An Attempt to define Philippine Socioeconomic classes ABCDE Market researchers and brand marketers usually use five socioeconomic classes — Class A, B, C, D, E — when describing income segments of a population. In the case of the Philippines, it’s tough to describe who really comprise these segments and how much percentage they are compared to the total population due to lack of credible and substantive researches.
Class A vs. Class B: What’s the distinction? Identifying the extreme segments of the population is actually easier to do than defining the rest of the segments.
Can we also say that those living in expensive and posh subdivisions such as Valle Verde, La Vista, and Ayala Hillside Estates are in Class A, (even without steady annual income)?
For example, we can surmise that residents of high-end, ultra-exclusive subdivisions such as Forbes Park, Dasmarinas Village, Ayala Alabang, and the like may be classified as Class A. But what about multi-millionaires in the provinces with sprawling hectares of land and with large mansions? They appear to be uberrich but do they fall under Class A (despite the absence of a steady income stream)?
The market prices of land in those subdivisions may range from P30,000-P90,000 per square meter, so if you are to own a 1,000-square meter house and lot inside these villages, you are “worth” between P30 million and P90 million on average. If you can afford that, does that mean you are part of Class A? Or is that Class B (without income)? How do we distinguish between Class A and Class B?
Class E vs. Classes C and D The other extreme segment of the population,
meaning, they are not assured if they will have
Class E, is also easier to distinguish.
something to eat by the next meal time. What about security guards grossing P16,000 a month but leaving in squatter areas? Are they C or D?
Typically Class E people are those with no homes that they can call their own. They may reside in squatter areas (or, to use the more politically correct term, “informal settlements”). Some barely possess any property or asset and
Meanwhile, distinctions between income classes C and D are vaguely known. One of them may be called the “middle class” and another,
they usually live on a hand-to-mouth basis,
the “masa” segment - but which one exactly?
It’s even possible that the “middle class” and the “masa segment” may be just one and the same. If we look at the income pyramid
poor, we can see that he income structure in the Philippines is Type 2, or a society “with a small elite at the top, more people in the middle, and
identified in our previous article Social class structure: Income distribution between rich vs.
most at the bottom.”
If majority of the population are said to be “at the bottom,” (where exactly is the poverty line?), which class then does the “average” Filipino belong? Class C or D?
“Rich” vs. “Poor” vs. “Middle class” We found a dearth of relevant reports that can help define the income classes. The latest “Family Income and Expenditure Survey” (FIES) of the National Statistical Coordination Board (NSCB) offers some, albeit not that exhaustive, information about income classes in the country. However, instead of dividing the Philippine population into Classes A, B, C, D or E, the NSCB simply grouped the country into three segments: the high income, middle income, and low income groups.
The “middle income” class is said to earn an average of P36,934 per month while the low income segment earns an average of P9,061 per month. It is good to know that the FIES report has those details, unfortunately, it is still not detailed enough. For example, if a family’s monthly income is around P80,000 — can this be considered high income or middle income? What if the monthly income of a household is P20,000 — is this middle or low income?
High income segments are families or people earning an average of P200,000 a month or P2.4
Simply speaking, we want to know: When can we say if a family or a person belongs to the
million a year. Thus, they may be described as the “rich” segment. They are very few, numbering only 0.1% of total families in the Philippines.
high income, middle income, or low income class? The FIES report does not provide a concrete answer.
Population Percentage: Classes A, B, C, D, E
Another research we found that attempted to
Philippines is the 2011 report published by
determine the number of Classes ABCDE in the
polling firm Social Weather Stations (SWS)
entitled “Family Income Distribution in the Philippines from 1985 to 2009”.
description of each class. Still the report is useful for those interested in knowing how many in the Philippine population belongs to
This report offered insights regarding income classes but was also silent on the actual
Classes A, B, C, D or E. Data from the report are summarized in this table.
Percentage Distribution of Socio-economic Classes (SWS)
Class
% Share in Number of Families
% Share in Total Income
Average Annual Income
AB
1%
9%
PHP1,857,000
C
9%
26%
PHP603,000
D
60%
56%
PHP191,000
E
30%
9%
PHP62,000
Total
100%
100%
PHP206,000
This SWS survey shows that the high income AB
The poorest segment, Class E, also comprises a big
classes represent only 1% of the families in the
chunk. Around 30% of Filipino families are classified
Philippine population. As expected, they are very,
under this class, which undoubtedly confirms that
very few. If we are to translate this percentage into
poverty in the Philippines remains prevalent.
nominal terms, the AB classes number only 185,000 families.
If we looked at income distribution, the results are also alarming. Despite comprising only 1% of the
If we assume that each family is comprised of five (5)
Philippine population, income classes A and B own
people, the AB population of the Philippines is
9% of total incomes in the country. Worse, their
barely 1 million people. The report warns, though,
income is almost equivalent to the total income
that this number may be higher because most AB
earned by 30% of the families in the Philippines.
respondents refuse to participate in the survey.
Very obvious income disparity, indeed.
Meanwhile Class C comprises 9%, with class D
The reports we cited are not be detailed enough for
representing the largest bulk of families in the
us to fully understand income segments in the
Philippines: 60%. Therefore, six (6) out of every 10
country but provide a good foundation. We hope
Filipinos belong to Class D. Judging by this huge
that more research will give us a clear picture of the
percentage, we can say that the “masa” population
income classes in the Philippines. Future reports may
in the country is Class D.
offer solutions on how to reduce income disparity in the Philippines - Sources: NSCB, SWS,
