THE government needs to distinguish between chronic poverty and poverty caused by temporary shocks to better target social protection programs, according to a former Philippine Institute for Development Studies (PIDS) president.
Former PIDS President Celia M. Reyes said poor households should not be treated as a single group because their circumstances and the interventions they need can differ significantly.
‘You need to be able to identify who are the chronic poor and transient poor to be able to deliver the most effective intervention,’ Reyes said in a recent hybrid webinar conducted by the De La Salle University-Angelo King Institute for Economic and Business Studies.
The chronic poor, she said, are those who remain poor over a long period, while the transient poor are households that move in and out of poverty because of shocks.
These could include natural disasters such as typhoons, as well as economic shocks such as increases in fuel prices.
Reyes cited a 2011 PIDS study that used panel data from the 2003, 2006 and 2009 rounds of the Family Income and Expenditure Survey to track households’ poverty status over time.
The study showed that households do not necessarily remain poor or non-poor across periods. Some households moved out of poverty, while others who had previously been non-poor fell into poverty later.
Reyes noted that around half of those classified as poor in 2009 were transient poor, having been non-poor in an earlier period.
‘Sometimes we’re treating them as a homogeneous group but actually, they are not. The chronic and the transient poor would be different kinds of intervention,’ she said.
This distinction is particularly important in designing social protection programs, Reyes said.
She noted that temporary assistance, such as cash aid, may help households cope with short-term shocks and return to their usual livelihoods once conditions improve.
Chronically poor households, meanwhile, require longer-term ‘structural programs’ that address the underlying causes of their poverty.
Risk assessment
The former PIDS chief also warned that being below the official poverty threshold does not necessarily mean a household is the one most exposed to a particular shock.
For instance, geopolitical tensions in the Middle East could affect overseas Filipino workers and their families, even if they are not currently classified as poor.
‘It’s very important for policy makers to be able to do what we call social protection risk assessment to identify who is at risk of falling into poverty due to specific shocks,’ she added.
Reyes said the Community-Based Monitoring System (CBMS) could help fill this gap by providing household- and individual-level data that can be used to identify and locate poor families and determine the interventions they need.