Filipino Family Income and Expenditure
Justin Chua, Melody Go, John Legaspi, Francine Sia and Sean Yuhico
It has recently been tough for a majority of people to earn money for their families due to the current situation happening with COVID-19. It’s even affected a vast majority of families here in the Philippines. With the country still in quarantine, a lot of people had to adjust and deal with the problems of not working. This raises the question of how big of an impact the quarantine has on Filipino families and their income and if Filipino families were able to support their families properly even before all these quarantines. One way to look at this is by seeing how families earned and spent their money in years prior to the pandemic, in order to see if the general household income in the Philippines was enough to support a normal lifestyle back then. This will be useful in clearing things up and showing if the Filipino families were way better off back then, or if they were already struggling to deal with their finances in the past. To help with this, a dataset on Filipino Family Income and Expenditure will be used to give data and insight into the matter.
Filipinos that live in the rural areas may have different ways of living to those people who are in the urban areas. With that being said, the jobs or businesses that are available in rural and urban areas will also vary. This leads to the question: “What are the major sources of income that are prominent in each region?” With this, it could be seen if households in each specific region rely on their jobs or if they have their own business. After seeing the main sources of income of each region in the Philippines, another interesting thing to see is which regions have the families with the highest income?. This could show what main sources of income could support households the best or maybe in which region may potentially provide the best income for families. With this, it is also interesting to see which regions have the families with the most expenses, and if there is any relationship between regions with higher income, with their expenses. Lastly, knowing which source of income provides the best for family expenses is also important, these could tell if having wage or salary is enough to provide for the household or having other sources of income is better.
Key Findings
The dataset contained data of more than 40,000 different families in the Philippines. We started by examining the individual variables of the dataset to see if there are significant findings starting with the regions.
There are 17 regions in the Philippines, Figure 1 shows that among these 17 regions, CALABARZON and NCR have the highest number of families residing in the region, with over 4,000 families.
After we examined the regions, we took a look at the families’ income since this is one of the focuses of this project. The income ranges from Php 10,000 to as high as Php 500,000, because of this, it would be hard to explore the income data in numbers, we classified them into Rich, Upper Income, Upper Middle Income, Middle Middle Income, Lower Income, and Poor based from the Philippine Institute for Development Studies.
We can see that out of the 40,000 families, almost 16,000 families are considered as Poor and the count decreases as the classification gets higher in income.
Since the majority of the families were considered as Poor, we wanted to see if it has a correlation with the region in which the family is residing in.
As seen in Figure 3, every region has a unique distribution of the income classes. In almost all regions, majority are Poor, however, we can see that NCR has the least number of Poor families.
After examining which region has the families with the highest income, we examined which sources of income are prominent in each region to see if there is a correlation.
We can see that NCR and CALABARZON are standout regions because unlike other regions wherein the sources of income are not too far apart, we can see that there are a lot of families in NCR and CALABARZON whose main source of income is Wage/Salaries, which is more than double of the second highest source of income. We can also see that among all regions, ARMM is different, all the other regions have Wage/Salary as the most prominent source of income while ARMM has Entrepreneurial Activities as the most prominent source of income.
We talked about income, now lets talk about expenses. We first wanted to take a look at which region has the most expenses.
Although the graph may be a little hard to comprehend at first glance, there is an obvious peak at around the 200 mark which represents Php 200,000. From this we can say that there are a lot of families regardless of their region that spend around Php 200,000. Another notable finding is that as the expenses increase, the count decreases, however, there is a region that is slightly above the rest, which is NCR. Now we ask the question, are the families earning enough to cover their expenses?
With the income and expenses in mind, we were curious to see what source of income could provide best for the family.
The graph shows the Sources of Income vs the number of families that are able to cover their expenses. As we can see, Wage/Salaries has the highest count, with both Entrepreneurial Activities and Other sources of income not reaching half of this number. However we must also take note that the dataset contained more than 40,000 families while this graph only shows us around 3,000 families. Does that mean more than 30,000 families can not sustain themselves through their source of income?
Taking note of the 30,000 or more families not seen in Figure 6, we tried to compare the number of families whose income is larger than their expenses against the families whose income is smaller than their expenses
The graph shows each source of income as 100%, with the lighter side representing the families whose income is larger than their expenses, and the darker side representing families who are not able to cover their expenses with their income. Sadly, all three sources of income have less than 20% of the families who are able to sustain themselves. We can also see that although Wage/Salaries had the highest number of sustained families, there are far more people who have this as their main source of income that cannot cover their expenses.
With the majority of the families not being able to sustain themselves, we were also concerned about how much these families were lacking in order to compensate for their expenses, so we decided to take a look at the negative incomes. In order to do this, we subtracted the expenses from the income. If the result is negative, then it means that the family is not able to sustain themselves through their income.
Figure 8 shows the negative income families, the graph represents the negative income through its absolute value. We can see that there are also around 300 families whose income is just enough to cover their expenses. We also notice that most of the families who can’t sustain themselves lack around Php 100,000 in order to cover all of their expenses. Additionally, the average negative income across the dataset is Php 116,910.96.
Conclusion
After going over the data, it’s clear that Filipino families are struggling to ensure that they are able to support their lifestyle. With only 3,674 families out of a dataset of over 40,000 families, a majority of which are located in the NCR, has an income higher than their expenses. It’s seen through the different sources of income as well, with less than 20% of families in the different sources of income being able to have higher income compared to their expenses. This might lead one to wonder if people are not making enough, or if they are just spending too much which leads to this low number of families being able to support their families properly. Whatever the case may be, this is indeed a problem. Seeing that families back then already struggled to support themselves before COVID, and now that we’re living in a quarantined community, it’s not hard to imagine how much harder it is for everyone to support their families right now with sources of income becoming harder to come by.