The PIDS last year released an income classification Philippines bracket that classifies households into three social classes. Families are categorized as poor or rich based on their monthly income. Here is what you need to know about this classification.

What many people are wondering now is about the country's middle class. So here let's take a look at who they are and their lifestyle with Corner4men.

Income Classification In The Philippines

As of 2018, families who earned less than P10,957 were classified as poor while those with monthly income between P10,957 and P21,914 belong to the low-income bracket.

Households that make between P21,914 and P43,828 are lower-middle and those the earn up to P76,66 per month is classified as middle. When their earning is all the way up to P131,484, families are in the upper-middle bracket.

 

 

 

Those with up to P219,140 per month belong to the upper middle class but not rich. The rich category contains households with more than P219,140 per month.

After senators remarked that the terms used were confusing, Karl Chua - Socioeconomic Planning Secretary urged the government to improve income classification Philippines as well as definitions and terms.

According to the PIDS, the Philippines has approximately 8.4 million families with low incomes and 7.5 million in the lower-income bracket as of 2018.

 

 

The middle and upper-middle account for 4.3 families while the upper but not rich has around 358,000. On top of the chart, 143,000 families in the country are classified as rich.

Defining Filipino Middle Class?

According to the PIDS, as of 2018, 4 out of 10 families in the Philippines belong to the middle income class.

A recent study defines middle class as families of five earnings from ₱23,381 to ₱140,284 each month. Or in 2020 prices, these figures can be converted into ₱25,000 and ₱150,000. 63% of those considered middle class fall into the lower middle-income group while ¼ of them belong to the middle and 1/10 are upper-middle.

So according to this income classification Philippines, the social amelioration program to benefit the low-income class was targeted well.

Carlos "Sonny" Dominguez III - Finance Secretary also said that those belong to the middle class, especially people working for medium, small, or micro companies were legible for the COVID-19 cash aid program of the government.

Characteristics Of The Filipino Middle Class

The middle class invests heavily in healthcare and education so they have a pivotal role in the country’s economy. A 2018 study revealed that middle-class families spend a large portion of their earnings on education. Their spending is around 6 times higher than those of low-income bracket.

PIDS said that ¼ of people belonging to the middle-income group work in retail trade, wholesale, sari-sari store owners, vegetable vendors, and many more. The income classification Philippines also revealed that a fifth of them work as bus conductors, jeepney or tricycle drivers, and other jobs in the transport industry.

 

 

16% of this group work for the government as school teachers or clerks. Most of the 11% of the class that work in agriculture are classified as lower middle-income.

PIDS also said around 13% of the households of the middle-income group have one OFW (overseas Filipino worker) family member.

Most urban households belong to the middle-income class but only 3% of them have a high income. Most of them live in the Metro Manila region, Central Luzon, and Calabarzon.

Filipino Middle-Class Lifestyle - Income Classification Philippines

A universal definition of poverty is none—existent just as there isn’t a detailed explanation for those considered middle-class, which does affect household income classification the Philippines. But effort has been made to define these terms.

Back in 2016, the NEDA (short for National Economic and Development Authority) introduced ‘AmBisyon Natin 2040’ to guide the development planning of the government across the minimum of four administrations.

According to NEDA, the vision is people of the Philippines’ aspirations. It was formed with input from discussions with focus groups of over 300 people and a survey with responses from 10,000. Respondents scatter across all sectors, from civil society to government and private sector.

The survey revealed that nearly 80% of people said they wanted a comfortable and simple life by the year 2040. The simple life here is defined as having at least one vehicle with a medium-sized house, enough income for basic everyday needs, and put their children through colleges, along with local trips annually.

These responses point to another way to determine income classification Philippines in the future.