How Much Money Do Filipinos Need to Be Financially Comfortable? [Survey Data]

Last Updated – Dec 6, 2023 @ 1:02 pm

Quick Take

Most Filipinos need PHP 50,000 per month to be financially comfortable.

You may have already suspected that your wallet plays a pivotal role in your happiness. 

A recent study conducted by consumer website Expensivity shed light on the price tag of contentment. It revealed that for Filipinos, financial happiness comes at an annual cost of Php1.3 million

The figure for the Philippines is at the lower end of the spectrum when compared to other nations as it boils down to an average of at least P110,000 in monthly earnings (or $1,935).

But what do this study’s findings mean for the average Filipino striving for comfort and financial security? Let’s find out.

How much money do Filipinos need to earn each month to be financially comfortable?

Grit PH conducted an online survey to better understand the behavior and outlook of people on how much money they need to be comfortable in the Philippines. 

According to our survey, to feel financially comfortable, most Filipinos (28.4%) think they need about Php50,000 each month. 

But here’s the thing: the average monthly income in the Philippines, according to the Philippine Statistics Authority, is only around Php18,423 in 2022.

Considering both figures, the difference is significant. 

Many people feel they need more than triple the average income to be comfortable financially. This proves that most Filipinos are struggling to reach financial security and comfort given the current economic situation in the Philippines.

Related: How to Increase your Income


How many Filipinos feel they are financially secure?

When asked about their current financial security in the same Grit survey, a significant 75.8% of Filipinos expressed that they don’t feel financially secure based on their present finances.

Looking ahead, when asked if they believe they’ll achieve financial security in the next 5 to 10 years, more than 1 in 5 or 25.7% of Filipinos feel it’s unlikely they’ll ever attain financial security within that time frame.

These numbers reflect a common concern among the population regarding their future financial stability.


How many Filipinos live paycheck to paycheck? 

A study from Bangko Sentral ng Pilipinas discovered that 63% of Filipino households have no savings. This means most of them are living paycheck to paycheck. It’s not only low income causing this – it’s also how they manage their money. 

Data from the Grit survey also suggests when asked if respondents are able to save 10% or more of their monthly income, 52.5% said yes, and 47.5% said no.

Making 47.5% of Filipino adults live paycheck to paycheck.

This is a concerning statistic especially because saving at least 10% of your income is a basic financial rule of thumb.

When unexpected things happen, such as an illness or accident, people who live paycheck to paycheck don’t have any savings to fall back to.

This leaves them in a tough spot, scrambling to make ends meet. Usually, they result in taking high-interest loans from loan sharks which can put them in a cycle of debt


Where do Filipinos spend most of their income?

The majority of income is spent on essential needs: nearly half goes towards food and groceries at 45.4%, while housing takes up 12%. Meanwhile, a big amount is dedicated to managing debts (13.3%) and education (12.7%).

Food & Groceries45.4%
Debt Payments13.3%
Education12.7%
Housing12%
Savings, Insurance, & Investments8.9%
Healthcare3.2%
Shopping & Personal Care2%
Transportation1.6%
Entertainment & Recreation0.8%

Savings, insurance, and investments (8.9%) are also a priority, and smaller percentages make up expenses for healthcare (3.2%), shopping and personal care (2%), transportation (1.6%), and entertainment and recreation (0.8%).


Cost of Living in the Philippines

The cost of living in the Philippines is largely based on family size and location. For a family of four, the estimated monthly living expenses, excluding rent, amount to around Php107,498.

Meanwhile, a single person’s estimated monthly expenses, excluding rent, is significantly lesser at around Php31,013.1

Comparatively, the cost of living in the Philippines is approximately 59.4% lower than in Singapore. Rent is significantly lower, averaging about 89.8% less in the Philippines compared to Singapore.

In major cities like Quezon City, Cebu, Manila, and Davao, the cost of living indices also vary. For instance, Quezon City has a cost of living index of 39.7, followed by Cebu at 38.6, Manila at 37.2, and Davao at 35.6.


Average Household Income in the Philippines

As of 2021, the average income of a family in the Philippines is PHP 307,190 per year (PHP 25,599 or $457 per month).2

This is only half of the amount that most Filipinos need to feel financially secure (PHP 600,000 per year based on our study).

The average expenditure for a Filipino family is PHP 228,800 per year.


Social Classes in the Philippines – What Net Worth Puts You in Upper, Middle, and Lower Class in the Philippines?

Social class is a form of social stratification that categorizes people in a society into different groups based on various factors, primarily economic status, but also including education, occupation, and sometimes ethnic or cultural backgrounds.

Social ClassMonthly Income
Lower Class
Poorless than Php12,082
Low-Income Class (but not poor)up to Php 24,164
Middle Class
Lower Middle-Income ClassPhp 24,164 – Php 48,328
Middle-Income ClassPhp 48,328 – Php 84,574
Upper Middle-Income ClassPhp 84,574 – Php 144,984
Upper Class
Upper-Income Class (but not rich)Php 144,984 – Php 241,640
RichPhp 241,640 or above

These classes often imply a certain level of social status or prestige and can significantly influence an individual’s opportunities, lifestyle, and the way they are perceived by others.

Key Aspects of Social Class

Criteria for determining Social Class in the Philippines often include:

Net worth

Net worth is one of the most significant factors in distinguishing social class. It involves a person’s total financial wealth, taking into account all their assets, including cash savings and investment, as well as their liabilities such as debt.

Wealthy individuals tend to have an advantage over those with lower incomes since they have the resources to invest their money and use it to purchase items or services that may not be available to others or to access exclusive opportunities.

Education

Education is the cornerstone of any society, and not surprisingly, it plays a major role in determining social class.

People in higher social classes typically have access to better educational opportunities, such as private schools and universities both local and abroad.

These institutions offer high quality education, teaching materials, and resources that can provide students with the skills needed to stand out in the professional world and achieve success.

Education also gives people the opportunity to develop their knowledge base by taking interesting courses or learning new languages—all of which can help bring them closer to achieving their goals.

Occupation

Occupation helps individuals get a sense of identity, purpose, and even status in society. Generally, higher-paying jobs tend to be associated with higher social classes, while lower-paying jobs are associated with lower social classes.

People who have higher-paying jobs may also have access to better lifestyle perks, which can help them advance more quickly than those who do not.

Additionally, occupation gives people the opportunity to network and make valuable connections that could open doors for them in the future.

For example, someone who works as an executive at a large corporation may have more opportunities to network with other high-level executives and build relationships that could lead to future career advancements or business opportunities.

Land ownership

Owning land and property is a symbol of wealth and prestige. It provides individuals with a steady stream of rental income or the opportunity to develop the land for commercial or residential purposes.

Filipinos who own lands or commercial properties are typically considered to be in the upper class, while those who own smaller properties or do not own any land at all are considered to be in the lower classes.

Lifestyle and Consumption Habits

People’s consumption habits are often seen as a reflection of their financial standing and their priorities in life.

Those who can afford to buy luxury goods such as designer clothing, expensive cars, and high-end electronics are typically considered to be in the upper class.

In contrast, those who have more modest consumption habits and prefer to save their money or invest it in other ways are typically considered to be in the middle or lower classes.

Family background

People who come from wealthy families often have access to more resources – whether it’s money or connections.

This privilege makes it easier for them to advance in society.

They may also have inherited wealth or received financial assistance from their family members to start their own businesses or invest in lucrative opportunities.


Lower Class

The lower class in the Philippines covers Filipinos facing economic hardships, and limited access to resources, and basic amenities.

Typically, they struggle to meet daily living expenses, have limited education. They may also deal with lack of job security.

Estimated Net Worth Range

Poor

Filipinos who fall into this category typically earn an income below the officially recognized poverty line in the Philippines, which is less than Php12,082 per month.

They often struggle to meet basic needs and may lack access to essentials such as adequate food, shelter, and healthcare.

Low-income class (but not poor)

Those within the low-income class earn incomes that fall between the poverty line, and earns up to Php 24,164 per month.

While they may not be considered poor according to the official poverty threshold, they still face financial constraints and might have limited resources for savings or investments due to their modest income levels.

Common Occupations and Sources of Income

Individuals in the lower class often engage in jobs such as informal laborers, street vendors, and service industry roles.

Their income sources might include daily wage labor, domestic work, or occasional jobs without stable contracts.

Challenges Faced by Individuals in this Class

Lower class individuals in the Philippines face a myriad of challenges that can make it difficult for them to escape their social class.

One of the biggest challenges they face is limited access to education and training opportunities, which can make it difficult for them to acquire the skills and knowledge needed to secure higher-paying jobs.


Middle Class

The middle class is a more stable economic group with access to some resources and a moderate standard of living. They have more financial stability than the lower class. However, they are not as affluent as the upper class.

Estimated Net Worth Range

Lower Middle-Income Class

Individuals who belong to the lower middle-income class earn incomes that range from two to four times the official poverty line, which is between Php 24,164 and Php 48,328.

They have gone past the poverty threshold, but it’s still common for them to face financial problems.

Middle-Income Class

The middle-income class are people with earnings ranging from Php 48,328 to Php 84,574.

They have an established financial well-being and have a reasonably comfortable standard of living and increased access to resources.

Upper Middle-Income Class

These people earn Php 84,574 to Php 144,984, and have greater financial stability. They also enjoy better access to a range of amenities, investments, and a more luxurious lifestyle compared to lower middle-income groups.

Common Occupations and Sources of Income

Members of the middle class usually work in mid-level professional roles, such as teachers, office staff, nurses, small business owners, and managers. They have regular salaried jobs or own small businesses.

The rise of the middle class and its significance in the Philippines

40% of the Philippine population belong to the middle class.3

As the middle class in the Philippines continues to grow, so does its significance in society. With more access to education, resources, and stable employment opportunities, the middle class is becoming a driving force in the country’s economy and social landscape.

Many in the middle class are taking advantage of their improved financial stability to invest in property and land ownership, which they see as a symbol of wealth and prestige.

As a result, the real estate market is thriving in urban areas, with new commercial and residential developments popping up all the time.


Upper Class

The upper class in the Philippines consists of those with significant wealth, influence, and access to exclusive resources and opportunities. They often have multiple sources of income and substantial assets.

Estimated Net Worth Range

Upper-Income Class (but not rich)

People in this category are not classified as rich. They typically earn between Php 144,984 and Php 241,640 a month.

As expected, this group enjoys a higher financial standing compared to the middle class but hasn’t yet reached the level of the wealthiest in society.

Rich

The ‘rich’ segment are people with an income of Php 241,640 or above. These individuals are considered the wealthiest in society.

They have substantial financial resources, multiple income streams, and the ability to afford a luxurious lifestyle. They wield significant financial influence and have access to exclusive resources and opportunities.

Common Occupations and Sources of Income

The occupations and sources of income for the upper class vary greatly since they often have multiple sources of income and substantial assets.

They may be entrepreneurs, high-level executives, or investors in various industries. Some may even come from wealthy families and inherit their wealth.


How much money do you need to be part of the top 1% in the Philippines

Picture 100 people lined up based on how much money they have. The first person in that line with the most money.

The “top 1%” is a very small group with a lot of wealth compared to everyone else. They have a big influence because of their money and own a big part of all the wealth in a country or the world. 

According to The Intelligence Lab at Knight Frank, a person needs $60,000 or Php 2.9 million in the bank to be considered among the one percent. This figure only accounts for liquid assets, such as cash and investments, and does not include real estate or other non-liquid assets.

For many Filipinos, reaching the top 1% seems like a distant dream. However, there are a select few who have managed to accumulate significant wealth and join this elite group.

Read Next: How to Build Wealth in you 20s

For those who do manage to achieve this status, the benefits can be enormous. The top 1% can easily access resources and opportunities that may not be available to anyone else. Maintaining this status is a priority to maintain their position of power and influence in society.

Sources

  1. Numbeo
  2. Philippine Statistics Authority
  3. Philippine Institute for Development Studies

About MJ de Castro

MJ de Castro is the lead personal finance columnist at Grit PH.

MJ started her career as a writer for her local government’s City Information Office. Later on, she became a news anchor on PTV Davao del Norte.

Wanting to break free from the shackles of her 9-to-5 career to live by the beach, she pursued remote work. Over the years, she has developed a wide specialization on health, financial literacy, entrepreneurship, branding, and travel.

Now, she juggles writing professionally, her business centering on women’s menstrual health, and surfing.

Education: Ateneo de Davao University (AB Mass Communication)
Focus: Personal Finance, Personal Development, Entrepreneurship, & Marketing

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