Institute calls for strengthening of vulnerable middle class

By Francis Allan L. Angelo

The Philippine Institute for Development Studies (PIDS) launched the 22nd Development Policy Research Month (DPRM) with a focus on fortifying the country’s growing but vulnerable middle class.

With the theme “Securing a Future for All by Growing a Resilient Middle Class,” the event highlighted the key role this demographic plays in economic growth, but also stressed its susceptibility to global challenges.

In a kickoff forum held at Novotel Manila, PIDS Senior Research Fellow Dr. Jose Ramon Albert presented the findings from the study “Wealth Creation for Expanding the Middle Class in the Philippines.”

Albert explained that the middle class, which makes up 39.8% of the population, is essential to driving socioeconomic development.

However, this group faces significant threats, including job losses, reduced incomes, and rising costs for health and education.

“Many middle-class households have experienced job losses, reduced incomes, and increased expenditure on education and health,” said Albert, adding that if these issues are not addressed, they could stifle the middle class’s contributions to inclusive growth.

The study, co-authored by Albert, Dr. Roehlano Briones, and Dr. John Paolo Rivera, proposed a four-pronged approach to ensuring a resilient middle class.

The strategy includes social justice in natural resource management, maximizing opportunities in trade and investments for MSMEs, developing a future-ready workforce, and enhancing digital governance.

Undersecretary Rosemarie Edillon of the National Economic and Development Authority (NEDA), who also spoke at the event, echoed these concerns.

“We must implement many more strategies so that [the middle class] can better move up the social ladder,” Edillon said. She pointed to key sectors such as housing, agriculture, manufacturing, and tourism as crucial for middle-class expansion.

NEDA Secretary Arsenio Balisacan, speaking at a related event during the 10th Annual Public Policy Conference, further underscored the importance of this demographic.

“The middle class plays a pivotal role as the engine of our nation’s economic growth,” he said, highlighting how their income, investments in education, and consumption of goods contribute to national development.

Balisacan also emphasized the importance of digitalization and climate action as global megatrends that could reshape the middle class’s future.

“We must promote skills development…to thrive in an innovative and globally competitive economy,” he added.

Speakers at the forum warned that without targeted policies, the middle class could struggle to recover from setbacks exacerbated by crises such as the COVID-19 pandemic.

Atty. Marco Sardillo III of Asia Society Philippines noted, “It is the middle class that is left to their own devices…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, held every September, highlights the importance of policy research in formulating effective, evidence-based strategies to support the country’s economic and social goals.