Defining who’s rich: How rich is “rich” in the Philippines?
Who are considered “rich” in the Philippines?
It’s supposedly easy if we define “rich” as those belonging to the list of the Top 10 Richest Filipinos. However, even if your net worth does not run into billions of pesos, you may still be considered “rich” as per the definition of the National Statical Coordination Board (NSCB).
Based on the NSCB computations, using the Family Income and Expenditure Surveys (FIES) and the Labor Force Survey (LFS), a family in the Philippines must earn at least PhP 2,393,126 a year or PhP 199,927 a month to be counted as part of the high-income class in 2010.
Simply stated, your family should be earning P200,000 a month or P2.4 million a year to be considered “rich” in the Philippines.
The Rich, the Poor and the Middle Class
Rich people are indeed a rarity, with rich families numbering only 20,000 or 0.1% of the total 17.4 million families in the country.
The middle class, on the other hand, earns an average of P36,934 per month. This translates to around P500,000 per year.
The low income class, meanwhile, earns an average of P9,061 per month or around P110,000 per year.
Predictors of Wealth
The NSCB also identified three predictors that are consistently significant for the high income group. These are:
- household head working as corporate executives, managers, managing proprietors, supervisors, officials of government and special interest organizations;
- household owns at least three air conditioning units; and
- owns at least three cars / vehicles
This means if the household head is a top executive or business owner or a politician, the family owns at least 3 cars, and their house has at least 3 aircon units, then that family is most probably rich.
Breakdown of Family Expenditures
All families regardless of income spend more on food and rent/rental value of their house.
Food expense of high income families, however, represent only 21% or one-fifth of total expenditures while for the low income families, this already reaches 53.4%.
This figure only goes to show that the poor already spend half of their hard-earned money on food.
For the high-income families, their top 3 expenditures are:
- Food – 21.1%
- Housing and shelter – 16.6%
- Transportation and communication – 12.5%
Middle-class families share the same top expenditures, although their spending has a different percentage compared to the high-income families:
- Food – 34.8%
- Housing and shelter – 13.9%
- Transportation and communication – 9.8%
Low-income families do prioritize spending on the basic essentials, such as food, housing, and utilities such as fuel, light and water:
- Food – 53.4%
- Housing and shelter – 10.7%
- Fuel, light and water – 7.7%
Now that you know who the rich and poor are in the Philippines, where do you categorize yourself? Are you part of the high income, the middle income, or the low income segment of the Philippines?
Other must-read reports below!
- Socioeconomic Classes (SEC) ABCDE: How many are they?
- Social class structure: Income distribution of rich vs. poor
- More articles about Rich People
- Other articles on Savings and Personal Finance