What do you think is the reason for this difference in common observation and official figures?
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This is the continuation of the Inquirer Interview. Click these links for the:
1st part: Are OFW’s the emerging middle class in the Philippines?
2nd part: OFW migration is natural. Is it?
QUESTION:
People I talk to easily accept the observation that OFW’s are the new middle class. They can feel it happening, and there are signs everywhere — more OFW’s shopping in upscale malls, more OFW’s investing their money and sending their children to the top three schools in the country. However, it appears that this is not yet manifested in government figures on income inequality (please see ADB’s latest study). What do you think is the reason for this difference in common observation and official figures?
RESPONSE:
What’s the difference between common observation and official figures? Two things:
I guess, it must be precisely what ADB is talking about on 2 “ Key Indicators… where they say that some government are not tracking or have a lot of difficulty tracking income and expenditures.
This could very well be an indication of a very active black market that’s why they don’t get to see the actual numbers.
If this is not what you’re asking “ please clarify your question.You know, my take on this inequality is this “ I agree with ADB, it’s seems to me that it’s no longer the rich are getting richer, rather after reading their studies, it looks more like the rich are getting richer faster than the poor. I do agree that when you have growth, there’s always the tendency for inequality to rise given the very competitive nature, there would always be people who would be left behind. It’s really a wake up call on both the government and those who are left behind. After all, it’s always the educated, the highly skilled that are rewarded the best.
However, did I miss something from this study? It didn’t seem to talk about the meritocracy which I believe is another driver of inequality.
THE STUDY: INEQUALITY IN ASIA: inequality-in-asia-highlights.pdf
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August 22nd, 2007 at 7:01 am
I think the inequality in the Philippines is also driven by its extremely regressive tax system. A consumption tax simply hurts the poor the most. The VAT is a type of consumption tax which at its current rate of 12 percent is really reducing the spending power of lower middle and lower classes. Think of it this way. When Lucio Tan buys a t-shirt his tax is the same as that of a day laborer making 200 pesos a day. Does that seem right? Does it seem equitable? The impact to Lucio Tan is simply far less compared to the day laborer.
The VAT has to go.
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August 22nd, 2007 at 3:27 pm
JHV! me tama ka! i missed that one! indeed! and the worst thing? did i hear na most rich people eh di naman talaga nagbabayad nang bwis? they hire the best cpa’s in the world para lang makaligtas sa mga taxes na yan!
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