest provinces out of 78 total in terms of official income poverty 2. Within each of these 20 provinces, choosing eligible municipalities based on a composite index of income level, food consumption, clothing consumption, quality of shelter, disaster vulnerability, and citizen participation 3. etc.

Multidimensional Poverty - Philippines

Still, the literature in the country on multidimensional poverty is lagging compared to income poverty. Two main reasons
Income poverty, rightly or wrongly, is seen to be the more pressing problem. Justification for this may take the following form, for instance.

Income poverty more pressing?

Indicator Philippines Medium human % difference development countries 4,269 80.4 64 67.2 -2.3 15.2 26.6 3.9

Per capita GDP Adult literacy Combined enrollment ratio Life expectancy

4,170 92.6 81 69.8

Multidimensional Poverty - Philippines

Data constraints. Many important non-income indicators such as literacy rates, mortality rates, life expectancy, and nutrition status of children, access to health and education facilities are obtained either at long intervals of time or irregularly

Data frequency
Life expectancy Infant mortality Literacy every 10 years every 10 years survey held twice in last 15 years, with definition changing held thrice in last 15 years by different agencies

Nutrition

Multidimensional Poverty - Measurement

Multidimensional indices have been constructed at the level of provinces. Important particularly in making local leaders and the people more accountable for their performance.
HDI real per capita income, primary and secondary enrolment rate, high school graduate ratio, and life expectancy HPI probability at birth of not surviving to age 40, functional illiteracy rate, % not using improved water sources, and % of underweight children under 5

Multidimensional Poverty - Measurement

Quality of Life Index (QLI) under-5 nutrition rate, attended births, elementary cohort survival rate, Minimum Basic Needs Index (MBN) # of families below the official poverty line (n), incidence of official poverty in the province (%), cohort non-survival rate (%), population illiteracy rate (%), infant mortality rate (per 1,000 livebirths), malnutrition rate (%), households without access to safe water (%), households with no sanitary toilets (%)

Multidimensional Poverty - Measurement

Table 1. Spearman's Rank Correlations of Provincial Welfare Measures* FLOL Official MBN' Indicator HDI HPI GRDI QLI poverty poverty Index incidence** incidence*** HDI HPI GRDI MBN' Index QLI FLOL poverty incidence** Official poverty incidence*** 1 -0.53 0.98 0.62 0.65 -0.84 . 1 -0.57 -0.76 -0.66 0.39 . . 1 0.65 0.68 -0.83 . . . 1 0.78 -0.59 . . . . 1 -0.53 . . . . . 1 . -0.80 0.55 -0.81 -0.77 -0.65 0.74 1 . . . . .

*Using provincial level data as unit of analysis **Uses fixed-level-of-living poverty lines and per capita expenditure ***Uses government computed poverty lines and per capita income

Multidimensional Poverty - Measurement

Table 2. No. of provinces identified in common among 20 poorest

Indicator HDI HPI MBN' Index QLI FLOL poverty incidence Income poverty incidence

HDI 20 12 12 10

HPI . 20 13 10

MBN' Index . . 20 9

QLI . . . 20

FLOL poverty incidence . . . .

Income poverty incidence . . . .

13

20

15

11

10

11

20

Multidimensional Poverty - Measurement

Multidimensional Poverty - Patterns

Table 3. Regional Welfare Indicators (2000)*
Region** CAR 1 2 3 NCR 4A 4B 5 6 7 8 9 10 11 12 13 ARMM HDI (2000) 0.620 0.639 0.567 0.634 0.830 0.669 0.535 0.523 0.587 0.563 0.519 0.530 0.606 0.594 0.569 0.520 0.395 HPI (2000) 19.5 12.8 14.7 11.7 9.6 12.1 15.3 17.8 20 17.7 18.4 23.6 16.6 21.7 20.5 17.4 31.1 GRDI (2000) 0.574 0.602 0.539 0.591 0.732 0.621 0.51 0.503 0.552 0.537 0.495 0.505 0.558 0.553 0.538 0.499 0.381 MBN' Index (1994) 0.57 0.72 0.72 0.73 . 0.77 0.64 0.56 0.59 0.67 0.61 0.47 0.59 0.58 0.51 0.54 0.37 FLOL Income QLI Poverty Poverty (1999) Incidence*** Incidence**** (2000) (2000) 44.2 0.71 20.1 43.7 0.8 20.2 36.2 0.78 29.6 23.0 0.78 16.4 12.1 . 5.6 24.8 0.78 14.7 60.2 0.59 39.2 62.9 0.59 49.7 51.5 0.6 28.1 44.0 0.75 39.3 51.6 0.60 46.8 54.9 0.61 49.0 49.3 0.71 31.2 45.0 0.59 23.1 59.2 0.57 32.5 56.7 0.59 33.9 72.6 0.55 58.9

*Regional figures are population-weighted averages of provincial figures in Appendix Table 1. **CAR Cordillera Administrative Region; NCR National Capital Region; ARMM Autonomous Region of Muslim Mindanao ***Based on fixed level of living poverty lines and per capita expenditure. ****Based on per capita income

Multidimensional Poverty - Patterns

The most glaring pattern is that regardless of which welfare indicator is used
Provinces (or regions) adjacent to and including Metro Manila, the countrys capital, have the most favorable levels, almost without exception The provinces in one region, the Autonomous Region of Muslim Mindanao, performs most poorly in almost all indicators. This is the region where majority of the countrys Muslim population is found and the base of a long standing armed conflict between secessionist groups and the government.

Multidimensional Poverty - Determinants

We examine multidimensional poverty in relation to a. geographical/topographical factors, b. infrastructure, and c. political economy variables

Geographical/topographical factors

Climate and topography, for instance, affect livelihood patterns, food production, and shelter , Climate is also intimately related with disease burdens (such malaria in tropical areas, meningitis in mountainous areas) and health Difficult terrain, as well as frequent inclement weather also makes childrens access to school more grueling.

In our regressions, geography is represented by dummies for climate type, as well as a dummy for whether a province is predominantly mountainous and a dummy if it is coastal.

Infrastructure

Infrastructure facilitates trade and travel, raising income levels Infrastructure, say in the form of a good road network also facilitates the construction of, and transport to, further infrastructure such as markets, school buildings, and health centers.

Infrastructure is represented by road density and an indicator variable for the presence of international ports in the province. In addition, the population density, which is closely linked to the level of urbanization in an area, is included as an additional proxy infrastructure variable.

Political economy variables

Good governance, for instance, should lead to better welfare for the constituents The presence of armed conflict in an area, insofar as it represents a direct threat to life and health, impedes access to education and health facilities, and represents a grave psychological burden, should be detrimental to well-being.

As measures of good governance, we include a measure for the extent of local political dynasty and also provincial per capita budget expenditure on education. To represent conflict, we include a dummy for significant presence of communist armed insurgence (CPP-NPA) in the area and also a dummy for the Autonomous Region of Muslim Mindanao, a historically contentious region and the main base of Muslim insurgents.

Regression Results
Table 4. Regression Results Variable Climate type 2 Climate type 3 Climate type 4 Mountainous Coastal International port Road density 1990 Population density 1990 (000) Dynasty Educ expend per capita (P000) Communist insurgency ARMM Intercept No. of observations 2 R HDI 2000 Coeff p-value -0.08 0.00 *** -0.05 0.01 *** -0.07 0.00 *** 0.01 0.80 0.01 0.56 0.01 0.02 0.16 -0.06 0.04 -0.02 -0.15 0.55 72 0.673 0.69 0.54 0.01 *** 0.02 ** 0.17 0.16 0.00 *** 0.00 HPI 2000 Coeff p-value 1.86 0.25 3.48 0.02 ** 4.18 0.01 *** 0.58 0.59 1.35 0.45 0.20 -4.64 -2.05 1.04 0.00 2.44 18.57 16.32 72 0.668 0.86 0.02 ** 0.44 0.65 0.80 0.06 * 0.00 *** 0.00

*significant at the 10% level; **significant at the 5% level;***significant at the 1% level ****Regressions were done in Stata 8 using the robust method, which uses Whites adjusted standard error estimates. Diagnostic tests on multicollinearity, omitted variables, and normality of residuals were made and except in the case of the normality of residuals in the HDI regression, all were passed at the 5% level.

Regression Results
Table 4. Regression Results Variable Climate type 2 Climate type 3 Climate type 4 Mountainous Coastal International port Road density 1990 Population density 1990 (000) Dynasty Educ expend per capita (P000) Communist insurgency ARMM Intercept No. of observations 2 R MBN 1994 Coeff p-value -0.09 0.00 *** -0.09 0.00 *** -0.11 0.00 *** -0.02 0.48 -0.08 0.01 *** 0.08 0.05 0.17 -0.09 0.29 -0.04 -0.22 0.57 72 0.70 0.03 ** 0.19 0.01 ** 0.08 * 0.01 *** 0.08 * 0.00 *** 0.00 QLI 1999 Coeff p-value -0.05 0.08 * -0.07 0.01 ** -0.06 0.07 * -0.04 0.03 ** 0.04 0.15 0.05 0.14 0.12 -0.03 0.29 -0.02 -0.09 0.56 72 0.79 0.02 ** 0.00 *** 0.02 ** 0.30 0.05 * 0.21 0.00 *** 0.00

*significant at the 10% level; **significant at the 5% level;***significant at the 1% level ****Regressions were done in Stata 8 using the robust method, which uses Whites adjusted standard error estimates. Diagnostic tests on multicollinearity, omitted variables, and normality of residuals were made and all were passed at the 5% level.

Regression Results
Regression results show in the case of Philippine provinces Geography, infrastructure, and political factors are robustly related to multidimensional welfare levels. For policy, geographical features maybe made one basis for targeting, although a closer study must be made to trace the exact path/paths through which geographical factors are transmitted to welfare levels, and then design interventions appropriately. Infrastructure investment, good governance, and a quick and peaceful resolution to the armed conflicts must all be pursued to improve multidimensional welfare in the lagging provinces.

End