NSCB - Statistically Speaking...by Dr. Romulo A. Virola

HOW RICH IS RICH?

A month after the historic automated national elections, we are pleased to note the many good things that happened: the orderly and peaceful conduct, the relatively high turnout of voters, the quick count and the fact that many politicians learned to conceive, este concede! We truly deserved to have been congratulated by the PCOS machines, didn’t we?

And as the new leaders take their respective places in government and in governance, it can be expected that poverty reduction will continue to be the overarching concern in the development agenda.

To respond to the growing demand for statistical information relevant to local level planning and sectoral targeting, the National Statistical Coordination Board (NSCB) ² has been releasing official poverty statistics at various levels of disaggregation ³. Aside from these, we are often requested to generate statistics on the bottom deciles (e.g., bottom 30%, 20%, or 10% ) of the income distribution to provide information on the characteristics of the poor.

And of course, the NSCB has pro-actively generated statistics, not only on the country’s mahihirap but also on families who may be vulnerable to becoming mahirap! In 2007, the NSCB, through a paper presented during the 10th National Convention on Statistics ⁴ and a Statistically Speaking article ⁵, examined the middle-income class, specifically, whether it has been expanding or shrinking over time… whether we are losing them to low-income families.

Around this time last year, in response to the growing interest on the vulnerability of the middle-income class, Statistically Speaking ⁶ updated the 2007 study to incorporate the results of the 2006 Family Income and Expenditures Survey (FIES) of the National Statistics Office (NSO).

But the rich are also part of our society. During the last elections, we heard some of them complaining that almost every politician was talking about taking care of the poor! What about us, the rich ululated! Lest they feel so aggrieved and marginalized, this month, Statistically Speaking will, for a change, focus on the high-income class of Philippine society. Yes, indeed, isn’t it high time we looked at the characteristics of the high-income class of our society? Malay natin, understanding their income and expenditure patterns might give us tips on how to become rich like them! Kidding aside, while the Gini coefficient ⁷ has been showing steady gains towards a more equitable distribution of income from 0.4822 in 2000 to 0.4605 in 2003 to 0.4580 in 2006, a study focusing on the high-income class will enrich our appreciation of the gap between the rich and poor.

So who are the rich? Sila ba yung may kaya lang pumunta kay Belo for specialized services? Driving a Lexus, BMW, and the like? How rich is rich? Do they also eat galunggong and NFA rice like most of us? And do they pay taxes? How much?

This article will determine the high-income class using empirical results, following the same methodology developed by Virola and Addawe in 2007 and 2009. The earlier studies defined the middle-income class in two ways: Method 1 – based on income cut-off ⁸ using cluster analysis; and Method 2 – based on socio-economic characteristics (using the results of Method 1), through regression analysis. For this study, for Method 1, we maintained the results of the cluster analysis in the previous studies and straightforwardly updated the income cut-offs using the Consumer Price Index (CPI). For Method 2, on the other hand, we performed new runs of the regression analysis to determine the significant predictors of income of the high-income class. Since the results of the 2009 FIES have not been released, this study will use the results of the 2000, 2003, and 2006 FIES and Labor Force Survey (LFS).

quote And now, for the rich and the famous of Philippine society.

In 2010, to be counted in the high-income class, a family should earn at least PhP 2,393,126 a year or PhP 199,927 a month compared to PhP 2,000,073 a year or PhP 166,673 a month in 2006! (Table 1)

In 2006, the rich numbered 19,738 families or 0.1% of the estimated 17, 403,483 families in the country. Just like the middle-income class, the rich in our society have been dwindling, from 0.3% in 2000 (51,160 families) and 0.2% quote in 2003 (25,849 families). Kawawa naman sila! (Table 2)

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, as pointed out in the Statistically Speaking articles previously cited, only the share of the low-income class families, consistently expanded between 2000 and 2006! (Table 2) Bakit ganon?

In current prices, the average ⁹ monthly income of high-income class families was PhP 194,965 in 2006 up by 7% from PhP 181,504 in 2003 but still lower by 8% than the level of PhP 211,579 in 2000. Assuming the income of the rich grows at the same rate as the CPI inflation, their average monthly income in 2010 would amount to about PhP235,155. Based on salary alone, even the President of the Philippines would not qualify! (Tables 3 and 4)

quote On the other hand, the average monthly expenditures of the rich consistently increased from PhP 78,475 in 2000 to PhP 96,807 in 2003 and PhP 114,035 in 2006. In fact, from 2000 to 2006 the average monthly spending of all families, regardless of income class, increased faster than their average income. It may be noticed however, that the increase in spending of the rich decelerated from 23% during the period 2000 to 2003 to 18% between 2003 and 2006, while that of the middle-income and the low-income classes accelerated. So after their income went down between 2000 and 2003, natuto ring magtipid pati mga mayayaman! (Tables 3 and 4)

quote 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 26.0 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!

It may be noted that this is in consonance with the findings of an earlier Statistically Speaking article¹⁰ that growth had been pro-poor¹¹ between 2000 and 2003! (Table 5)

In terms of difference in expenditure, the situation has not changed much, and as may be expected, is lower than in the case for income. In 2006, the rich spent about 4.6 times and 16.5 times the amount spent by the middle-income class and the low-income class, respectively. (Table 5)

Are the rich getting richer?

quote The savings ratio¹² of the high-income families decreased from 50% in 2003 to 47% in 2006. For the middle-income class, the savings ratio remained at 20% from 2003 to 2006 while for the low-income class families, it went down from 4% to 2%. (Table 6)

We do not know how it feels to save close to 50% of our income, but let us try to look more closely on how rich families spend. Saan ba napupunta ang limpak limpak na salapi ng mga rich?

From 2000 to 2006, the high-income families spent about 75% of their total expenditures on basic needs ¹³ compared to about 85% among the middle-income class and 90% among the low-income class. (Table 7)

And how do the rich spend on “basic” expenditures?

quote It may be expected that the biggest share of expenditures would go to food. Indeed this was so in 2006 when the high-income families spent close to 30% on food while the middle-income spent at least 40% and the low-income close to 60%. 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 (imputed value when owned) of their occupied dwelling units. Could this be because in the earlier years, the rental cost of living in mansions and first-class condominiums was higher compared to 2006 after real estate had boomed with double digit growth in GVA ¹⁴ resulting in the decline of rental values? (Table 8)

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 6th, but for the low-income class, education only ranked 7th. Indeed, if we are to inject new vigor to our human capital, subsidy for the education of our poor is a must! (Table 8)

For the non-basic expenditures, high on the list across all families in 2006 are expenditures on special family occasion ¹⁵ like birthday, wedding and baptismal parties, other expenditures,¹⁶ which include life insurance and retirement premiums as well as interest payments on loans and durable furnishings. But of course! NSCB studies ¹⁷ have shown that the most important source of happiness for many Pinoys is the family! (Table 8)

Rounding up the top four among the high-income and middle-income classes was taxes ¹⁸ (isn’t that nice to know?)

while for the low-income class, unfortunately, it is tobacco ! (Table 8)

In terms of levels of expenditures by expenditure item:

In 2006, the average monthly food expenditure of a high-income class family was PhP 21,184; this is 2.4 and 5.7 times the amount spent by middle- (PhP 8,702) and low-income class families (PhP 3,687) , respectively! Ano kayang kakaiba sa mga kinakain ng mga high-income families? (Tables 3 and 5)

For transportation and communication, high-income class families were spending, on the average, PhP 12,694 per month while middle- and low-income families spent PhP 2,212 and PhP 305, respectively, in 2006! Malaki siguro ang matitipid nila kung matututo silang mag MRT o pedicab! (Table 3)

For fuel, light, and water, high-income families were spending PhP 6,175 monthly, which is 3.3 times and 12.7 times more than what were spent by middle- (PhP 1,865) and low-income families (PhP 485), respectively, in 2006! (Tables 3 and 5)

And do the rich engage in conspicuous consumption of non-basic commodities? Do they pay taxes? The FIES public use files (PUFs) may not be able to provide all the answers but here are some.

In 2006, the high-income families spent, on the average, PhP 9,583 monthly on durable furnishing, which is 9.6 and 33.8 times what the middle- (or PhP 1,000) and low-income (or PhP 283) families spent! (Tables 3 and 5)

quote But 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! The amount of monthly taxes paid by the rich amounted to only PhP 1,803 in 2006, PhP 6,269 in 2003 and PhP 4,682 in 2000. On an annual basis the tax payments amounted to PhP 21,634 in 2006, PhP 75,226 in 2003 and PhP 56,182 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! (Table 3)

quote However, it is also worth noting that in 2006, our high-income families spent PhP 2,800 monthly on gifts and contributions, up from PhP 767 in 2000 and more than double the PhP 1,300 in 2003. This includes gifts and assistance to private individuals outside the family, contributions to church and religious institutions, and contributions and donations to other institutions. The grouchy may consider this a pittance, but it must indicate the growing conscientization of the rich! Don’t you agree Doña Buding? Kc, d lhat ng myaman ay k2lad ni Wuwa! (Table 3)

Talking about conscientization, if the rich families sampled in the FIES would tithe their savings towards poverty reduction, the family with median savings among the rich would be able to deliver 5 families from poverty. (Table 9)

As mentioned earlier, not only will we look at the income and expenditure of high-income class families, we shall also try to describe their socio-economic characteristics.

quote Three predictors of income were found to be consistently significant for the high-income class for 2000, 2003, and 2006: a) household head working as corporate executives, managers, managing proprietors, supervisors, officials of government and special interest organizations; b) owns at least three air conditioning units; and c) owns at least three cars/vehicles. Sa mga naghahangad na maging “June bride” or “June bridegroom” with a “good catch”, dapat alam nyo na kung sino ang hahanapin!

Six other variables had positive effect on income in some but not for all three years: 1) household head is a college graduate; 2) household head has a postgraduate degree; 3) number of employed household members is greater than three; 4) ownership of a house; 5) household head is an employer in his own family-operated farm or business; and 6) household living in urban areas. (Table 10)

We are almost sure that aside from the NSCB, many are now waiting for the results of the 2009 FIES not only so that NSCB can release updated statistics on the country’s low-, middle-, and high-income families, but also for us to know what happened to the poverty situation in 2009 – after the global financial crisis!

Meantime, we are currently undertaking a study to improve the methodology on the identification of the low-, middle-, and high-income class families which will be presented in the 11th National Convention on Statistics (NCS) on 4-5 October 2010 ¹⁹. Hopefully, our efforts will be useful in designing programs that will better target the marginalized… and narrow the gap between the poor and the rich!

Please make sure you are counted in the Census! Happy Independence Day! At nawa’y makamit na natin ang tunay na kalayaan sa kahirapan!

Reactions and views are welcome through email to the author at ra.virola@nscb.gov.ph

________________

¹Secretary General of the National Statistical Coordination Board (NSCB) and Chairman of the Statistical Research and Training Center (SRTC). He holds a Ph. D. in Statistics from the University of Michigan in Ann Arbor, U.S.A. and has taught mathematics and statistics at the University of the Philippines. He is also a past president of the Philippine Statistical Association. This article was co-written by Jessamyn O. Encarnacion and Ms. Mechelle Viernes, OIC-Director and Statistical Coordination Officer II of the NSCB, respectively. The authors thank Bernadette B. Balamban, Noel S. Nepomuceno, Candido J. Astrologo, Jr., Ma. Libertie V. Masculino, Albert Garcia, Andrea Baylon, and Jeffrey Enrado for the assistance in the preparation of the article. The views expressed in the article are those of the authors and do not necessarily reflect those of the NSCB.

² Per Executive Order No. 352, Series of 1996, Designation of Statistical Activities that will Generate Critical Data for Decision-making of the Government and the Private Sector (also known as the System of Designated Statistics (SDS)), the NSCB generates the country’s official poverty statistics.

³ In accordance with NSCB Resolution No. 1, Series of 2003, Approving the Proposed Methodology for Computation of Provincial Poverty Statistics, official poverty statistics are released at the national, regional, and provincial levels, starting with the year 2000. Further, per NSCB Resolution No. 11, Series of 2007, Approving the Methodology for the Generation of Poverty Statistics for the Basic Sectors, the NSCB is releasing official poverty statistics for eight basic sectors (i.e., children, youth, women, senior citizens, migrant and formal sector workers, farmers, fishermen, urban population) at the national and regional levels starting with the year 2000.

⁴ Virola, Romulo A., Addawe, Mildred B., and Querubin, Ma. Ivy T. Trends and Characteristics of the Middle-Income Class in the Philippines: Is it Expanding or Shrinking? 10th National Convention on Statistics. National Statistical Coordination Board. 1-2 October 2007. (http://www.nscb.gov.ph/ncs/10thNCS/papers/contributed%20papers/cps-12/cps12-01.pdf)

⁵ Virola, Romulo A. and Addawe, Mildred B. Anti-Poverty? How About Pro-Middle Class? Statistically Speaking. National Statistical Coordination Board. 10 December 2007. (http://www.nscb.gov.ph/headlines/StatsSpeak/2007/121007_rav_poverty.asp)

⁶ Virola, Romulo A. and Addawe, Mildred B. Pinoy Middle Class Before the Crisis! Statistically Speaking. National Statistical Coordination Board. 8 June 2009. (http://www.nscb.gov.ph/headlines/StatsSpeak/2009/060809_rav_middleclass.asp)

⁷ It is a measure of the extent to which the distribution of income/ expenditure among families/individuals deviates from a perfectly equal distribution, with limits 0 for perfect equality and 1 for perfect inequality.
(Source: http://www.nscb.gov.ph/glossary/terms/indicatorDetails.asp?strIndi=181)

⁸ In the methodology, it must be noted that the low-income class is not the same as the poor. It includes the poor families plus non-poor families whose incomes do not qualify as middle class.

⁹ All references made to average income/expenditure (in levels) are based on the median.

¹⁰ Virola, Romulo A. Poverty Statistics 2000-2003: Has Economic Growth Been Pro-Poor? Statistically Speaking. National Statistical Coordination Board. 14 February 2005. (http://www.nscb.gov.ph/headlines/StatsSpeak/021405_rav_povstat03.asp)

¹¹ In terms of the increase in the incomes of the lower income decile groups increasing faster than the higher income decile groups.

¹² Defined as (total income – total expenditures)/ total income. The average savings ratio from the 2000 FIES is very different from that from the 2003 and 2006 FIES. The 2000 FIES sample included a greater number of very high-income families compared to 2003 and 2006.

¹³ Using the official poverty methodology adopted by the NSCB, expenditure on basic needs refers to expenditures on the following: 1) food; 2) rent/rental value of occupied dwelling units; 3) transportation and communication; 4) fuel, light, and water; 5) education; 6) medical care; 7) non-durable furnishings; 8) house maintenance and minor repairs; 9) household operation; 10) personal care and effects; and 11) clothing, footwear, and other wear.

¹⁴ As compiled by the NSCB, Gross Value Added of Real Estate grew by 16.1%, 15.4% and 17.1%, respectively, during the three-year period 2003-2004, 2004-2005 and 2005-2006.

¹⁵ Expenditures on special family occasions include family purchase in cash or on credit any food or pay for services for special family occasions such as: 1) Food and refreshments; 2) Alcoholic beverages; 3) Service of priests, cooks, waiters, etc.; 4) Rental of space, facilities and equipment; 5) Package tours; and 6) Others (balloons, flowers, etc.).

¹⁶ Other expenditures include the following: 1) Life insurance and retirement premiums (including contribution to PAG-IBIG funds), SSS, GSIS, and Private Insurance Premiums; 2) Interest payment on loans for household expenses; and 3) Other (losses due to fire and theft, legal fees, professional fees, welfare and civic association dues, membership fees, periodic monthly or yearly dues, Medicare including pre-need plan, repossessed appliances, etc.).

¹⁷ Virola, Romulo A. and Encarnacion, Jessamyn O. Measuring Progress of Philippine Society: Gross National Product or Gross National Happiness? 10th National Convention on Statistics. National Statistical Coordination Board. 1-2 October 2007.

¹⁸ Payment for taxes includes: 1) Income tax; 2) Real estate tax; 3) Car registration, toll fees, and driver's license; and 4) Other direct taxes (residence, etc.).

¹⁹ For those who are interested to participate in the 11th NCS, please visit: http://www.nscb.gov.ph/ncs/11thNCS/Default.asp

Table 1. Annual family income cut-off, by income class: 2000, 2003, 2006-2010

Year	Income Class
	Low	Middle		High
	Low	Lower Limit	Upper Limit	High
2010	< 294,296	294,296	2,393,125	> 2,393,125
2009	< 285,551	285,551	2,320,606	> 2,320,606
2008	< 276,627	276,627	2,248,087	> 2,248,087
2007	< 253,069	253,069	2,056,637	> 2,056,637
2006	< 246,109	246,109	2,000,072	> 2,000,072
2003	< 203,109	203,109	1,651,632	> 1,651,632
2000	< 178,468	178,468	1,449,295	> 1,449,295

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey and Consumer Price Indexes of the National Statistics Office.

Note: CPI (2000=100): 2006 - 137.9; 2007 – 141.8; 2008 - 155.0;
2009 – 160.0; 2010 (Average from January to May) - 165.0

Table 2. Percent Share and Magnitude of Families, by Income Class:
2000, 2003, and 2006

Year	Income Class						Estimated Total Number of Families
	Low Income		Middle Income		High Income
	Level	Percent	Level	Percent	Level	Percent
2006	14,065,921	80.8	3,317,824	19.1	19,738	0.1	17,403,483
2003	13,182,297	79.9	3,286,010	19.9	25,849	0.2	16,494,156
2000	11,598,258	77	3,422,524	22.7	51,160	0.3	15,071,942

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Table 3.Average monthly income and expenditure (by major expenditure item),
by income class: 2000, 2003, 2006, and 2010
In Pesos

Expenditure Item	2000 1/			2003 1/			2006 1/			2010 2/
Expenditure Item	High Income Class	Middle Income Class	Low Income Class	High Income Class	Middle Income Class	Low Income Class	High Income Class	Middle Income Class	Low Income Class	High Income Class	Middle Income Class	Low Income Class
Estimated families
Total families	51,160	3,422,524	11,598,258	25,849	3,286,010	13,182,297	19,738	3,317,824	14,065,921
Share to total families	0.3	22.7	77.0	0.2	19.9	79.9	0.1	19.1	80.8
Average monthly income 3/	211,579	22,392	5,766	181,504	25,079	6,355	194,965	30,622	7,513	235,155	36,934	9,061
Average monthly expenditure 3/	78,475	17,347	5,186	96,807	20,189	5,785	114,035	24,680	6,918	137,542	29,767	8,345
Average monthly basic 4/ expenditure 3/	61,520	15,157	4,797	80,012	17,897	5,338	96,292	21,954	6,398	116,141	26,479	7,717
Food	19,982	6,933	2,975	17,243	7,637	3,192	21,184	8,702	3,687	26,766	10,995	4,658
Rent/rental value of occupied dwelling units	10,000	2,000	500	22,500	2,500	500	11,000	3,000	550	12,059	3,289	603
Transportation and communication	9,050	1,257	143	11,960	1,627	194	12,694	2,212	305	14,124	2,461	339
Fuel, light and water	3,502	1,060	334	4,733	1,269	363	6,175	1,865	485	7,973	2,408	626
Education	3,993	765	67	4,148	839	71	3,021	520	43	3,754	646	53
Medical care	503	110	26	793	162	33	2,213	244	41	2,757	305	51
Non-durable Furnishings	517	54	21	363	57	20	417	57	21	434	59	22
House Maintenance and Minor repairs	3,333	333	92	1,917	417	100	1,250	417	88	1,472	491	103
Household Operation	5,468	203	74	3,642	252	77	4,641	330	99	5,322	378	113
Personal Care and Effects	1,945	593	182	2,181	720	217	3,090	814	264	3,439	905	294
Clothing, Footwear and other Wear	1,258	461	121	2,249	559	134	2,495	563	136	2,806	633	152
Average monthly non-basic expenditure 3/	16,955	2,190	389	16,795	2,292	446	17,743	2,726	520	21,401	3,288	627
Recreation 5/	568	100	19	596	98	18	958	125	21	1,077	140	23
Alcoholic Beverage	546	133	69	165	121	65	263	139	73	298	157	83
Tobacco	321	195	98	334	174	98	303	190	108	316	197	113
Durable furnishing	2,150	700	254	3,271	750	250	9,583	1,000	283	10,666	1,113	315
Taxes 6/	4,682	334	5	6,269	457	4	1,803	460	6	2,174	555	8
Special family occasion	1,508	417	125	2,250	458	125	2,167	583	167	2,411	649	185
Gifts and contribution	767	105	22	1,300	142	24	2,800	208	33	3,098	231	37
Other expenditures	3,500	608	138	2,239	704	139	3,316	878	168	3,669	972	185

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Notes:
1/ - Using actual data from the 2000, 2003, and 2006 FIES.
2/ - Estimated using consumer price indexes (2000=100) for 2006 and (Jan to May) 2010.
3/ - Based on median income/expenditure. Note that the computation of median for this article was limited only to those observations with "non-zero" values.
4/ - Components of basic expenditure of a family are based on the official poverty estimation methodology (i.e., NSCB Resolution No. 1, Series of 2003).
5/ - Expenditures on recreation cover the following: 1) Recreational goods and supplies (such as children's bicycle and play cars, dolls and other toys, balls, golf clubs, and rackets, mahjong sets, playing cards, chess sets, video and cassette tapes and records);
2) Musical instruments (such as piano, organ, guitar, violin, etc.); 3) Admission tickets to movies/shows; 4) Admission fees to cockfights and races; and 5) Other recreational expenses (such as rental of video tapes, admission fees for basketball, boxing, circuses and fairs, dances, discos, nightclubs and beerhouses, bowling, billiard and pools, pets, food for pets, arcades, play stations, cable subscription, and others).
6/ - Payment for taxes includes: 1) Income tax; 2) Real estate tax; 3) Car registration, toll fees, and driver's license; and 4) Other direct taxes (residence, etc.).

Table 4. Growth rate of average monthly income and expenditure
(by major expenditure item), by income class: 2000, 2003, and 2006
In Percent

Expenditure Item	High-Income class		Middle-Income class		Low-Income Class
Expenditure Item	2003/ 2000	2006/ 2003	2003/ 2000	2006/ 2003	2003/ 2000	2006/ 2003
Average monthly income	(14.2)	7.4	12.0	22.1	10.2	18.2
Average monthly expenditure	2 3.4	17.8	16.4	22.2	11.5	19.6
Average monthly basic expenditure	30.1	20.3	18.1	22.7	11.3	19.9
Food	(13.7)	22.9	10.2	13.9	7.3	15.5
Rent/rental value of occupied dwelling units	125.0	(51.1)	25.0	20.0	-	10.0
Transportation and communication	32.1	6.1	29.4	36.0	35.3	57.6
Fuel, light and water	35.1	30.5	19.7	47.0	8.7	33.5
Education	3.9	(27.2)	9.7	(38.0)	6.5	(40.0)
Medical care	57.6	179.1	47.3	51.1	27.0	26.2
Non-durable Furnishings	(29.8)	14.9	5.4	(0.3)	(2.0)	2.0
House Maintenance and Minor repairs	(42.5)	(34.8)	25.0	-	9.1	(12.5)
Household Operation	(33.4)	27.4	24.4	30.8	4.8	27.9
Personal Care and Effects	12.2	41.7	21.4	13.0	19.6	21.7
Clothing, Footwear and other Wear	78.8	10.9	21.2	0.7	10.7	1.4
Average monthly non-basic expenditure	(0.9)	5.6	4.7	18.9	14.7	16.6
Recreation	4.8	60.8	(2.5)	28.2	(8.7)	19.0
Alcoholic Beverage	(69.8)	59.0	(9.0)	14.3	(5.8)	12.7
Tobacco	4.1	(9.1)	(10.6)	8.7	-	11.1
Durable furnishing	52.1	193.0	7.1	33.3	(1.6)	13.3
Taxes	33.9	(71.2)	36.8	0.7	(9.1)	50.0
Special family occasion	49.2	(3.7)	10.0	27.3	-	33.3
Gifts and contribution	69.6	115.4	34.9	47.1	11.5	37.9
Other expenditures	(36.0)	48.1	15.8	24.7	0.7	20.9

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Table 5. Ratio of the monthly average income/expenditure of the high-income class to middle-/low-income class:2000, 2003, 2006

	High/Middle			High/Low			Low Income
	2000	2003	2006	2000	2003	2006	High/Middle		High/Low
							03-00	06-03	03-00	06-03
Average monthly income 1/	9.4	7.2	6.4	36.7	28.6	26.0	(2.2)	(0.9)	(8.1)	(2.6)
Average monthly expenditure 1/	4.5	4.8	4.6	15.1	16.7	16.5	0.3	(0.2)	1.6	(0.3)
Average monthly basic 2/ expenditure 1/	4.1	4.5	4.4	12.8	15.0	15.0	0.4	(0.1)	2.2	0.1
Food	2.9	2.3	2.4	6.7	5.4	5.7	(0.6)	0.2	(1.3)	0.3
Rent/rental value of occupied dwelling units	5.0	9.0	3.7	20.0	45.0	20.0	4.0	(5.3)	25.0	(25.0)
Transportation and communication	7.2	7.4	5.7	63.3	61.8	41.6	0.2	(1.6)	(1.5)	(20.2)
Fuel, light and water	3.3	3.7	3.3	10.5	13.0	12.7	0.4	(0.4)	2.6	(0.3)
Education	5.2	4.9	5.8	59.9	58.4	70.9	(0.3)	0.9	(1.5)	12.5
Medical care	4.6	4.9	9.1	19.7	24.4	54.0	0.3	4.2	4.7	29.6
Non-durable Furnishings	9.6	6.4	7.4	24.8	17.8	20.0	(3.2)	1.0	(7.0)	2.2
House Maintenance and Minor repairs	10.0	4.6	3.0	36.4	19.2	14.3	(5.4)	(1.6)	(17.2)	(4.9)
Household Operation	27.0	14.5	14.1	74.4	47.3	47.1	(12.6)	(0.4)	(27.1)	(0.2)
Personal Care and Effects	3.3	3.0	3.8	10.7	10.1	11.7	(0.2)	0.8	(0.7)	1.7
Clothing, Footwear and other Wear	2.7	4.0	4.4	10.4	16.8	18.4	1.3	0.4	6.4	1.6
Average monthly non-basic expenditure 1/	7.7	7.3	6.5	43.6	37.6	34.1	(0.4)	(0.8)	(5.9)	(3.5)
Recreation	5.7	6.1	7.7	29.7	34.0	46.0	0.4	1.6	4.4	12.0
Alcoholic Beverage	4.1	1.4	1.9	7.9	2.5	3.6	(2.7)	0.5	(5.4)	1.0
Tobacco	1.6	1.9	1.6	3.3	3.4	2.8	0.3	(0.3)	0.1	(0.6)
Durable furnishing	3.1	4.4	9.6	8.5	13.1	33.8	1.3	5.2	4.6	20.7
Taxes	14.0	13.7	3.9	1,021.5	1,504.5	288.5	(0.3)	(9.8)	483.0	(1,216.1)
Special family occasion	3.6	4.9	3.7	12.1	18.0	13.0	1.3	(1.2)	5.9	(5.0)
Gifts and contribution	7.3	9.2	13.4	35.4	53.8	84.0	1.9	4.3	18.4	30.2
Other expenditures	5.8	3.2	3.8	25.5	16.2	19.8	(2.6)	0.6	(9.3)	3.6

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office
Notes:
1/ - Based on median income/expenditure. Note that the computation of median for this article was limited only to those observations with "non-zero" values.
2/ - Components of basic expenditure of a family are based on the official poverty estimation methodology (i.e., NSCB Resolution No. 1, Series of 2003).

Table 6. Average of the savings ratio of families, by income class:
2000, 2003, and 2006

Year	Income-class families
Year	High	Middle	Low	All
2006	0.47	0.20	0.02	0.06
2003	0.50	0.20	0.04	0.07
2000	0.94	0.48	(0.93)	(0.61)

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Note: Savings ratio is computed as the average of the ratios of (1- (total expenditure/total income))

Table 7. Average of the ratios of the average monthly expenditure on an item
to average monthly expenditure, by income class: 2000, 2003, 2006
In Percent

	High Income			Middle Income			Low Income			All Families
	2000	2003	2006	2000	2003	2006	2000	2003	2006	2000	2003	2006
Estimated Families
Total	51,160	25,849	19,738	3,422,524	3,286,010	3,317,824	11,598,258	13,182,297	14,065,921	15,071,941	16,480,393	17,403,482
Share to total	0.3	0.2	0.1	22.7	19.9	19.1	77	79.9	80.8
Average monthly basic expenditure	75.6	77.8	75.1	85.4	84.6	84.8	90.4	89.6	89.7	89.2	88.6	88.8
Food	19.6	19.0	21.1	39.4	37.0	34.8	57.3	53.5	53.4	53.1	51.7	49.8
Rent/rental value of occupied dwelling units	22.6	21.8	16.6	14.6	14.3	13.9	10.2	10.3	10.7	11.3	11.2	11.3
Transportation and communication	11.7	12.6	12.5	7.8	8.8	9.8	3.7	3.4	5.3	4.7	5.3	6.2
Fuel, light and water	4.6	5.4	5.6	6.3	6.5	7.7	6.9	6.8	7.7	6.8	6.8	7.7
Education	5.0	6.1	3.7	5.2	5.1	5.9	2.2	2.0	2.1	2.9	2.6	2.8
Medical care	1.9	2.1	3.4	2.0	2.4	3.2	1.4	1.5	1.9	1.6	1.8	2.2
Non-durable Furnishings	0.2	0.3	0.2	0.2	0.2	0.2	0.2	0.2	0.2	0.2	0.2	0.2
House Maintenance and Minor repairs	0.4	0.7	1.4	0.9	0.8	0.5	0.7	0.6	0.5	0.7	0.6	0.5
Household Operation	5.1	4.4	4.8	2.3	2.5	2.7	1.7	1.6	1.7	1.8	1.8	1.9
Personal Care and Effects	2.7	2.7	3.0	3.8	3.9	3.6	3.6	3.7	3.9	3.7	3.9	3.9
Clothing, Footwear and other Wear	1.8	2.6	2.8	2.9	3.1	2.6	2.6	2.6	2.2	2.6	2.7	2.3
Average monthly non-basic expenditure	24.4	22.2	24.9	14.6	15.4	15.2	9.6	10.4	10.3	10.8	11.4	11.2
Recreation	0.7	0.9	1.4	0.6	0.6	0.6	0.2	0.4	0.2	0.3	0.3	0.3
Alcoholic Beverage	0.4	0.1	0.6	0.6	0.6	0.5	1.0	0.6	1.0	0.9	1.0	0.9
Tobacco	0.2	0.2	0.1	0.8	0.7	0.6	1.7	0.7	1.5	1.5	1.5	1.3
Durable furnishing	9.6	4.6	5.0	2.3	2.8	2.8	1.0	1.7	1.3	1.3	1.6	1.6
Taxes	5.5	8.2	5.4	2.9	3.0	2.4	0.4	3.0	0.5	1.0	1.0	0.9
Special family occasion	2.7	2.5	4.0	2.8	2.8	3.2	1.9	2.8	2.2	2.1	2.2	2.4
Gifts and contribution	1.4	2.4	3.8	1.1	1.4	1.7	0.6	1.0	0.9	0.7	0.9	1.0
Other expenditures	3.8	3.3	4.4	3.5	3.5	3.5	2.7	3.5	2.7	2.9	2.8	2.9

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Table 8. Average of the ratios of the average monthly expenditure on an item
to average monthly basic/non-basic expenditure, by income class: 2000, 2003, 2006
In Percent

	High Income			Middle Income			Low Income			All Families
	2000	2003	2006	2000	2003	2006	2000	2003	2006	2000	2003	2006
Estimated Families
Total	51,160	25,849	19,738	3,422,524	3,286,010	3,317,824	11,598,258	13,182,297	14,065,921	15,071,941	16,480,393	17,403,482
Share to total	0.3	0.2	0.1	22.7	19.9	19.1	77	79.9	80.8
Average monthly basic expenditure	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Food	27.2	24.8	28.7	46.1	43.8	41.2	63.3	61.8	59.5	59.2	58.2	56.0
Rent/rental value of occupied dwelling units	27.6	27.6	21.3	16.9	16.6	16.1	11.2	11.5	11.9	12.6	12.5	12.7
Transportation and communication	15.9	16.2	16.6	9.2	10.5	11.6	4.1	5.0	6.0	5.3	6.1	7.1
Fuel, light and water	6.1	7.0	7.4	7.4	7.7	9.1	7.7	7.7	8.6	7.6	7.7	8.7
Education	6.1	7.8	5.1	6.0	5.9	6.8	2.4	2.2	2.3	3.2	2.9	3.1
Medical care	2.6	2.7	4.5	2.4	2.9	3.8	1.6	1.8	2.2	1.8	2.0	2.5
Non-durable Furnishings	0.2	0.5	0.4	0.3	0.3	0.2	0.2	0.3	0.2	0.2	0.3	0.2
House Maintenance and Minor repairs	0.6	1.0	1.8	1.1	1.0	0.7	0.8	0.7	0.6	0.8	0.7	0.6
Household Operation	7.4	5.6	6.4	2.7	3.0	3.1	1.9	1.8	1.9	2.1	2.1	2.2
Personal Care and Effects	3.5	3.5	4.0	4.5	4.7	4.3	4.0	4.4	4.4	4.1	4.4	4.3
Clothing, Footwear and other Wear	2.6	3.5	3.8	3.5	3.7	3.1	2.9	3.0	2.5	3.0	3.1	2.6
Average monthly non-basic expenditure	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
Recreation	5.6	6.1	6.4	5.7	5.3	5.3	3.2	2.9	3.1	3.8	3.4	3.5
Alcoholic Beverage	2.5	0.7	2.5	5.3	4.9	4.5	11.3	12.4	11.1	9.9	10.9	9.8
Tobacco	1.2	1.4	0.5	7.4	6.4	5.3	18.7	18.2	16.4	16.0	15.8	14.2
Durable furnishing	22.0	14.0	12.5	11.5	12.5	11.6	5.7	7.2	6.6	7.1	8.3	7.6
Taxes	24.5	34.8	23.4	18.2	18.5	14.6	5.1	4.9	4.5	8.1	7.6	6.5
Special family occasion	15.5	14.4	16.7	20.8	20.6	22.5	18.9	18.8	19.9	19.3	19.1	20.4
Gifts and contribution	9.4	14.0	17.8	8.8	9.8	12.0	8.1	7.8	9.0	8.3	8.2	9.6
Other expenditures	19.3	14.5	20.1	22.2	21.9	24.2	29.0	27.8	29.4	27.4	26.6	28.4

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Table 9. Number of poor families that can be delivered from poverty through contributions from the average savings of a high-income class family:
2000, 2003, and 2006

Variables	2000	2003	2006
Total savings of the high-income class (in pesos)	138,079,279,606	54,519,525,631	28,324,643,353
Magnitude of high-income class families	51,160	25,849	19,738
Total additional income needed by the poor to be non-poor (in pesos)	85,721,988,729	83,844,346,820	121,696,441,433
Annual per capita poverty threshold (in pesos)	11,458	12,309	15,057
Income gap (in percent)	29.1	28.7	28.8
Magnitude of poor families	4,146,663	4,022,695	4,677,305
Average family size of poor family	6.2	5.9	6.0
Average additional income needed by a poor family to be non-poor (in pesos)	20,673	20,843	26,018
Average annual savings of high-income class families	2,348,554	1,099,840	1,192,657
Number of poor families that can be delivered from poverty through contributions from the average savings of a high-income class family:
Contribution of 10% of the average savings of a high-income class family	11	5	5
Contribution of 20% of the average savings of a high-income class family	23	11	9

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey of the National Statistics Office

Table 10. Significant predictors of income of the high-income class:
2000,2003, and 2006

		2000		2003		2006
Adjusted R-square		52.38		46.73		42.2
Number of significant variables		9		9		3
Variable		Coef.	P>t	Coef.	P>t	Coef.	P>t
Label	Description
hhld_less_1	Household member less than 1 yr old	-0.226	0.002
hea_colgr	Household head college graduate	0.316	0.002
hea_njob	Household head no job/business	-0.602	0.006
hea_gov	Household head works as Corporate Executive, Manager, Corporate Executives, Managers, Managing Proprietors and Supervisors, Official of Government and Special-interest Organization	0.183	0.018	0.267	0.029	0.293	0.033
nemp_g2	Employed household members greater 3	0.541	0.000
hea_clerk	Household head works as clerk	-0.165	0.034
hou_own	House owned	0.658	0.000
air3	Ownership of more than two aircons	0.154	0.020	0.259	0.008	0.248	0.049
car2	Ownership of more than two cars	0.285	0.001	0.296	0.041	0.441	0.001
hea_empown	Household head is an employer in his own family-operated farm or business			0.467	0.010
w_nojob	Household head's spouse is not employed			-0.989	0.000
hhld_less_7	Household member less than 7 yr old			-0.279	0.016
hou_rent	House rented			-0.876	0.000
urbhh	living in urban area			0.387	0.005
hea_post	postgraduate			0.573	0.009
_cons		14.044	0.000	15.328	0.000	13.825	0.000

Source: Special computations made by the NSCB Technical Staff using the results of the 2000, 2003, and 2006 Family Income and Expenditures Survey and Labor Force Survey of the National Statistics Office

Posted: 15 June 2010.