In this paper, I investigate how inequalities in permanent income affects the saving behaviors of Philippine households. I exploit the instrumental variable method to formalize an empirical model that enables me to determine how permanent and transitory income affects the household saving rate across subsamples of households. I find that, unlike upper-class households, lower- and middle-class households are likely to spend large enough portions of additional permanent income to reduce their saving rates. Meanwhile, all households regardless of income classification tend to save larger portions of additional transitory income. This suggests that households are driven to spend and to save contingent on how they perceive the permanency or transitoriness of additional income to be. I also find preliminary evidence that, on average, households do attempt to spend prudently as they spend more of their permanent incomes on essential and recurrent expenditure items such as those on food, housing, transportation, and communication. My results show the overarching contribution of permanent income in determining household saving and importance of policy interventions to improve the low-savings economic environment of the Philippines by at least revolving around raising permanent income levels or alleviating consumption side pressures of households.