Trickle effect dries up

Beyond the economic indicators, it appears that most Filipinos have ceased to enjoy the benefits of the much-vaunted steady growth of more than 5 percent, which on the surface remains impressive compared to the rest of the world.

A recent Social Weather Stations survey showed that 50 percent of respondents rated themselves as poor.

The official number that the government promotes is hard to believe — about 13 percent poverty incidence for the entire country, which economic officials vow to bring down to a single digit before President Ferdinand Marcos Jr. steps down.

Perception beats the deceptive numbers for the majority of Filipinos who suffer from extreme wealth inequality or “growth without inclusion,” as independent economists term it.

Economic benefits are concentrated among the top 10 percent of the population, leaving the bottom 50 to 60 percent with stagnant wages amid shrinking purchasing power.

The government sets a poverty threshold of P13,873 in income for an average family of five, which works out to a little more than P92 per family member per day. That is insanely low.

A family income within the government’s poverty threshold ends up with a monthly deficiency that usually results in debts, considering basic expenses of P8,000 for rent, P2,500 for 50 kilos of rice, P3,000 for utilities and transport, and P2,000 for education.

Based on the self-assessment of families, 14.2 million households in September 2025 considered themselves as having a marginal income.

The rich captured most of the benefits from growth, leaving half the population feeling poorer even as they technically escaped the government’s poverty line.

Indicators showed the top 10 percent of the wealthy collect 36 percent of the nation’s total income.

Data from the Philippine Statistics Authority showed that the bottom half of the population scrambles for 19 percent of total income.

Billionaires’ wealth totaled P5.1 trillion based on the latest figures from the business magazine Forbes — a 25 percent increase since 2021.

The wealthiest 50 Filipino families also account for about 30 percent of gross domestic product, according to the social watchdog Oxfam.

The trickle-down effect is not happening, primarily because of the low labor share in generating GDP — about 38 percent in the country compared to 55 percent in Thailand.

This means that the vast number of working-age Filipinos, or what the government has been boasting as the demographic sweet spot, are not employed.

Among those with jobs, 40 percent are in the informal or low-skill sector, which offers less than subsistence pay.

One of the characteristics the Philippines adopted from the United States is income inequality, but with a GDP per capita that is only a tenth of the United States’, inequality hurts Filipinos more.

The lack of economic inclusivity is glaring: Ten families control 75 percent of listed firms; 1 percent own 40 percent of farmland, which are the sources of high tenancy and low rural wages; while the tax system is very regressive, hitting the poor hardest.

The most significant source of wealth among families remains sending a member abroad, as remittances continue to boom at P2.1 trillion a year.

Lacking government-initiated financial education, families spend 60 percent of the money from abroad on consumption, not investment.

Income disparity boils down to the leadership’s disconnect with the real situation in the country.