PIDS: Protect vulnerable middle class

AN institute for development studies has called for the protection of the "vulnerable" middle-class Filipinos, noting that near-poor Filipinos, or those just above the poverty line, continue to experience persistent poverty. The Philippine Institute for Development Studies (PIDS) made the call during its launch of the 22nd Development Policy Research Month (DPRM) recently, where it recommended actions to address the issue, which include social protection for the near-poor, inclusive growth policies, and building household resilience with disaster preparedness, financial access and market protections. With the theme, "Securing a Future for All by Growing a Resilient Middle Class," the DPRM revisits AmBisyon Natin 2040, which envisions the Philippines as "a prosperous middle-class society where no one is poor." PIDS senior research fellow Dr. Jose Ramon Albert, citing key insights from a study they conducted, "Wealth Creation for Expanding the Middle Class in the Philippines," described the middle-class household as typically comprising 3 to 4 members, with a monthly income between P24,060 and P144,360. Albert said that this segment represented around 39.8 percent of the population in 2021 and played a critical role in socioeconomic growth due to their access to higher education and income. However, he said there are threats to this growing demographic. "Many middle-class households have experienced job losses, reduced incomes, and increased expenditure on education and health," Albert said, warning that unless action is taken, these setbacks could hinder the middle class from fully contributing to inclusive growth. To address these concerns, he emphasized the need for a "comprehensive strategy to not only expand the middle class but also make it resilient against global megatrends that can exacerbate existing inequalities." The PIDS study, spearheaded by Albert and co-authors PIDS senior research fellows Dr. Roehlano Briones and Dr. John Paolo Rivera, suggested a four-pronged approach to achieve a sustainable transformation. This includes promoting social justice in natural resource management and climate action, harnessing new opportunities in trade and investments for MSMEs, ensuring a future-ready workforce and social protection, and improving digital governance and public service delivery. On the other hand, Undersecretary Rosemarie Edillon of the National Economic and Development Authority (NEDA), who served as one of the forum's discussants, identified key investment areas that can help fulfill the aspirations of the middle class. These include housing and urban development, agriculture, manufacturing, connectivity, financial services and tourism. "We must implement many more strategies so that they can better move up the social ladder," she said, while also highlighting the importance of social protection to ensure the welfare and sustained growth of the middle class. In discussing the broader governance implications, Daniela Braun, country director of the Konrad Adenauer Stiftung, pointed out that good governance is essential in empowering the middle class. "Good governance is not only a worthy goal in itself but also a means to achieve economic growth," she said, contrasting the effects of corruption in poorly governed countries with the trust and investment spurred by good governance. Marco Sardillo III, executive director of Asia Society Philippines, who underscored the apparent vulnerability of the middle class, likewise tackled the apparent vulnerability of the middle class, particularly during crises such as the Covid-19 pandemic. "The assumption is that the oligarchs are invested in our politicians, and they look after the poor. It is the middle class that is left to their own devices," Sardillo noted and urged both the government and media to raise awareness on middle-class issues, as a more informed population is better equipped to engage in its own development. "If more of us were aware of what is at stake when we talk about the middle class, then maybe we'll start taking these issues more seriously." The DPRM is held every year in September to promote and draw nationwide awareness on the importance of policy research in formulating evidence-based plans, programs and policies.