Lies, damn lies and statistics

Mark Twain once said, "There are three kinds of lies: lies, damned lies and statistics." The Philippine Statistics Authority (PSA) recently reported a significant drop in poverty rates, from 15.5 percent in 2023 to 9.7 percent in 2025. However, this claim may not be as impressive as it seems. The PSA's new poverty threshold of P4,634 monthly for a family of five is considered too low, especially for a country now classified as upper middle-income.

This may have resulted in an underestimation of the true poverty rate. Furthermore, the methodology used by the PSA remains outdated, with the last review taking place in 2021. Dr. Jose Ramon "Toots" Albert, a former chief statistician of the Philippines, has expressed concerns about the current poverty line and its inadequacy. The SWS self-rated poverty survey suggests that 59 percent of Filipinos are below the World Bank's $8.30 daily threshold, indicating a much higher poverty rate.

The discrepancy between official and self-reported poverty rates underscores the need for a more accurate and updated poverty assessment. Additionally, the so-called "historic decline" may be misleading, as it may not reflect genuine improvements in living standards. The real household income per capita has only risen by about seven percent over eight years, while GDP per capita has increased by 24 percent.

This illustrates that poverty reduction has been driven by structural weaknesses rather than robust economic growth. Furthermore, the poverty rate varies significantly across regions, with ten regions experiencing higher poverty rates than in previous years. The government's premature victory lap in celebrating the "historic decline" could further erode its credibility.