Inquirer Headlines: Nation

A World with Extreme Poverty is a World of Insecurity.

Thursday, October 11, 2007

Poorest Pinoys spendng MORE, earning LESS

By Cai U. Ordinario
Reporter/Business Mirror/October 10

HIGHER prices have taken their toll on the poor. The poorest families are now spending more and earning less, according to the latest preliminary results of the 2006 Family Income and Expenditure Survey (FIES) released by the National Statistics Office (NSO) Tuesday.

The FIES showed that poor families, or those belonging to the bottom 30-percent income group, spent P153,000 last year but only earned P148,000.

While these figures are higher than the P125,000-worth income and P128,000-worth expenditures in 2003, the difference is higher in 2006 at P5,000 a year than in 2003’s P3,000 a year.

The NSO said for every P100 spent by these economic sectors in 2006, P59 went to food, compared with only P48 in 2003. Consequently, there was a decrease in the share of other expenditure items like rent, which dropped to 9 percent from 12.7 percent.

Macroeconomically, the upper 70 percent earned P2.73 trillion and spent P2.3 trillion for a savings of P437 billion in 2006 compared with the
bottom 30 percent that earned P258 billion and spent P267 billion, or a deficit of P9 billion.

The Gini coefficient measured in the FIES was estimated at 0.4564 in 2006, slightly lower than the 2003 ratio of 0.4605 .

The Gini coefficient provides a measure of income inequality within a population and ranges from 0 to 1, with 0 indicating perfect income equality among families, and 1 indicating absolute income inequality.

The good news, if good news it is, is that, “the share to the total income of families belonging to the 10th decile exhibited a slight decrease, from 36.3 percent in 2003 to 35.9 percent in 2006. The gap in family income between the families belonging to the 10th decile and those in the first decile had narrowed slightly.”

The FIES is a nationwide survey of households undertaken every three years by the NSO. It is the main source of data on family income and expenditure, which include among others, levels of consumption by item of expenditure as well as sources of income in cash and in kind.

The number of households, or families, for the 2006 FIES was estimated using the 2000 Census of Population and Housing (CPH)-based population projections and information from the 2000 CPH on the average household size by province.