Filipinos 3rd lowest paid in APEC – WB data

Filipinos are the third lowest paid after Vietnam and Papua New Guinea among the 21-Asia Pacific economies top-billed by Americans, Japanese and Canadians as the groupings richest citizens, data from the World Bank (WB) showed.

The World Bank data only magnified the disparity in income among APEC countries, which adopted the theme “Building Inclusive Economies, Building A Better World” in this year’s APEC Leaders’ Summit.

Based on the data, Filipinos earned only $1,581 per capita in 2013 at constant 2005 US$ rate or just a mere 0.03 percent of the Americans whose earnings ranked the highest at $45,710.

Japanese followed as the second highest paid with $37,573 and Canadians with $37,528.

The data also showed that the Philippine salary per capita had been increasing from $993 in 1995 to $1,060 in 2000 and $1,200 in 2005 but the rate of increase was not enough to catch up not even with fellow ASEAN countries.

The data also showed wide income disparity in the ASEAN region with Singapore ranking as the highest salary at $36,897 among its peers followed by Brunei Darussalam with $24,184 and Malaysia with $6,997. Singaporeans ranked fifth richest in APEC.

Wealthier APEC citizens include Australia with $37,491; Hong Kong with $33,534; New Zealand with 29,334; Korea with $23,892; Chinese Taipei with $21,506 China with $9,726; Mexico with $8,519; and Peru with $4,109.

Senator Sonny Angara, author of a bill seeking to reduce individual income and corporate income tax rates to increase earnings among Filipinos and companies operating in the country, told reporters that Filipino earnings in 2013 should had been alongside Indonesia’s $1,810.

“We should aim to go higher and attract more investments and have more business friendly tax laws as we have been proposing,” Angara said.

The goal, Angara said, is to be at the level of Thailand’s $3,437. Thais ranked fifth lowest paid among APEC citizens in the WB 2013 salary data.

Angara, however, said that it would be hard to determine the rank of the Filipino salary once his proposed bill is passed saying there are many other factors that come into play besides just tax laws.

Angara’s Senate Bill No. 2149 aims to reduce the country’s individual income tax rate from the current 32 percent to 25 percent by 2017.

The neophyte senator cited that the Philippines has the highest individual income tax rate next to Thailand’s 37 percent and Vietnam’s 35 percent.

Meanwhile, the highest tax bracket of Cambodia is 20 percent, Indonesia 30 percent, Laos 24 percent, Malaysia 26 percent, Myanmar 20 percent and Singapore 20 percent.

He further noted that the country’s current individual income tax bracket has remained unchanged since 1997 until today even when the consumer price index has almost doubled already.

“In order for the Philippines to attract human capital and to prevent the migration of our own, it is imperative that we reduce the existing income tax rates while maintaining the progressivity of our income tax system, as mandated by the 1987 Philippine Constitution,” he said.

The Angara bill provides that in order to buffer the revenue impact of the individual income bracket adjustments and the reduction of individual income tax rates, the tax rate reduction will be spread over a period of three years starting 2015.