Is there income mobility in the Philippines?

Despite a more robust economic performance over the past decade compared with the 1980s and 1990s, growth in average household income is still far below what might be expected given the pace of economic expansion in the Philippines. Inequality of household income has also remained high, which leads to the question: is there income mobility in the Philippines? Using longitudinal data from three years of the redesigned Philippine Family Income and Expenditure Survey (2003, 2006, and 2009) and a variety of analytical tools, we examine the mobility of Filipino household income and show that it is less stagnant than is conventionally perceived. Empirical evidence suggests that significant positive and negative mobility exists; albeit, the two tend to offset each other, contributing to slow household income growth at the aggregate level. In addition, there is some evidence that transitory fluctuations contribute significantly to the observed level of income mobility. Overall, the findings are robust across different analytical tools used in measuring income mobility.