A “decent income” for a family of five would be Php42,000 a month, says Ernesto Pernia, the Socioeconomic Planning secretary and National Economic and Development Authority (NEDA) director-general.
This statement was made after NEDA Undersecretary Rosemarie Edillon gave Php10,000 as a hypothetical figure for a family’s monthly budget to show the effects of inflation, which received a lot of flak including from senators, labor groups, and parents.
“I think roughly Php42,000 a month would be a more decent income, at least to live above the poverty line,” Pernia told GMA News Online.
The amount assumes that two family members are earning Php21,000 each a month, which is tax exempt as per the Tax Reform for Acceleration and Inclusion law.
However, in a report by the Philippine Statistics Authority, in 2015, the average monthly income of a Filipino family was at an estimated Php22,000 — just half of the Php42,000.
Yet, according to a 2016 survey conducted by NEDA, a family of four will need a gross monthly income of Php120,000, to live a “simple, comfortable life.” This NEDA report said the amount will allow a family to live in a medium-sized house, own a car, travel occasionally, and send two children to college.
At Php120,000 — more than five times the average monthly income of a Filipino family and almost three times the “decent” income example — both parents need to earn at least Php60,000 each per month.
Former NEDA director-general Emmanuel Esguerra clarified that the Php120,000 is meant as a goal for the Philippines by 2040, which is 22 years from now.
“This is not meant to be prescriptive. This is just saying where Filipinos want to go, and the trade-offs. This is a vision.”
In Smart Parenting Magazine’s September 2015 issue, we estimated that it would take at least Php5 million to raise a child in Metro Manila.
A parent also needs need to start setting aside at least Php150,000 yearly to send a child to a good and reputable college, says financial adviser Cristin Tan. She estimated that tuition fees will rise to Php611,000 annually 18 years from now. To cover the four years of college, you will need a total of around Php2.4 to 2.8 million.
For hardworking parents, Alvin Ang, Ph. D., professor of economics at the Ateneo de Manila University, gave a few words of comfort. “Since the Philippine economy is getting better now, babies born around this time will grow up enjoying lower costs compared to the income that their parents will be earning.”