TOTAL FAMILY INCOME AND EXPENDITURES ESTIMATED AT P1.748 AND P1.061 TRILLION, RESPECTIVELY IN 1997

Total family income in 1997 was estimated at P1.748 trillion increasing by 64.8 percent over the P1.061 trillion in 1994. This is equivalent to an annual growth of 18.1 percent.

The total family expenditures reached P1.413 trillion, which was higher by 63.7 percent over the P863 billion in 1994. On an annual basis, this growth averages to 17.8 percent.

Adjusting for the inflation incurred between 1994 and 1997 with the 1994 prices as the base year (computed from the consumer price index [CPI]) , total family income grew by 32.0 percent while total family expenditures moved up by 31.2 percent. This corresponds to an average increase of 9.7 percent and 9.5 percent per year, respectively .

 
BOTH AVERAGE INCOME AND AVERAGE EXPENDITURES POSTED AN ANNUAL GROWTH OF ABOUT 14.0 PERCENT

The average income of Filipino families was estimated at P123,168 in 1997, yielding an increase of 48.1 percent compared to the 1994 level of P83,161. This translates into an annual growth of 14.0 percent.

Average expenditures increased from P67,661 in 1994 to P99,537 in 1997 posting a growth of 47.1 percent over the three-year period, which is equivalent to an annual growth of 13.7 percent.

Inflation-adjusted estimates also showed an increase of 18.7 percent in average income and a 17.9 percent growth in average expenditures between 1994 and 1997, or by 5.9 percent and 5.6 percent per year, respectively.

The increase in average expenditures was comparable with the personal consumption expenditure component of the National Accounts, which increased by 40.0 percent in nominal terms (vs. 47.1 % in the FIES), and by 17.4 percent in inflation-adjusted terms (vs. 17.9 % in the FIES).

 
AVERAGE INCOME IN URBAN AREAS INCREASED AT A FASTER RATE THAN IN RURAL AREAS

Average income in the urban areas increased by 57.5 percent from P113,121 to P178,121 while average expenditures went up by 54.7 percent during the same period.

Average income and average expenditures in the rural areas likewise increased at 37.1 percent and 39.5 percent, respectively, but at a much slower rate than the urban areas.

 
ALL REGIONS SHOWED INCREASES IN AVERAGE INCOME

All regions exhibited increases in average income between 1994 and 1997 both at current prices and at constant 1994 prices. The National Capital Region (NCR), Central Luzon and Southern Tagalog were still the top three regions in terms of average income posting estimates higher than the national average. Western Mindanao recorded the biggest increment in average income amounting to 71.9 percent (at current prices), improving its rank from 14th place (second to the lowest) in 1994 to 8th place in 1997. Eastern Visayas registered the lowest average income among regions at P67,772. This figure is however higher by 35.8 percent compared to its 1994 average income. The Caraga region posted the second lowest average income at P71,726, which was 35.4 percent higher than the 1994 value.

 
MEDIAN INCOME AND EXPENDITURES GREW

The median income in the country was estimated at P74,146 yielding an increase of 34.8 percent compared to the 1994 value. Median expenditure likewise grew by 39.0 percent during the same period.

Net of inflation, both estimates increased, with median income increasing by 8.0 percent (vs. average income growth of 18.7 %) and median expenditure growth by 11.4 percent (vs. average expenditure growth of 17.9 % over the three-year period.

 
INCOME DISTRIBUTION BECOMING MORE UNEQUAL

While average income showed a significant increase, the income decile distribution showed decreasing income shares of families from the first to the ninth decile. Only families belonging to the richest group, i.e., the tenth decile, registered an increase of 3.8 percentage points in their income share.

Nevertheless, average incomes of families from the first to the tenth decile increased between 1994 and 1997 but those in the higher decile groups yielded higher gains.

The above changes in the income decile distribution resulted in an increase in the Gini coefficient from 0.4507 in 1994 to 0.4872 in 1997 which indicates that the income distribution in 1997 became less equal (more unequal) compared to that in 1994.

In 1994, the average income of families belonging to the 10^th decile was about 19 times higher than the average income of families in the first decile. In 1997, this increased to 23.4 times.

All regions registered increases in the Gini coefficient with Western Mindanao showing the biggest increment from 0.3861 in 1994 to 0.4684 in 1997. This means that while posting the biggest increase in average income among regions during the same period, its income distribution became less equal (more unequal).

On the other hand, while families in Cagayan Valley had the lowest increase in average income, this translated in a low increase of 0.0074 in the Gini coefficient between 1994 and 1997.

 
SHARE OF FOOD EXPENDITURES DECREASED WHILE SHARE OF HOUSING EXPENDITURES INCREASED

The spending pattern of Filipino families continued to change towards less spending on food. In 1997, the share of food expenditures to total expenditures amounted to 44.2 percent, which was 3.6 percentage points lower than the 1994 proportion.

Higher spending on food consumed outside the home was also observed as the proportion went up from 4.2 percent in 1994 to 4.7 percent in 1997. On the other hand, the proportion of expenditures on food consumed at home went down from 43.5 percent to 39.5 percent during the same period.

Meanwhile, the share of expenditures on housing increased from 14.1 percent in 1994 to 15.3 percent in 1997; household furnishings and equipment, from 3.1 percent to 3.3 percent; transportation and communications, from 4.7 percent to 5.6 percent; taxes, from 1.4 percent to 2.5 percent and other expenditures, from 1.7 percent to 3.0 percent.

 
WAGES AND SALARIES MADE UP ALMOST HALF OF THE NATIONAL INCOME

Nearly half of the national income came from wages and salaries, with proportion to total income pegged at 45.6 percent in 1997 which was higher than the 44.0 percent share in 1994. Wages and salaries from non-agricultural sources increased from 40.0 percent to 42.2 percent while wages from the agriculture sector went down from 4.0 percent to 3.2 percent.

The percent share of income coming from entrepreneurial activities decreased from 27.7 percent in 1994 to 26.2 percent in 1997. Income from other sources which includes cash receipts from abroad and from domestic sources, family sustenance activities, net share of crops, and other sources of income also decreased from 28.3 percent to 28.2 percent of total family income.

 
AVERAGE SAVING INCREASED BY MORE THAN HALF OVER THE 1994 SAVING

The estimated saving this year amounted to P23,631 which was higher than last period's average saving of P15,500 increasing by 52.5 percent. Removing the effects of inflation this is equivalent to P18,935 a corresponding increase of more than one fifth or 22.2 percent.

Areawise, families in the urban areas showed higher saving both at current prices or inflation adjusted prices. In rural areas, however, netting out inflationary effect, average saving increased by only P41 (P9,097 against P9,056).

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