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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, its 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: Whats 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?

Its 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 familys 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

9%

26%

PHP603,000

60%

56%

PHP191,000

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,