Filipinos are often perceived globally as poor, and many Filipinos themselves believe their incomes and assets are small compared to the world average. One common complaint is that foreign companies in the Philippines take advantage of the low wages, paying Filipinos much less than they would pay in their home countries. But is it true that Filipinos don’t make much money, both in terms of income and assets? Let’s take a closer look at the data.
First, let’s talk about income. According to the Philippine Statistics Authority (PSA), the average annual family income in 2021 was around 307,000 Philippine pesos, or about $6,140 USD. Compared to developed countries, this is quite low. For example, the average wage in Germany is $58,940 USD, and in the US, it’s $77,463 USD. Even Japan, which has lower wages compared to Western nations, still averages $41,509 USD.
If we dig deeper into the data, the highest income earners in the Philippines are in the National Capital Region (NCR), where the average annual family income is 417,000 pesos (about $8,598 USD). While this is higher than the national average, it still pales in comparison to other countries. The city of Makati, the financial hub of the Philippines, has the highest average annual family income at 579,570 pesos ($11,928 USD). Although not very high by global standards, it is significantly better than the rest of the country. This highlights the vast inequality in the Philippines, where wealth is concentrated in urban centers like Makati, while the provinces lag far behind.
A report by the Philippine Institute for Development Studies shows that the wealthiest families in the country earn over 240,600 pesos per month (about $4,800 USD), amounting to $57,600 USD annually. Meanwhile, the poorest families have an average monthly income of just 12,000 pesos. This stark contrast between the rich and the poor emphasizes the inequality problem.
One important factor missing in these income comparisons is expenditure. While the average income in the US is much higher, so are the living costs. In 2022, the average US income was $94,003 USD, but the annual expenditure was also high at $72,967 USD. In contrast, Filipinos don’t need to spend as much to live. PSA data shows that the average Filipino family’s annual expenditure is 228,000 pesos, lower than the average income of 307,000 pesos. While living in the US offers better infrastructure, education, and job opportunities, it also comes with higher costs. However, even with these expenses, higher wages in Western countries generally provide a better standard of living.
The lower cost of living in the Philippines is partly due to cheaper labor, food, and housing. However, this also reflects lower productivity and standards compared to countries like the US. Additionally, while Americans benefit from cheaper imported goods, Filipinos struggle with the high cost of imported products like electronics, making them less affordable.
Now, let’s consider net worth. Credit Suisse’s Global Wealth Databook in 2022 shows that the average wealth per adult in the Philippines is $14,502 USD, while GDP per adult is $5,580 USD. There are 68,063 Filipinos with wealth ranging from $1 million to $5 million, and a smaller number of extremely wealthy individuals with over $500 million. This top 0.001% of Filipinos is quite affluent, even when compared to neighboring countries like Vietnam, which has fewer millionaires.
A report by Knight Frank predicts that ultra-high-net-worth individuals (those with more than $30 million) in the Philippines will increase by 35% between 2020 and 2025, indicating growing wealth concentration at the top.
However, a 2021 report from the Changing Wealth of Nations shows that the wealth per capita in the Philippines is $35,135 USD, which is much lower than neighboring countries like Singapore ($817,846 USD), Malaysia ($167,365 USD), and Thailand ($78,216 USD). Only Vietnam, with $34,084 USD, trails behind the Philippines.
So, are Filipinos rich? While there are certainly wealthy individuals in the country, the average Filipino is not particularly affluent compared to global standards. To improve this situation, the country needs to focus on boosting foreign investment, improving infrastructure, and, most importantly, investing in education. Better education will equip Filipinos with the skills needed to compete globally and drive the economy forward.