PRO-POOR policies that are being touted to achieve a middle-class society may be insufficient as the Philippine middle class has significantly expanded and their needs are different from those of the lowest income class, according to local economists.
In the Stratbase Albert Del Rosario Institute’s Pilipinas Conference on Monday, Ateneo School of Government Dean Philip Tuaño shared the findings of his study together with former Dean of the University of the Philippines School of Economics Emmanuel de Dios.
Tuaño said the main drivers of the expansion of the middle class were Overseas Filipino Worker remittances and the growth of the Business Process Outsourcing (BPO) industry.
“[This] implies that the official agenda towards the achievement of a ‘middle class society’ is poverty eradication, which leaves middle-class concerns such as quality education, stable and productive employment, social protection [including health care, pension, unemployment] unmentioned,” Tuaño said in a presentation.
“The result is the design of social and economic programs that cannot adequately serve the needs of the differentiated groups in the society, and take into account differential needs of different groups,” he added.
Tuaño and de Dios found that between 1997 and 2018, the middle class expanded to 33 percent of the population from 28 percent, while the ratio of the poor have declined to only 3 percent from 15 percent.
The data, based on various years of the Family Income and Expenditure Survey (FIES) of the Philippine Statistics Authority (PSA), showed the economically secure population also increased to 39 percent from 29 percent during the two-decade period.
The expansion of the middle class, Tuaño said, was visible in the growth of retail establishments, residential demand and spending on consumer durables.
“By 2018, broadly defined, ‘middle class’ constituted more than twice all families classified as poor; growth even in rural areas and among those who employed in family-owned businesses,” Tuaño said.
“Government has still to take official cognizance of large shifts in the country’s socioeconomic composition towards its transformation to a minority-poor society and importance of other classes,” he added.
Tuaño said the reduction of poverty in the country has also been reflected in various years of Pulse Asia surveys which showed that more Filipinos are now more concerned with fighting criminality than reducing poverty.
Among the middle class or Class C, Tuaño said, there was a decline in reducing poverty as a national concern but there was an increase in fighting criminality as a national concern.
“Shifting opinion of different socioeconomic classes of urgent national priorities has implications on social consensus and policy, and also ultimately choices in the elections,” Tuaño said.
“Failure to recognize middle class concerns have led to electoral results that appeared to upend previously held notions where middle class values lay,” he added.
Last year, the HDN, led by de Dios, said in its 2020/2021 report that recent social and economic events could even swell the number of vulnerable households and halt the growth of the Filipino middle class.
Socioeconomic mobility
The report noted that the country remains a laggard in socioeconomic mobility and great effort must be exerted to reach the progress achieved by the Philippines’s Asian peers.
Socioeconomic mobility, the report defined, “is the opportunity to move across social classes or categories on the basis of merit, capacity, or effort.”
The government was urged to take interventions that are well-targeted and help equalize opportunities. These must also be done “better and smarter.”
Based on the report’s estimates, Filipino households deemed very poor—whose daily per capita expenditure was $1.9 or less—declined to 9.61 percent of households in 2015 from 16.39 percent in 1997.
Those considered poor or have per capita expenditures of between $1.9 and $3.1 daily barely moved in 18 years, to 23.34 percent of the population in 2015 from 23.92 percent in 1997.
The vulnerable households—with per capita expenditures of between $3.1 and $5.5 daily—increased to 30.59 percent in 2015 from 27.63 percent in 1997.
Those deemed economically secure also increased to 30.83 percent of households in 2015 from 26.82 percent in 1997. Those classified in this category have per capita expenditures of between $5.5 and $15 daily.
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