Who are the Middle Class in the Philippines?

Recently, Raffy Tulfo, an incoming Philippine senator, drew flak over his statement on government subsidy, nixing the middle class in the country from receiving government aid amid the rising prices of oil and basic commodities. 

He insisted that the middle class can still handle the impact of inflation since they have higher salaries. 

"They can still afford to buy their needs", the former TV broadcast journalist was quoted as saying. "They receive at least above minimum wage. So let's help those earning the minimum wages or lower".

His statement drew anger from the public. Netizens argued that people in the middle class also suffered from the onslaught of the pandemic and many have lost their jobs and source of income. 

They are the heavily taxed wage earners in the country and yet received less or nothing from the government during the lockdown.

This raises the question: Who are the middle class in the Philippines? 

The Middle Class in the Philippines

Basically, the middle-class population is also known as the working class. It's a socioeconomic group between the rich and the poor and is made up of individuals who are capable of living the life they want due to the size of their resources or income. And can afford to spend without compromising their basic needs.  

But their role in the economic performance and status of the country is crucial. If a country lacks high-paying jobs, the middle-class population will experience instability. And because they are the working-class population, if employment is unstable or if there are changes in the company's policy (no salary increase, lay-offs due to sharp decline in revenues, cut off of benefits, etc), the bulk of the middle-class population will heavily suffer.   

According to iMoney.ph article by Marc Adrian, "setting the middle class apart from the extreme ends of the social spectrum can sometimes cause misconceptions. That’s why oftentimes, the upper-middle class is easily associated with the rich while the lower-middle-class individuals mistook themselves for the poor.” 

Thus, we hear complaints from the public that they also suffer from the economic instability of the country due to the oil hike and sharp increase in basic commodity prices. This is because the income of the middle-class population is largely dependent on the salary.

The middle class also has a big spending power which largely contributed to the GDP (gross domestic product). The majority of the spending consumer belongs to the middle class, and so they make the economy move. Their spending power can change the country's economic performance.  

If individuals in the middle class suffer, the economy will also suffer as the spending power changes when income tumbles. In other words, the middle class also suffers amid the rising prices of commodities.

The latest Family Income and Expenditure Survey conducted by PSA or the Philippine Statistics Authority shows that 58.4% of Filipinos belong to the low-income class, while 40% of the population comprises the middle class. 

However, the low-income class has a bigger share of the population because they tend to have larger families than other social classes, according to the Philippine Institute for Development Studies (PIDS), the government’s socio-economic policy think tank.

So, are you in the middle class?

According to the data released by PIDS in 2020, for you to be classified in the middle-class group, your household monthly income should be between ₱43,828 to ₱76,669. 

Take note that the average household income is how PDIS determines the socioeconomic standing of the population. Here's how to illustrate it:

1. In the household of couples with only them are working::
35,000 + Wife 30,000 = 65,000/2 = 32,500 - monthly average income - classification: Lower middle class

2. However, if hubby has a higher salary:
 60,000 + Wife  30,000 = 90,000/2 =  45,000 - monthly average income - classification: Middle class

3. If there are several earners in your household, for instance, 3 family members. This changes your average monthly income: Husband 60,000 + Wife 30,000 + family member 1 25,0000 + family member 2 20,000 + family member 3 25,000 = 160,000/5 = 32,000 (monthly average household income), classification: Lower middle class

If you’re single or the sole earner in your household, your income is the sole basis of your socioeconomic classification. However, this benchmark is not permanent, it increases depending on the country's economy and inflation.

Below is the data released by the Philippine Institute for Development Studies (PIDS) in 2020. The income classes for an average household of five (the first column is income classification and the second column is the monthly income):

1. Rich - at least ₱219,140 and up
2. High income (but not rich) - between 131,484 to 219,140
3. Upper middle class - between 76,669 to 131,484
4. Middle class - between 43,828 to 76,669
5. Lower middle class - between 21,194 to 43,828
6. Low income (but not poor) - between 10,957 to 21,194
7. Poor - less than 10,957

In a more sensible explanation, monthly income is not the only factor in determining the socioeconomic standing of the population, the expenditure of the household - the ratio of the overall household expenses to the monthly income - can affect the economic situation of the population. 

The Philippine Statistics Authority classified the monthly expenditure of the family or individuals into the following: 

  1. Food
  2. Rent of space/dwellings
  3. Transportation and communication
  4. Fuel/light/water
  5. Taxes
  6. Education (for couples with children)
  7. Personal care
  8. Others (monthly insurance premium, investment etcetera)

Your total monthly gross income deducted from the above expenses is your monthly net income. And if the amount of your net income can still afford you the lifestyle you choose and afford you to live the kind of life you want, take a vacation, go somewhere, buy the stuff you want, and still have a comfortable amount to save, then according to PDIS data, you can be classified as part of the middle-class population.

The debate still persists - is it fair that the middle class in the Philippines be excluded from the government subsidy during the economic crisis?

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