Highest Income Earners Continue To Contribute More Than One-Third To The Income Of All Families (Final Results from the 2006 Family Income and Expenditure Survey)

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Friday, January 11, 2008


Filipino families earned a total of P3.01 trillion in 2006 according to the final results of the 2006 Family Income and Expenditure Survey (FIES). Distributing this total annual income among the estimated 17.4 million Filipino families in 2006 resulted in an average annual family income of approximately P173 thousand. The total annual family expenditure was approximately P2.56 trillion, or P147 thousand per family on the average (Table 1).

Considering the inflation between 2003 and 2006, the total family income in 2006 would be valued at P2.18 trillion at 2000 prices. Likewise, the total family expenditure in 2006 would be valued at P1.86 trillion at 2000 prices. In real terms, the total income of families increased by 8.5 percent while the total expenditure increased by 10.5 percent between 2003 and 2006 (Table 1).

The total family income of the tenth decile of families, or the richest ten percent, was estimated at P1.08 trillion which is 36.0 percent of the total family income in 2006. This is slightly lower than their share of 36.3 percent or P0.88 trillion in 2003. Furthermore, a narrowing of the gap between the tenth and first deciles was likewise seen in 2006. The total family income of the tenth decile in 2006 was about 19 times that of the first decile, while it was 20 times that of the first decile in 2003 (Table 2a). Income decile is the distribution of families into ten groups in terms of annual family income. The first decile has the lowest income and tenth decile has the highest income.

The 2006 FIES also provides estimates of family income and family expenditure at the regional level. Across regions, NCR recorded the biggest share to the total annual family income (P734 billion) with about one-fourth of the total annual family income for the entire country, while ARMM had the smallest share with 1.6 percent (P47 billion) (Table 3a).

All regions showed increases in the average annual income between 2003 and 2006 at current prices. The National Capital Region (P311 thousand), CALABARZON (P210 thousand), Central Luzon (P198 thousand) and Cordillera Administrative Region (P192 thousand) are still the top four regions in terms of average income, posting estimates higher than the national average (Table 4a). Adjusting for the inflation between 2003 and 2006, the annual average income of NCR families would be valued at P221 thousand, CALABARZON at P153 thousand, Central Luzon at P147 thousand and CAR at P137 thousand (Table 4b). The Autonomous Region in Muslim Mindanao registered the lowest average annual income among regions (P89 thousand at current prices). This figure is however higher by 6.9 percent compared to the region?s 2003 average annual income of P83 thousand (Table 4a).

The Gini coefficient or the measure of income equality within a population was estimated at 0.4580 in 2006. This figure is slightly lower than the 2003 ratio of 0.4605 (Table 5). A Gini coefficient ranges from 0 to 1, with 0 indicating perfect income equality among families, and 1 indicating absolute income inequality.

Six regions registered increases in the Gini coefficient indicating a movement towards a widening income disparity among families, with Central Luzon showing the biggest increment from 0.3515 in 2003 to 0.3994 in 2006. ARMM had the least income disparity with a Gini coefficient of 0.3113, which is even lower than its 2003 figure of 0.3578 (Table 5).

The 2006 Family Income and Expenditure Survey (FIES) is a nationwide survey of households undertaken every three years by the National Statistics Office (NSO). It is the main source of data on family income and expenditure, such as levels of consumption by item of expenditure as well as sources of income in cash and in kind.






  • The 2006 Family Income and Expenditure Survey (FIES) is a nationwide survey of households undertaken every three years by the National Statistics Office (NSO). It is the main source of data on family income and expenditure, which include among others, levels of consumption by item of expenditure as well as sources of income in cash and in kind. The results of FIES provide information on the levels of living and disparities in income of Filipino families, as well as their spending patterns.

  • The 2006 FIES is a sample survey designed to provide income and expenditure data that are representative of the country and its 17 regions. It used four replicates of the 2003 Master Sample (MS) created for household surveys on the basis of the 2000 Census of Population and Housing. The 2003 MS has been designed to produce the sample size needed for large surveys, like the FIES. To facilitate subsampling, the 2003 MS has been designed to readily produce four replicate samples from the full set of sampled PSUs.

  • In the 2003 MS, a stratified, three-stage sampling design was employed: the selection of Primary Sampling Units (PSUs) for the first stage, sample enumeration areas (EAs) for the second stage, and sampling units for the third stage. The domains are the regions which were stratified by province, highly urbanized city (HUC), independent component city (ICC), and other factors within the geographical strata. The overall sampling fractions vary across regions to generate adequate sample size for each region. Survey weights are used in order to produce valid estimates of the population parameter. Base weights are computed to compensate for the unequal selection probabilities in the sample design. These were adjusted to account for unit nonresponse and to conform to known population distributions (eg. projected population counts).

  • The 2006 FIES enumeration was conducted twice - the first visit was done in July 2006 with the first semester January to June as the reference period; the second visit was made in January 2007 with the second semester of 2006, that is, July to December 2006 as reference period. The same set of questions is asked for both visits.

  • The number of households/families for the 2006 FIES was estimated using the 2000 Census of Population and Housing (CPH)-based population projections and information from the 2000 CPH on the average household size by province.

  • The estimates from the 2006 FIES include results of the first FIES visit for the NCR based on the questionnaires recovered from the fire that hit the NCR?s Statistics Office on October 3, 2006. Damaged questionnaires were around 58 percent of the total questionnaires for the FIES first visit. Questionnaires that were encoded and processed covered around 42 percent of these questionnaires. In the preliminary results, values for the burned questionnaires were imputed using a ratio which requires data from the recovered questionnaires and data from corresponding questionnaires from the second visit. The ratio was computed by getting the sums of the total income and total expenditure in the recovered questionnaires from the first visit and the sums of the same data from corresponding second visit questionnaires and then by dividing the sums from the second visit by the sums from the first visit. The annual estimates on income and expenditure for NCR were computed by dividing the second visit values by the computed ratio. For the final results, the annual estimates for the NCR were computed by multiplying by 2 the second visit data. This imputation procedure was opted after it has been established that there was no significant difference between using the ratio and the multiplier ?2?.

  • The set of samples selected for the 2006 FIES is only one of the possible sets of samples of equal size that could have been selected from the same population using the same sampling design. Estimates derived from each of these sets of samples would differ from one another. Sampling error is a measure of the variability of the estimates among all possible sets of samples. It is usually measured in terms of the standard error for a particular statistic.

  • The standard error can be used to calculate confidence intervals within which the true value for the population can reasonably be assumed to fall. For example, for any given statistic calculated from a sample survey, the value of that statistic will fall within a range of plus or minus two times the standard error of that statistic in 95 percent of all possible samples of the same size and design.

Source:  2006 Family Income and Expenditure Survey (Final Results)
                 Income and Employment Statistics Division
                 National Statistics Office
                 Republic of the Philippines