Defining and Profiling the Middle Class

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The middle class is crucial in society. With better educational attainment and savings, they hold critical roles in higher value-added sectors. They are also willing to pay for better-quality products and services, and their demands encourage investments in production and marketing, raising general income levels. This Policy Note profiles the Filipino middle class and examines how long it takes for the poor and low-income class to transition to middle-income class. Among others, it finds that less than half of Filipino households belong to middle class, who are generally urban dwellers. Although the middle-income class are employed in stable jobs outside agriculture, with household members working abroad, nonetheless, these do not make the middle class strongly resilient to risk as they also face issues in housing and low access to social services. The study likewise finds that, on average, it may take 18 years or even longer, in case of the poor, to transition to middle income. The study urges the government to reexamine its social protection policies and recognize that while the poor is most vulnerable to future poverty, even the middle class is vulnerable. It likewise calls for the improvement of access to affordable housing in the Philippines and sustainable management of safe water.