Rich Filipinos getting fewer over last decade

THE number of rich Filipinos shrank over the last 10 years mostly because of rising expenses, the National Statistical Coordination (NSCB) said on Wednesday.

According to Romulo Virola, the NSCB secretary general, the number of rich Filipinos dwindled from 0.3 percent, or 51,160 families in 2000 to 0.1 percent, or 17,403 families in 2010.

The country has about 403,483 families.

To be counted in the high-income class, a family should earn at least P2,393,126 a year, or P199,927 a month this year compared to P2,000,073 a year, or P166,673 a month in 2006.

“It would have not been so bad if the decrease in the share of the high-income class families actually translated to an expansion of the middle-income class. However . . . only the share of the low-income class families, consistently expanded between 2000 and 2006,” Virola said.

The number of middle-class Filipinos also was dropping in the last few years, the NSCB chief added.

In current prices, Virola said that the average monthly income of high-income class families was P194,965 in 2006, up by 7 percent from P181,504 in 2003 but still lower by 8 percent than the level of P211,579 in 2000.

Assuming the income of the rich grows at the same rate as the inflation, their average monthly income in 2010 would amount to about P235,155.

“Based on salary alone, even the President of the Philippines would not qualify,” Virola said.

He added that while the proportionate share of expenditures of the high-income class that goes to taxes is relatively high, the median amount of taxes paid by these families is low.

Virola said that the amount of monthly taxes paid by the rich amounted to only P1,803 in 2006, P6,269 in 2003 and P4,682 in 2000.

On an annual basis, the tax payments amounted to P21,634 in 2006, P75,226 in 2003 and P56,182 in 2000.

“This low median amount of taxes paid indicates a low level of tax collection from the high-income class. Indeed, managing the budget deficit may be better addressed thru more effective implementation of existing tax laws than by imposing new ones,” Virola said.

He blamed the declining number of rich Filipinos to rising expenditures and lower income.
Virola said that the average monthly expenditures of the rich consistently increased from P78,475 in 2000 to P96,807 in 2003 and P114,035 in 2006.

The rich Filipino families spent about 75 percent of their total expenditures on basic needs compared to about 85 percent among the middle-income class and 90 percent among the low-income class between 2000 and 2006.

Food budget

The high-income families spent close to 30 percent on food while the middle-income ones spent at least 40 percent and the low-income families spent close to 60 percent.

In 2000 and 2003, while the middle-income class and the low-income class also spent the most on food, the high-income families spent relatively more for rental of their occupied dwelling units.

Across all income groups, the top four basic expenditure items in 2006 were food, rent/rental value of occupied dwelling units, transportation and communication, and fuel, light and water.

For all families combined, education ranked sixth, but for the low-income class, education only ranked seventh.

The average monthly spending of all families, regardless of income class, increased faster than their average income.

|Virola noted that the income difference between the high-income class and the rest of society has been narrowing.

In 2006, the average income of the rich was about 6.4 times that of the middle-income class and about 26 times that of the low-income class, down from 9.4 times and 36.7 times, respectively, in 2000 and 7.2 times and 28.6 times, respectively, in 2003.

The savings ratio of the high-income families also decreased from 50 percent in 2003 to 47 percent in 2006.

For the middle-income class, the savings ratio remained at 20 percent from 2003 to 2006 while for the low-income class families, it went down from 4 percent to 2 percent. –Darwin G. Amojelar, Manila Times