By Darwin G. Amojelar
A FILIPINO household has to earn close to half a million pesos this year to remain in the middleclass, according to the National Statistical Coordinating Board (NSCB).Romulo Virola, NSCB secretary-general, said the country’s middle class is likely to have shrunk in light of the global financial crisis.
“In 2006, the middle income class may be defined as those families with annual income ranging from P246,109 to P2,000,072. However, in 2008, a family needed an income that ranged from P276,626 to P2,251,551 to be considered middle class. And in 2009, you would need to earn close to half a million pesos to be in the middle class,” the NSCB official said, citing the results of the agency’s update of an earlier study on the matter.
The NSCB said the middle-income class included families that own refrigerators, radios, and a house and lot, and with houses that have strong roof materials.
“The Pinoy middle class remains vulnerable and has continued to shrink. And that is prior to the global crisis,” Virola said.
He said the middle class shrank from 19.9 percent of the population in 2003 to 19.1 percent in 2006. However, this pace of collapse was not as sharp as that between 2000 and 2003, when the middle class fell from 23 percent to 22.7 percent.
The NSCB official said the middle class must expand, as it is generally believed to be the driver of “development” and “economic growth.”
In the first quarter of the year, the economy as measured by the country’s gross domestic product (GDP) grew by only 0.4 percent, a sharp fall from 3.9 percent in the same period last year.
Virola said savings and investments of the middle class posted percentage increases between 2003 and 2006.
Between 2000 and 2006, the use of telephones and cell phones among the middle class almost doubled from 51 percent to 95.3 percent, while computer ownership jumped from 10.6 percent to 28.5 percent.
The NSCB said the top four expenditure items among the middle class and the general population were the same in 2003 and 2006: food; house rental; transportation and communication; and fuel, light and water.
Among the least priority expenditures of the middle class and the general population are non-durable furnishings, which include utensils and household linen; alcoholic beverage; house repair and maintenance; and recreation.
“Tobacco and taxes complete the bottom five expenditure items for the middle class and the general population. As we have said in the past, tobacco is no longer the good business it used to be and we have not been paying taxes to our government,” Virola said.
In December, the NSCB released a report that showed the country’s middle class was collapsing.
For its update to this report, the agency said it used inflation data to come up with new estimates of the income boundaries of the middle class.
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