Author : Albert, Jose Ramon G.; Vizmanos, Jana Flor V.

Summary : As reflected in the Philippine Development Plan 2017-2022 and the United Nations Sustainable Development Goals, poverty reduction is at the heart of the development agenda both nationally and globally. Since the measurement of poverty is ex post, public interventions are typically directed at helping those who have been identified as poor. The government, however, must consider the dynamics of poverty in public policymaking and broaden the scope of poverty assessments. A critical dimension to poverty dynamics is vulnerability, which conceptually pertains to the risk to future poverty. Some of the poor are likely to be poor in the future; some nonpoor may also become poor if idiosyncratic and covariate risks to future poverty are not addressed. Thus, risk resilience management strategies are critical. This study continues previous work on estimating the vulnerability level of households to income poverty using a modified probit model based on income and other poverty correlates data sourced from the Family Income and Expenditure Survey, as well as the country's official poverty lines. Past model specifications are improved by including data on price and climate shocks to welfare, as well as by generating individual assessments for urban and rural areas before combining the cross-section results, rather than using a common specification nationally as done previously. The vulnerability assessment in this study provides inputs to forward-looking interventions that build the resilience of households for preventing or reducing the likelihood of future poverty. The study emphasizes the importance of using both poverty and vulnerability estimates in programs and identifies differentiated actions for those highly vulnerable and relatively vulnerable to poverty. (authors' abstract)