Notes on the Official Poverty Statistics in the
1. Family- a group of persons usually living together and composed of the head and other persons related to the head by blood, marriage or adoption. A single person living alone is considered as a separate family. (2000 FIES, National Statistics Office (NSO))
2. Household, on the other hand, refers to an aggregate of persons, generally but not necessarily bound by ties of kinship, who live together under the same roof and eat together or share in common the household food. Members comprise the head of the household, relatives living with him/her and other persons who share the community life for reasons of work or other consideration. A person who lives alone is also considered a separate household. (Integrated Survey of Households Bulletin, Series 99, NSO)
The following are the different types of households captured in the FIES:
2.1. Single family - refers to the household composed of a single nuclear family. (A nuclear family is composed of a father and mother with unmarried children or a parent with children). For purposes of the survey, a single person household is considered as a single family. Also considered are unmarried sisters and brothers who are living together as one household. The presence of a boarder and domestic helper will not change the household type. (2000 FIES, NSO)
2.2 Extended family - refers to the household composed of a nuclear family as defined above together with relatives like son-in-law, daughter-in-law, grandson, granddaughter, father, mother and other relatives. (2000 FIES, NSO)
2.3 Two or more non-related members - refers to a household with two or more non-related families or two or more persons not related to each other by blood, marriage or adoption. (2000 FIES, NSO)
Overseas contract workers (OCWs) are excluded from the count of family members in the FIES (but OCWs are included as household members in the Census of Population). (2000 FIES Enumerator’s Manual) This means that the per capita expenditure under the FIES is based on the actual number of household members who share in the consumption of the items bought. However, income of OCWs is included in the family income, which could lead to an overestimation of per capita income under the FIES. The OCWs are excluded from the FIES because the FIES aims to estimate the normal consumption of a family. In the CPH, the OCWs are included because the CPH is conducted based on the de jure criterion, which is the USUAL PLACE OF RESIDENCE.
In case the sample household is composed of two or more families not related by blood, marriage or adoption (see 1.3), only the family of the household head is included in the reporting of demographic characteristics and family transactions in the FIES. (2000 FIES Enumerator’s Manual)
If the household is composed of unrelated members (see 1.3), for example, a group of students living together, only the household head is considered to be included in the survey. (2000 FIES Enumerator’s Manual)
- Thus, the statistical unit of the FIES is the family – the FIES captures the income and expenditures of only one family per household, that of the family of the household head.
3. Family Income – includes primary income and receipts from other sources received by all family members during the calendar year, as participants in any economic activity or as recipients of transfers, pensions, grants, etc. (2000 FIES, NSO)
Primary income includes:
Income from other sources includes:
Cash received out of salaries/wages and other sources of income of a family member who is a contract worker abroad and also cash receipts sent by a family member of the HH with a status of residency abroad other than that of a contract worker are included (2000 FIES Enumerator’s Manual, NSO)
Royalties and dividends from investments are also included (2000 FIES Enumerator’s Manual, NSO)
A family sustenance activity is also a family activity but unlike an entrepreneurial activity, the produce from the former is mainly for home consumption. Occasionally, sales are made when the harvest/produce is more than enough for family consumption. (2000 FIES, NSO)
Income is imputed for own-produced goods for family consumption
Receipts that are not considered as family income are those which do not come from earnings, property income and gifts received by the family. Examples are loans borrowed from the bank or from other sources, withdrawal from savings account, cash surrender value of insurance, sale of real or personal properties (gains realized from the sale, however, is considered as income), payments received from loans granted to others, inheritance, profits from sale of stocks and bonds and net winnings from gambling and sweepstakes (2000 FIES Enumerator’s Manual).
4. Family Expenditures – refer to the expenses or disbursements made by the family purely for personal consumption during the calendar year. They exclude all expenses in relation to farm or business operations, investment ventures, purchase of real property and other disbursements, which do not involve personal consumption.
Gifts, support, assistance or relief in goods and services received by the family from friends, relatives and imputed rent of owner-occupied dwelling unit are included. Value consumed from net share of crops, fruits and vegetables produced or livestock raised by other households, family sustenance and entrepreneurial activities are also included. (2000 FIES, NSO)
Consistent with the treatment of family income, expenditure is imputed for own-produced goods consumed by the family.
Total value of all items of consumption/expenditure bought on credit during the reference period as well as services availed of within the same period that have not been fully paid at the time of visit are included.(2000 FIES Enumerator’s Manual, NSO)
Cash and in kind payments made during the period for items bought on credit prior to the reference period. (2000 FIES Enumerator’s Manual)
The imputed value of goods/services received as fringe benefits from employer or part of the salaries/wages of employed family members are also included in the expenditures of families (2000 FIES Enumerator’s Manual)
Total expenditures for the whole year are estimated from the expenditures captured during the reference period; e.g. when the reference period is the past week, expenditures for the week are multiplied by 26 weeks to account for the semester’s expenditure. Thus, the total expenditure for the year for the particular expenditure item would just be the sum of the expenditures for the first and second semesters.
5. Total Food Expenditures – actual food consumption (not expenditure, i.e. food bought but not consumed is excluded) of the family during the past week of the interview, including the consumption of domestic helpers and other persons employed by the family to do odd jobs around the house, and family guests (relatives or non-relatives who are not members of the household but had stayed with or visited the family for less than a week within the past week). The consumption of boarders and other persons in the same household not related to the family is excluded from this category. (2000 FIES, NSO)
6. Total Basic Expenditures (TBE) - is an aggregate of expenditures on food; clothing and footwear; fuel; light and water; housing maintenance and other minor repairs; rental or occupied dwelling units; medical care; education; transportation and communications; non-durable furnishing; household operations and personal care and effects. (1997 Philippine Poverty Statistics, NSCB).
Excluded from the TBE are the following expenditures captured by the FIES: alcoholic beverages, tobacco, recreation, durable furniture and equipment and miscellaneous expenditures.
7. Recommended Dietary Allowances (RDA) – are levels of nutrient intakes, which are considered adequate to maintain health and provide reasonable levels of reserves in body tissues of nearly all healthy persons in the population. (RDA, 1989 edition)
8. Food Threshold (FT) – refers to the cost of the food required to satisfy nutritional requirements for economically necessary and socially desirable physical activities. The nutritional requirements are determined by the Food and Nutrition Research Institute of the Department of Science and Technology. Currently, these are based on 100% adequacy for the Recommended Dietary Allowances for protein and energy equivalent to an average of 2000 kilocalories per capita, and 80% adequacy for the other nutrients.
(See Annex 2003-1-1 [ 138KB] for details of the requirements by region, with urban-rural disaggregation) (1997 Philippine Poverty Statistics, NSCB)
The Food Threshold is computed for each province with urban-rural disaggregation (the details are found in Section IV.D of these Notes)
9. Subsistence Incidence (S) – refers to the proportion of families (or population) with per capita income less than the per capita food threshold to the total number of families (population). (1997 Philippine Poverty Statistics, NSCB)
10. Poverty Threshold (P) or Poverty Line – refers to the cost of the basic food and non-food requirements (valued in peso). The basic non-food requirements cover the non-food expenditure items of the Total Basic Expenditures. In the Philippine official methodology, the poverty line may be viewed as the minimum income required to meet the food requirements and other non-food basic needs. (1997 Philippine Poverty Statistics, NSCB)
11. Poverty Incidence (P) – refers to the proportion of families ( or population) with per capita income less than the per capita poverty threshold to the total number of families (population). (1997 Philippine Poverty Statistics, NSCB)
12. Income Gap (I) – refers to the average income shortfall (expressed in proportion to the poverty line) of families with income below the poverty threshold (1997 Philippine Poverty Statistics, NSCB)
13. Poverty Gap (PG) – is the total income shortfall (expressed in proportion to the poverty line) of families with income below the poverty threshold, divided by the total number of families (1997 Philippine Poverty Statistics, NSCB).
The difference between the income gap and the poverty gap is the use of number of poor families as denominator for the income gap. For the poverty gap, the total number of families is used. Both the income gap and the poverty gap are measures of the depth of poverty.
14. Severity of Poverty (SP) – is the total of the squared income shortfall (expressed in proportion to the poverty line) of families with income below the poverty threshold, divided by the total number of families. This is equal to the Foster-Greer-Thorbecke (FGT) family of measures with a= 2. It is a poverty measure which is sensitive to the income distribution among the poor – the worse this distribution is, the more severe poverty is.
15. Gini Ratio - the ratio of the area between the Lorenz curve and the diagonal (the line of perfect equality) to the area below the diagonal. It is a measure of the inequality in income distribution, with limits 0 for perfect equality and 1 for perfect inequality.