The recent announcement by the World Bank (WB) that the Philippines had just passed from “lower-middle income” to “upper-middle income” status was its own call, or subjective judgement, of where we stand among its four internal categories of “low,” “lower middle,” “upper middle,” and “high” income countries. Obviously, the WB has different policies for each category, i.e., the higher the category, the less concessional its financial treatment.
With so few groups, moving from Group 2 to Group 3 is quite significant. Other international development institutions, like the Asian Development Bank, the Japan International Cooperation Agency, and Australia’s Department of Foreign Affairs and Trade, which have relations to the Philippines, would take note of the WB’s classification. The subjective standards of these institutions and of the WB are not likely to differ widely.
Subjectivity of the people themselves. But how about Filipinos, in general—do they think they have gone from “lower middle” to “upper middle” with respect to income, or some other income-related standard? The subjective feelings of the people as a whole, from the bottom up, are measurable by scientific surveys done regularly over time.
In the first place, one can compare the people’s perceived present status, however defined, in successive surveys. In particular, Self-Rated Poverty—a subjective indicator of Social Weather Stations (SWS)—has been stagnant at half of all families for the past two years. On the other hand, the Not Poor have grown to over one-third, at the expense of the Borderline. The subjectivity of the survey respondents is elicited from a show card with the words Mahirap and Hindi Mahirap, separated by a line, and asking them to point to where their family is on the card. (Interviewers do not read the card orally. Respondents should have reading ability; if blind, then family members may read the card for them.) SWS has used this methodology consistently in over 140 national surveys since the mid-1980s.
The SWS surveys also report the Self-Rated Poverty Threshold (how much for home expenses—explained as excluding costs of commuting and other work-related expenses—do the Poor say they need in order not to feel that way). These thresholds in the SWS study areas are very reasonable; they express the subjectivity of the respondents, not that of SWS, in defining poverty.
In the second place, one can ask survey respondents directly for their perceived change in status from the past (say, a year ago) to the present. For some, their situation improved, for some it worsened, and for some it stayed the same. The net result, summarized by the net percentage of gainers over losers, has been negative for several quarters now, in the surveys of both SWS and the Bangko Sentral ng Pilipinas (see “BSP does surveys too,” 6/27/26).
The government’s subjectivity is embedded in its statistics about poverty. The official poverty line is periodically set by the Philippine Statistics Authority (psa.gov.ph), the successor of the National Statistical Coordination Board (NSCB), which initiated official poverty measurement with the Family Income and Expenditure Survey (FIES) of 1985 (if my memory serves). The FIES was a triennial survey then (it turned biennial in 2025, but its results are not yet ready).
The NSCB relied on the Department of Science and Technology’s Food and Nutrition Research Institute (fnri.dost.gov.ph) to design a daily food menu capable of giving a standard-sized family the calories and nutrients needed for minimum subsistence, at the least cost. The NSCB then converted the minimum food cost to a minimum required income by simply assuming a fixed 69:31 ratio of food cost to nonfood cost, i.e., it did not study nonfood needs in detail.
The change in official subjectivity. This system continued until early 2011, when NSCB abruptly reduced the poverty line. In “The lowering of the official poverty line” (2/12/2011), I wrote: “This week, the official data on poverty changed. Last Tuesday Feb. 8, the NSCB announced that the 2009 incidence of poor families is 20.9 percent, based on a new (which it calls ‘refined’) methodology. It also announced that the old methodology would have put the incidence of poor families at 26.3 percent. Thus the NSCB ‘refinements’ resulted in re-classifying 26.3 – 20.9 = 5.4 percent of all families (or about 1 million families) out of official poverty in 2009. This came from lowering the average official 2009 poverty line for a family of five to P7,017 per month with the new system, from P7,953 per month with the old system.”
The NSCB did not explain how its new menu delivered the same nutritional value at a much lower cost; it certainly delivered less satisfaction from food. In the National Capital Region, it reduced official poverty to only 0.4 percent, from 2.6 percent under its former methodology (“Is poverty gone in NCR?”, 2/19/11).
And what about employment? Is it reasonable that working for pay for one hour in the week prior to being interviewed for the Labor Force Survey is enough to be considered employed?
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mahar.mangahas@sws.org.ph.
Facts Only
* The World Bank announced the Philippines passed from "lower-middle income" to "upper-middle income."
* International development institutions like the Asian Development Bank and Australia’s Department of Foreign Affairs and Trade would note the World Bank's classification.
* Self-Rated Poverty, as measured by Social Weather Stations (SWS), has been stagnant at half of all families for the past two years.
* The Not Poor group has grown to over one-third, at the expense of the Borderline group.
* SWS methodology uses a show card with "Mahirap" and "Hindi Mahirap" options for status assessment in surveys conducted since the mid-1980s.
* Self-Rated Poverty Thresholds in SWS study areas reflect respondent subjectivity regarding necessary home expenses, excluding commuting costs.
* Surveys of SWS and the Bangko Sentral ng Pilipinas indicated a negative net percentage of gainers over losers for perceived status change over several quarters.
* The official poverty line is set by the Philippine Statistics Authority (PSA).
* The FIES, used for poverty measurement, was a triennial survey until 2025.
* The National Statistical Coordination Board (NSCB) used the Food and Nutrition Research Institute’s data to derive income from minimum subsistence food costs, assuming a fixed 69:31 ratio of food cost to nonfood cost.
* In 2011, the NSCB reduced the poverty line based on a new methodology, reclassifying approximately 5.4 percent of families out of official poverty by lowering the monthly threshold from P7,953 to P7,017 for a family of five in the National Capital Region.
Executive Summary
The World Bank classified the Philippines as moving from "lower-middle income" to "upper-middle income," which was presented as a subjective judgment of its standing among four internal categories. Other international development institutions, such as the Asian Development Bank and Australia’s Department of Foreign Affairs and Trade, would likely align with the World Bank's classification, suggesting shared standards regarding financial treatment based on these groupings.
The text examines the subjectivity in measuring income changes through various methods. Surveys using Social Weather Stations (SWS) track perceived status, with Self-Rated Poverty showing stagnation for two years while the Not Poor group grew, and the Self-Rated Poverty Thresholds are defined by respondents' perceptions of necessary home expenses. A review of survey responses regarding status change from the past indicated a negative net result for many, summarized by percentage gainers over losers, which was negative in recent quarters across SWS and Bangko Sentral ng Pilipinas surveys.
The government’s statistics on poverty are also subject to subjectivity, as the official poverty line is set by the Philippine Statistics Authority (PSA). The methodology for calculating this line relied on historical data from the Family Income and Expenditure Survey (FIES), which used assumptions about food-to-nonfood cost ratios rather than detailed study of nonfood needs. A change in the official poverty line in 2011 involved a refinement of methodology that reclassified a specific percentage of families out of poverty by lowering the official threshold. The text also raises questions about the definition of employment, noting that working for one hour before an interview could count as employment, and touches upon how cost-saving measures implemented by the government resulted in reduced satisfaction with food provision.
Full Take
The discussion pivots on where the locus of reality resides when measuring socioeconomic status: in institutional classification, subjective public perception, and official statistical constructs. The argument challenges the notion of an objective income reality by foregrounding how systems—whether international bodies, localized surveys, or national statistics—imbue numbers with built-in subjectivity.
A significant pattern observed is the layering of subjective measurement. The World Bank’s classification sets a macro standard, which other institutions align with, yet the lived experience of Filipinos, measured via SWS, diverges from these institutional metrics. This creates tension between externally defined categories and internally felt realities.
The shift in official poverty line reflects a systemic move toward redefining what constitutes deprivation, achieved through methodological refinement that resulted in a tangible statistical change. The implication is that objectivity in policy setting relies entirely on the initial parameters chosen by those in authority—whether they are international bodies or national statistical agencies. Furthermore, the final questions about employment and the nutritional impact of cost-cutting suggest an unaddressed concern: when official metrics are adjusted for efficiency (e.g., lower food costs), the subjective quality of life and basic satisfaction for the populace is implicitly subordinated to the mathematical adjustment. The pattern suggests that political or administrative choices embedded within statistical frameworks are powerful mechanisms for shaping perceived reality, often without explicit acknowledgment of the human cost borne by those outside the formal calculation.
Bridge Questions: If objective metrics consistently reflect only institutional preferences, what moral responsibility do institutions bear when their redefined standards lead to tangible negative consequences for subjective well-being? How can systemic changes in definitions—like poverty thresholds or employment status—be subjected to public validation beyond the immediate statistical adjustment? What mechanisms exist to ensure that necessary efficiency measures do not erode foundational human needs?
Sentinel — Human
The text skillfully uses official economic data and community-level surveys to dissect the gap between state-defined income status and the subjective experience of poverty among Filipinos, relying on specific contextual details to build an argument.