1 Nov 2021 – Pinoys spend more than they earn

by Lawrence Agcaoili – The Philippine Star, 1 Nov 2021

MANILA, Philippines — A typical Filipino family consisting of five members spends more than what it earns in a month, according to a 2018 Consumer Finance Survey commissioned by the Bangko Sentral ng Pilipinas (BSP).

Based on a survey conducted by Kantar Philippines from Oct. 11, 2018 to June 2, 2019, with a sample size of 18,000 respondents, a typical Filipino family of five spends an average of P22,000 per month. “A typical Filipino household, with five members, spends around P22,000 per month on food and non-food needs, “ the survey said.

The Consumer Finance Survey is a nationwide triennial survey of the BSP on the financial condition of Filipino households, considering their assets, liabilities, income and expenditure.

Patterned after the United States’ Survey of Consumer Finances (SCF) of the Federal Reserve Board, the survey was developed to address the data gaps on household wealth and indebtedness in the Philippines and complement the existing household surveys of the Philippine Statistics Authority (PSA).

According to the survey, the monthly expenditure level was higher in urban areas at P27,507 per month in the National Capital Region (NCR), P24,595 in areas outside NCR, and P17, 477 in rural areas.

Of the total, 72 percent is spent on food, accounting for the largest share, while housing and utilities accounted for 24 percent or the largest among non-food items.

“Food, being one of the basic necessities of life, represented a significant portion of total expenditure of households in the Philippines. A significant portion of the households’ budget was also allocated to expenses on housing and utilities, such as water, electricity, gas, and other fuels,” the BSP said.

Likewise, 10.5 percent of the total expenditures went to transportation, 7.4 percent to education, 5.8 percent on alcohol, beverage and tobacco as well as 4.8 percent for health spending.

However, the survey showed the average monthly income of a household was estimated at P14,932 or P15,701 at 2018 prices. Majority or nearly 74 percent of Filipino households sourced their income from employment or from working in public or private organizations.

“Employment is the leading income source of households; mostly on-farm, in construction, and as vendors, carpenters and drivers,” the BSP said.

Almost half of the wage earners derived their income solely from employment, while 21.4 percent get their earnings from both employment and other sources.

Another 1.5 percent of wage earners source their income from employment and entrepreneurial activities, while 0.9 percent said earning came from different income sources.

The leading occupations of employed respondents were services and sale workers with a share of 22 percent, followed by elementary occupations such as sales persons and construction laborers with 21.6 percent.

On the other hand, the top occupations of spouses or partners of respondents were elementary occupations at 21 percent, plant and machine operators and assemblers at 18 percent, as well as craft and related trades workers such as carpenter, painter and mason at 17.8 percent.

A small proportion or five percent of households derived their income from entrepreneurial activities, primarily from their fully owned and controlled businesses.

“Only a few Filipino households engage in entrepreneurial activities; predominantly sole proprietorship; mostly in retail sale and food service activities,” the central bank said.

The survey also revealed nearly two in every five households or 40.4 percent has some form of debt in the form or outstanding loans with a share of 28.2 percent, household bills with 17 percent, and unpaid credit card bills with 1.6 percent.

The top sources of household loans were Pag-IBIG Fund and National Housing Authority for housing loans, in-house financing for auto loans, as well as financing companies for business and other consumer loans.

About 65 percent of the households were able to pay their auto loans on time, 43 percent for housing loans, 86 percent for business loans, 77 percent for other loans, and 70 percent for credit card loans.