'Low income but not poor'? Senators ask NEDA to craft unified economic classification system

Several senators on Thursday asked the National Economic and Development Authority (NEDA) and its attached agencies to come up with a unified economic classification system that would help policymakers better target the beneficiaries of government programs, especially amid the COVID-19 pandemic.

During the budget hearing for NEDA's P11.17-billion budget for next year, finance committee chairperson Sonny Angara asked if NEDA chief Karl Kendrick Chua was also informed of the Department of Social Welfare and Development's projection that poor households in the country could increase to 20 million next year.

The ensuing discussion, however, delved into the technical terms being used.

"There are [total] 26 million families as of the latest projections. Out of the 26 million, 18 million are low-income — low-income meaning below the minimum wage of their region but not necessarily poor because the government defines the poor as those below the poverty threshold," Chua said.

National Statistician Claire Dennis Mapa said there are officially three million poor families in the Philippines, equivalent to 17.67 million individuals.

He said that based on the 2018 poverty threshold, an individual who earns below P25,800 for the whole year is considered poor, and a family of five earning below P126,000 per year is also poor.

Angara then asked why there are 4.4 million Filipino families receiving the conditional cash aid under the Pantawid Pamilyang Pilipino Program (4Ps) when the number of actual poor is lower.

Chua explained that the others were "near poor" and are receiving assistance because they are considered vulnerable.

The Philippine Institute for Development Studies, an attached agency of NEDA, said it was able to classify the non-poor Filipino families in 2018. The breakdown of the six groups are as follows with the corresponding monthly family income:

• 8.4 million low income but not poor - P10,957-P21,914
• 7.6 million lower middle income - P21,914-P43,828
• 3.1 million middle middle income - P43,828-P76,699
• 1.2 million upper middle income - P76,699-P131,484
• 358,000 upper income but not rich - P131,484-P219,840
• 143,000 rich - at least P219,840

"We will come up with mas madaling maintindihan na grouping, na names, but basically the intent is really to be able to disaggregate the non-poor," PIDS President Celia Reyes said.

Chua also committed to address the confusion caused by the different classifications.

"The main concern is we do not have an official definition of all these kaya if we have certain programs and research iba-iba. So what I will do, I will discuss in the PSA (Philippine Statistics Authority) board all these to see if we can come up with something official so moving forward the definition will be consistent," Chua told senators.

Senate leaders are still studying if there is a need to increase the budget for 4Ps because of the economic impact of COVID-19. —KBK, GMA News