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Friday, July 19, 2024

Inflation takes toll on daily life

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Ibon Foundation cites difficulty to cope with high prices despite pay hike

The high prices of petroleum products as well as the elevated inflation have made it difficult for Filipino workers to make ends meet, despite the minimum wage hike that took effect on June 1, according to a local think-tank.

Ibon Foundation cited as an example the P570 minimum wage in Metro Manila, which it said was barely half the P1,119 per day wage needed for a family of five to live decently.

On a monthly basis, Ibon estimates a family of five with a monthly income of P24,333 will spend P2,522 for water, electricity, and gas – the third highest expense after food (P12,731) and house rental (P4,323).

The Philippine Statistics Authority earlier reported that the country’s headline inflation rate rose to 6.9 percent in September, significantly higher than the 6.3 percent in August this year and the 4.2 percent in the same month last year.

This trend is observed in other countries as well, given the same experience of subdued demand or a low base the past year, because of COVID, and the external pressures this year from commodity prices, logistics bottlenecks, weather shocks, and wide swings in the exchange rate against the US dollar.

“The government’s priority is to make sure that there is a sufficient and affordable food supply for every Filipino family,” NEDA Secretary Arsenio M. Balisacan said.

The top five contributors to the September inflation are electricity, gas, and other fuels, operation of personal transport, meat, fish, and housing rentals.

It is noted, however, that the inflation of meat has slowed from 12.8 percent in September 2021 to 9 percent in September 2022.

“Today’s inflation is far more complex than what we have seen in recent decades. The government and its stakeholders need to collaborate for shared solutions,” Balisacan said.

In the near term, ensuring sufficient food supply, while assisting the most vulnerable sectors will help us hurdle the current challenges,” he added.

According to Ibon in its September report, the absence of quality jobs, persistent poverty, and lack of savings make it difficult for the people to cope with the high cost of living.

The group estimates over six million Filipinos are without jobs (including discouraged workers and those not immediately able to take up work) as of June 2022.

Meanwhile, as of July 2022 there are supposedly 4.8 million additional jobs created since January 2020 but over half (54.7 percent) or 2.7 million of this is just in part-time work.

Over one-third is just self-employment (37.6 percent, 1.8 million) and almost one-fourth (22.4 percent, 1.1 million) are just unpaid family workers.

Ibon added that the government should ensure substantial funds to keep vulnerable workers and their families from falling into deeper poverty and to help them recover amid high prices and a weak economy.

The PSA earlier reported that the number of employed persons grew by 800,000 to 47.4 million from 46.6 million, while unemployment declined by 388,000 to 2.6 million from around 3 million.

But underemployment grew by 655,000 to 6.5 million from 5.9 million.

The Philippine economy, as measured by gross domestic product (GDP) grew by 7.4 percent year-on-year in the second quarter, slower than the revised 8.2 percent expansion in the first quarter and 12.1 percent a year ago.

Economic growth in the first half, on the other hand, averaged 7.8 percent, above the target range of 6.5 percent to 7.5 percent set by the government.

Economic managers expect the annual GDP growth to settle within a range of 6.5 percent to 7.5 percent from 2023 to 2028.

IBON earlier said that the quarter-on-quarter contraction of the economy in the second quarter of 2022 shows that recovery remains weak and requires more determined government action.

“This economic contraction is not an anomaly but a red flag that the country’s economy and Filipino households are struggling. This could worsen unless the new administration ensures that the 2023 national budget provides a substantial stimulus such as with significantly larger funds for social protection and support for small businesses and production sectors,” the local think-tank added.

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