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THE government is using the billions it earns from
the value-added tax on petroleum and other fuel products to
subsidize electricity, fuel, and LPG. Lifeline electricity consumers
have been lining up at selected branches of the LandBank of the
Philippines to get a one-time P500 subsidy on their electricity
bills. The queues are long, and the subsidy is offered on a
first-come, first-served basis.
As oil firms continue to hike
fuel prices—they pushed past P60 a liter last week heading it
seems unimpeded towards the P70 per liter level—there is more talk
about subsidies coming out of the Vat windfall.
There’s talk of a P300 billion
plus Ahon Pamilya program for the poorest in the countryside. The
government also promises to expand the subsidy on electricity to
about two million consumers in the rural areas who are serviced by
electric cooperatives. A few weeks ago, President Arroyo also signed
into law the bill exempting minimum wage-earners from paying income
taxes.
All these policies and programs
are meant to lighten the economic burden of the poor, or the poorest
of the poor. But the truth is, it is not only the poor who are
suffering from the ever-increasing prices of basic commodities and
services. There is also the middle class, or shall I say, the
vanishing middle class, because a lot of them are also being driven
into borderline poverty.
Actually, runaway inflation
affects everybody, even the rich, but the rich can fend for
themselves. Even if they take a hit, as they say in the vernacular,
mahaba ang kanilang pisi. But what is the government doing to help
the middle class who are not qualified for the government subsidies
and other programs which target only the poorest?
We don’t need any studies to
determine what has happened to the middle class in Philippine
society. Just a practical comparison between the middle class life
of today and at least 20 to thirty years ago would show you middle
class life is not as it was. During the 70s an ordinary salaried
employee, a husband for instance, could afford to work all by
himself, with his wife able to take care of the no less daunting
task of running a home. He could afford a house in a good
neighborhood, and could send his kids to good schools without any
worries. He may have a car or two in the garage. Every weekend he
could take his family out to the movies and meals after, or maybe
even shopping. He would have a tidy nest egg for a comfortable
retirement.
If you talk about those things
today, you are talking about the life of a rich man, because an
ordinary salaried working guy won’t be able to afford those
“luxuries” anymore. The ordinary salaried employee today is too
busy eking out a living to enjoy the life his predecessor did. Or
maybe they belong to different classes altogether.
The middle class family today
would have both husband and wife working and their combined income
would probably be just enough for their needs. They would probably
need to borrow to pay for their kids’ tuition, borrow more to be
able to afford a house, and that’s if they’re lucky. Most
probably rent. If they have any savings at all, these have probably
been eaten up by inflation a long time ago, especially now when
inflation is at its highest in almost a decade.
If we go by statistics, a recent
study by the Nationals Statistical Coordination Board (titled
“Trends and Characteristics of the Middle Class in the
Philippines: Is it Expanding or Shrinking”) found that in a span
of six years, from 1997 to 2003, close to four families of every 100
middle-income families have been lost to the low-income category.
Middle-income, by the NSCB definition, are those families with a
total annual income ranging from P251,283 to P2,045,280.
With the current economic risks
and the rising cost of everything, there may be more families who
cannot even earn enough to make it into that range, or even if they
are, they would be at the low end of that range. What they call
middle class today may be just on the higher end of poor. And, if
true, we just have rich and poor in society, in varying degrees.
When the NSCB study came out,
there wasn’t any government subsidy yet coming from the Vat on oil
windfall, but NSCB Executive Director Dr. Romulo Virola hit the nail
on the head when, referring to the results of the study, he said:
“For a country to be truly and sustainably prosperous there must
be a broad-based middle class . . . that has the knowledge, the
skills and the resources to foster economic growth and help generate
employment for the poor. But so far, the poverty reduction programs
we have crafted have focused mainly on being ‘pro-poor’,
‘anti-poverty’, helping the ‘poorest provinces’ etc. We seem
to have completely ignored the needs and the strategic importance of
building and expanding the middle class of Philippine society.”
It would be a most laughable
government strategy to wait for middle class families to become poor
to qualify them for government subsidy programs. 
ernestboyherrera@yahoo.com
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