PIDS outlines strategies to build a stronger middle class

The Philippine Institute for Development Studies (PIDS) has outlined a comprehensive strategy to address challenges and opportunities in building a predominantly middle-class society in the Philippines. In its Economic Policy Monitor 2023-2024: Wealth Creation for Expanding the Middle Class in the Philippines, the think tank emphasized the need for an integrated approach involving social justice, trade and investments, workforce readiness, and improved digital governance.

Promoting social justice requires strengthening community-based resource management and ensuring equitable access to natural resources for local communities. PIDS suggests investing in sustainable livelihoods and value chain development in areas like agroforestry, ecotourism, and fisheries to help resource-dependent communities transition sustainably, particularly in light of climate change challenges.

Expanding trade and investment opportunities involves empowering micro, small, and medium enterprises (MSMEs) to access global markets. This includes strengthening export promotion programs, providing trade financing, and offering market intelligence to help MSMEs overcome barriers to internationalization. The goal is to create growth opportunities in high-potential sectors such as electronics, food, and services.

To prepare a future-ready workforce, the report calls for significant investments in quality education and skills training tailored to labor market demands, especially in STEM and digital skills. Strengthening partnerships between industries and academic institutions, along with promoting work-based learning programs like apprenticeships, can improve employability. Additionally, PIDS advocates expanding social protection for gig and informal workers through initiatives like the SSS Reform Act and the Unemployment Insurance Scheme.

Improving public service delivery and digital governance is also critical. PIDS recommends accelerating investments in digital infrastructure, particularly in underserved rural areas, to ensure equitable access to digital services. The implementation of the PhilSys national ID system can enhance the targeting and efficiency of social protection programs, while promoting financial inclusion. Furthermore, digital literacy programs for government workers and marginalized communities are essential for bridging the digital divide.

The recommendations highlight the need for political will, sustained investments, and close collaboration among stakeholders, including government agencies, the private sector, civil society, and development partners. Effective implementation will also require evidence-based policymaking, regular monitoring, and a commitment to adapt strategies based on outcomes and evolving needs.

PIDS acknowledges that these recommendations are not exhaustive but form the foundation for creating a stronger and more inclusive middle class. It emphasizes that achieving this vision will depend on strong leadership and a long-term perspective, prioritizing investments in human capital, institutions, and infrastructure despite competing priorities.

By establishing comprehensive policies and programs across these key areas, the Philippines can build a resilient and inclusive middle class. This, in turn, can drive sustainable and equitable development, ensuring long-term benefits for society.