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Purchasing power may trigger hike of poverty threshold

DAVAO DEL NORTE  — The purchasing power of consumers may trigger an increase in the Annual Per Capita Poverty Threshold of a certain locality,  Philippine Statistics Authority (PSA) Regional Director Ruben D. Abaro Jr said.

In a special edition of Kapihan sa Kapitolyo, he cited as an example  a  consumer picking her choices  of food. She picks  the pricey 1-6-0 rice variety over other cheaper rice varieties and chooses sayote of a higher price than the ordinary green papaya for her tinolang manok.

Abaro likened such consumer preferences of the people in Davao del Norte which posted the highest Annual Per Capita Poverty Threshold in 2015 among the provinces in Mindanao.

The 2015 Family Income and Expenditure Survey (FIES) released by PSA in October 2016 shows that Davao del Norte posted P24,424 annual poverty threshold which was an increase of more than P3,000 from P20,841 in 2012.

Abaro took time explaining the figure  in response to calls of the Provincial Government of Davao del Norte for better public understanding why the province ranked among the “40 poorest provinces” based on Annual Per  Capita Poverty Threshold.

Poverty threshold defined

If one’s annual income falls below the poverty threshold, one is considered as relatively poor, and if it goes higher than the poverty line, one is relatively non-poor.   

Per PSA definition, Annual Per Capita Poverty Threshold means “the minimum income/expenditure required for a family/individual to meet the basic food and non-food requirements” in a year.

According to the PSA basic non-food requirements to involve expenditures for ”clothing and footwear,  housing;  fuel, light, water; maintenance and minor repairs; rental of occupied dwelling units; medical care; education; transportation and communication; non-durable furnishings; household operations; and personal care & effects”.

In conducting FIES survey, the enumerator  determines the food and non-food expenditures of respondents, and then another round of interview is conducted to know the sources of income,  Abaro explained.

Dabaonons can afford

Meanwhile, Abaro noted that  the presence of food chains, restaurants, hotels, malls and other business establishments in Davao del Norte had made readily available some consumer goods.

Having the relative capacity to buy, Dabaonons showed preferences for higher priced goods over the indigenous one of lower costs, consequently pushing the poverty threshold of the province, Abaro noted.

He also noted the urbanization of Davao del Norte with three cities of Tagum, Panabo and the Island Garden City of Samal as a factor that pushed higher the poverty threshold  of the province.

However,  Abaro said that his observations regarding relative economic factors noted to have triggered the poverty threshold  to increase, “needs further  study” as his office only deals with statistics.

Coefficient of Variation

On the other hand,  Abaro  revealed that the poverty incidence statistics of Davao del Norte “may not be  that precise ”because the coefficient of variation is more than 20%.”

“The lower the value of coefficient of variation, the more precise the estimate is,” he explained.

With a coefficient variation of 24.8 percent, the 2015 Poverty Incidence figure of Davao del Norte “may fall within the range of 15.5% to 36%.”

“We are not too sure where is it falling but the point estimate is at 26.1 (percent),” he said referring to the rate poverty incidence of Davao del Norte based on the 2015 FIES.

He attributed this wide range of estimate to the small sample size of only 400 respondent-Dabaonons when FIES was conducted in 2015.

But he was sure that the 2018 poverty statistics of Davao del Norte would become more precise as   the survey sample size of the province  was raised to 2,000.

“The bigger the sample size the better the result,” he  said while putting emphasis on provinces with footnotes indicated in the 2015 FIES.

“These are explanations and warning to users (in interpreting the data),” he said. 

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