Published: April 16, 2020 | Posted by: Venus Zoleta | Personal Finance
When talking about income inequality in the Philippines, the discussion would always focus on the poor vs. rich divide. But now, in the time of COVID-19 and the government-imposed lockdown, it has shifted to the poor vs. middle class.
There seems to be a virtual war between social classes on social media. Low-income families have been receiving relief goods and cash aid. On the other hand, middle-class households hardly receive government assistance. Not everyone is happy about the situation.
This raises the question: Who should the government help more, the poor or the middle class?
Before we get to that, it’s important to understand first the different social classes in the Philippines.
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Contrary to popular belief, social class is more than just about how much money you’re making.
Sociologists define social class as a group of people with similar socioeconomic status or standing within the society based on the level of income, education, and occupation.
Social classes range from low to high and often reveal inequalities in terms of power, influence, and access to resources.
Three primary social classes exist in the Philippines: the low-income class, the middle-income class, and the high-income class.
The latest Family Income and Expenditure Survey by the Philippine Statistics Authority (PSA) shows that majority (58.4%) of Filipinos belong to the low-income class, while the middle class comprises around 40% of the population. Only 1.4% fall in the high-income class.
The Philippine Institute for Development Studies (PIDS), the government’s socio-economic policy think tank, notes that the low-income class has a bigger share of the population because they tend to have larger families than other social classes.
The middle class is further classified into lower, middle, and upper middle-income classes.
In between the poor and the middle class is another social class called the low-income class—they’re not middle class but not considered poor.
And then there’s the upper-income class in between the middle class and the rich. Although people in this social class make six-digit figures monthly, they’re not considered among the elite group of the wealthiest in the Philippines.
For policy-making and public service purposes, the Philippine government looks at the per capita income (in relation to the poverty threshold) to classify the income level of its citizens and to assess their standard of living.
The current official poverty threshold in the Philippines is PHP 10,481, which is the minimum amount  a family of five needs in a month to buy their basic food and non-food items. If your family income is higher than the poverty threshold, the government doesn’t consider you poor.
Wondering what social class you’re in? Your guess might not match the government’s definition of social classes.
Per Capita Income
Monthly Income (for a family of 5)
|Poor||Less than the official poverty threshold||Less than PHP 10,481|
|Low-income class (but not poor)||Between the poverty line and twice the poverty line||Between PHP 10,481 and PHP 20,962|
|Lower middle-income class||Between two and four times the poverty line||Between PHP 20,962 and PHP 41,924|
|Middle middle-income class||Between four and seven times the poverty line||Between PHP 41,924 and PHP 73,367|
|Upper middle-income class||Between seven and 12 times the poverty line||Between PHP 73,367 and PHP 125,772|
|Upper-income class (but not rich)||Between 12 and 20 times the poverty line||Between PHP 125,772 and PHP 209,620|
|Rich||At least 20 times the poverty line||PHP 209,620 and above|
Note: Data from the Philippine Institute for Development Studies. To provide updated and accurate information that better reflects the present situation, the income computation is based on the current poverty threshold.
How do you know if you’re middle class? Is it the clothing brands you wear? The places you’ve traveled to?
The government defines the middle class as those earning incomes between two to 12 times the poverty line. This means if your family income is between around PHP 21,000 and PHP 125,000, you fall in the middle-income class.
A 2018 PIDS study provides deeper insights into the middle class in the Philippines. Here are some important and interesting facts to know about the country’s middle class vis-à-vis their poor and low-income counterparts:
Amid the COVID-19 crisis, the government has been prioritizing the poorest of the poor in terms of providing financial support. It has allocated PHP 200 billion for the social amelioration program to help 18 million low-income households tide over for two months during the enhanced community quarantine in Luzon. Each of these families will receive cash aid between PHP 5,000 and PHP 8,000.
On social media, people are having a heated debate about which social class deserves to receive more government assistance during a crisis. Is it the poor who have nothing? Or the hardworking, tax-paying middle class?
This issue has sparked appeals for the expansion of the social amelioration program’s coverage to include the middle class.
Cavite Governor Jonvic Remulla, for instance, sent a letter to President Rodrigo Duterte asking the national government to consider extending financial assistance to the middle class who has “built much but not enough.”
“[The middle class] may not get as much as the poorest of the poor, but please consider their welfare. They are often overlooked. They pay the most taxes. They keep our economy alive. They are mostly law-abiding citizens. They need a break,” said Remulla.
Even though they rely less on government help, it doesn’t mean the middle class is completely resilient to a crisis like the COVID-19 pandemic. They’re just as affected by the lockdown as the poor.
Arguing for inclusion of the lower middle-income class in the cash subsidy program, PIDS senior research fellow Jose Ramon Albert said the crisis would start taking its toll on them if the government doesn’t help them. Worse, some of them might even slide back to poverty.
To the government’s credit, it has responded to the calls for assistance to middle-class families. It will implement a Small Business Wage Subsidy Program with a PHP 50.8 billion budget. This cash aid, worth PHP 5,000 to PHP 8,000 for two months, will benefit 3.4 million middle-class workers of micro, small, and medium enterprises affected by the lockdown.
Aside from that, other ongoing COVID-19 government assistance programs (such as the SSS unemployment benefit, DOLE’s COVID Adjustment Measures Program (CAMP), and BIR income tax filing extension) cover the middle class.
Valid as their grievances are, some people in the middle class have taken to social media to assert that the poor don’t deserve government assistance because they’re not working hard and just relying on government dole-outs.
However, according to Albert, what people fail to realize is that when the economy is down due to the crisis, it’s the poor who suffer the most. “[They’re] much more affected, so they need more help than us,” he said in an interview with ABS-CBN News.
In addition to that, our impoverished kababayans have lost their source of income, have limited or no access to clean water and soap, and live in cramped spaces (where they can’t observe social distancing). Except for PhilHealth, they don’t have their own health insurance plan. The poor don’t have the means to stock up on a week’s supply of food and medicines. They can’t even afford face masks and alcohol.
“Wala kaming perang pambili. Kaya panic na lang kami, wala nang panic buying [We don’t have money to buy our needs. So we don’t panic buy; we just panic],” an informal settler quipped in a TV news report.
Considering the government’s limited funds, giving them the priority for government assistance makes a lot of sense.
The PIDS study also notes that if the government shifts public resources away from the poor toward the middle class, this would impede inclusive growth in the country, make it harder for the poor to reach middle-class status, and make the current socio-economic divide worse.
This whole issue about who should get government assistance shouldn’t be a battle between social classes.
While everyone is affected by the lockdown in one way or another, vulnerable groups—the poor, low-income class, and lower middle class—have it worse. They’re at a higher risk of losing lives and livelihood to the COVID-19 pandemic. Thus, they all deserve support not just from the government but also private citizens who are in a position to help others.
If there’s a lesson to learn from the current situation, it’s the value of compassion and empathy in times of crisis. Instead of bickering on social media, why don’t we just share whatever we can with those in need?