Issue# 9

500

500

Lei Landicho

NEARLY THERE: SOCIAL PROTECTION FOR THE NEAR POOR

ore than 26 million Filipinos are poor, 12 million of them extremely so. We know much about them because policymakers, statisticians, and the media have frequently featured, analyzed, and reported on them. But there is another quite larger segment of the population that has escaped attention – the near poor. The near poor are like invisible creatures that inhabit the limbo between the more vibrant hues of the Philippines’ social spectrum. They are not exactly poor, but they are hardly middle class. They are too “well-off” to be included in government programs but are too vulnerable to be considered non-poor.

Based on Family Income and Expenditure Survey 2012 data, near poor households account for 10.88% of the total number of households in the country. What distinguishes them from the poor is that they have assets and skills that allow them to earn income to provide for their basic needs but illnesses, natural disasters, and other risks almost always pull them below the poverty line. The 1.2% increase in poverty incidence in 2014 was partly due to high food prices and super typhoon Yolanda’s aftermath. These risks constantly threaten the lives and livelihood of poor and near poor alike.

From 2013's 24.6% poverty incidence, poverty incidence in 2014 increased to 25.8%. Source: 2014 First Semester Annual Poverty Indicator Survey (APIS); Computation: NAPC.

1

Poverty Line

1

Near-

Poor

1

Near-Poor10.88%

Rest of the HouseholdPopulation

NEARLY THERE: SOCIAL PROTECTION FOR THE NEAR POOR

The Department of Social Welfare and Development has recently adopted a computation of a Near Poverty Threshold (NPT) which will be used for estimating the “level of household income that implies a risk of (falling into) subsequent poverty of at least 50%.” The computation will now be included in the Listahan: Talaan ng Pamilyang Nangangailangan, a system database used for assessing a family’s eligibility for government poverty reduction programs, identifying those who have a high risk of falling into poverty, and consequently, targetting them for social protection programs.

We recommend a few policy changes that will work for near poor.

Building construc�on laborers

Fishery laborers and helpers

Farmhands and laborers

Market and sidewalk stall vendors

Car, taxi, and van drivers

Motorcycle drivers

Carpenter and joiners

Inland and coastal waters fishermen

Coconut farmers

Vegetable farmers

Corn farmers

Rice farmers

General managers/managing proprietors in transporta�on, storage and...

General managers/managing proprietors in wholesale and retail trade

50,000 100,000 150,000 200,000 250,000 300,000

General managers/managing proprietors manufacturing

Jobs of Head of Near-Poor Households

Who are the near poor? Primary occupation of the head of a near –poor household

Source: FIES-LFS 2012 Computation: NAPC

Listahan: Talaan ng Pamilyang

Nangangailangan

2

NEARLY THERE: SOCIAL PROTECTION FOR THE NEAR POOR

Government policies on social protection must be updated to address new needs. House Bill No. 4765 or “An Act Providing for Enhanced Social Protection for the Working Poor and the Near Poor and Providing for the Fund Therefore” introduced by Pampanga 3rd District Rep. Oscar S. Rodriguez is in the pipeline but still needs some work. In a nutshell, the proposed law seeks to provide working poor and near poor Filipinos continuous social security coverage as provided by the Social Security System (SSS).

The government shall provide a counterpart contribution to subsidize a portion of the working poor’s and near poor’s monthly contribution to SSS. The bill entitles self-employed workers earning a monthly income of at least P2,250.00 but less than P5,250.00 to a government counterpart provision for every valid monthly contribution to SSS as registered members.

Social Protection

3

NEARLY THERE: SOCIAL PROTECTION FOR THE NEAR POOR

But here’s the rub, HB 4765 defines social protection as “programs of the government aimed to protect workers against contingencies resulting in loss of income or financial burden.” This definition covers only social insurance, which is just one of the pillars of social protection.

As far back as 2007, series of consultations with government agencies, development organizations, and other stakeholders resulted in recommendations being presented to the NEDA-Social Development Committee (SDC) Technical Board and subsequently to the SDC Cabinet Level which issued NEDA-SDC Resolution No. 1, series of 2007 entitled “Adopting a Philippine Definition of Social Protection." It is as follows:

“Policies and programs that seek to reduce poverty and vulnerability to risks and enhance the social status and rights of the marginalized by promoting and protecting livelihood and employment, protecting against hazards and sudden loss of income, and improving the people’s capacity to manage risks.”

From The Philippine Social Protection Framework and Strategy: An Overview by Florita R. Villar, Undersecretary, thDepartment of Social Work and Development presented at the 12 National Convention on Statistics in October 2013

2

Going by this landmark definition will expand the rationale of the bill to fully and firmly place the working poor and near poor within the ambit of our government’s social protection. To embody the essence of social protection, the bill may also include policies for labor market interventions, social welfare, and social safety nets.

2

4

Social Security

NEARLY THERE: SOCIAL PROTECTION FOR THE NEAR POOR

The bill also stipulates that workers who are unable to pay contributions for three months will be suspended. As one of the issues of the near poor that the bill seeks to address is their lack of “full financial capacity” to pay their contributions, perhaps the grace period can be extended to six months. Members unable to contribute for three months can also be offered unemployment insurance, or an extension of benefits for three more months. This mechanism would provide the self-employed near-poor with sufficient time and ample opportunity to search for jobs with higher levels of productivity in order to lower their risk of future unemployment.

We also recommend that the definition of near poor as those with income 20% above the poverty line be revised. Perhaps the authors of the bill can reconsider their income-based definition and go instead with DSWD’s computation. The “20% above the poverty line” definition is too broad that it encompasses households that may not need social protection interventions. DSWD’s definition shall serve to cost-effectively target the near poor that has 50% risk of falling into subsequent poverty.

5

20% above the poverty line

higher levels of productivity

NEARLY THERE: SOCIAL PROTECTION FOR THE NEAR POOR

In addition, enlistment and registration process necessary for the categorization and validation of the members’ status as near poor or self-employed non-poor have to be institutionalized. Currently, there is a lack of a comprehensive database for determining the near poor and the self-employed. In Republic Act No. 8282 or Social Security Act of 1997, the self-employed are required to provide information (name, age, civil status, occupation, average monthly net income and dependents) as part of their membership.

An additional provision on the membership process – to be handled by SSS or jointly by Employees' Compensation Commission, Philippine Health Insurance Corporation (PhilHealth), and Pag-IBIG could be added. Once the near poor and the self-employed non-poor are properly documented, it will be easier to provide them interventions adapted to their needs.

As government attempts to eradicate poverty, its programs and policies should include those who have high risk of becoming poor. Social assistance should be given before they fall below the poverty threshold.

About the Author:

Lei Landicho is a staff of the Policy, Monitoring and Social Technology Service Unit (PMSTS) of NAPC. She is a graduate of Communication at the University of the Philippines, Baguio. She is an advocate of evidence-based research on disaster risk reduction and climate justice. She also writes movie reviews for Cinetactic on cinetactic.com.

6

NAPC.ph NAPC_ph

NATIONAL ANTI-POVERTY COMMISSION

Water System Training CenterMWSS-LWUA Compound

Katipunan Avenue, Quezon City 1105

Trunklines: 426-5028 / 426-5019 / 426-4956 / 426-5144Fax: 423-41235

Website: www.napc.gov.ph