The Asian Poverty line, also referred to as “the new benchmark”, is approximately $1.35 a day. It is estimated that 25.4 million Filipinos are living below this standard of living, reflecting the estimation of poverty in Asia and the Pacific region.
In comparison to the Philippines’s neighbors countries its 29.5 percent poverty is lower than India, Bangladesh, and Cambodia, but higher than Pakistan, Indonesia, Vietnam and Sri Lanka.
Economists have often used a bench mark to determine the purchasing power of people in developing countries. The $1.35 benchmark was calculated by the PPP, Purchasing Power Parity, which compares the prices of selected products in other countries. This poverty line is used to illustrate peculiarities of consumption patterns of the poor in Asia.
In the Philippines, the poor, which consists of 30 percent of the population, generally spend about 60 percent of their income on food and nonalcoholic beverages. Therefore the goods that the poor are consuming reflect poor purchase patterns. The PPP will not give higher weights for these good, which ultimately causes an increase in poverty.
The ADB, Asian Development Bank, computes these calculations in reports that monitor where the poor shop, what and how frequently they buy, and the quality of these products. An example they illustrated was the noticeable difference between the quality and price between packaged rice, rice in a super market and “rice bought by the scoop in a wet market, which is where the poor traditionally shop”.
According to this new method the PPP has added 6.26 million more poor Filipinos to the previous estimation of 23.24 million which was based on the PPP’s traditional computation.
http://www.abs-cbnnews.com/storypage.aspx?StoryId=129505
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