According to a 2022 Pulse Asia survey, most Filipinos still see “controlling inflation” as their top concern. And in 2023, most Filipinos will agree that prices are rising in a meteoric rate.
Households are tightening their belts, as unevenly rising prices inevitably reduce the purchasing power of some consumers. This erosion of real income is the single biggest cost of inflation, which can also distort purchasing power over time for recipients and payers of fixed interest rates.
Rosario Guzman, head of research at the economic think tank IBON Foundation, stated that inflation due to a combination of factors — including high consumption taxes and elevated production and distribution costs following the privatisation of public utilities, with the rising cost of fossil fuel products — trigger the dire economic situation.
It is evident that the poor are more impacted, with then-President Duterte’s introduction of an excise tax on all petroleum products in 2018, on top of the existing value-added tax of 12 percent.
The IBON think tank calculated that for every Philippine peso increase at the pump generated an extra P400 million ($7.3 million) a day for the government last year.
President BBM has dismissed calls to suspend the VAT or excise tax on fuel, blaming high pump prices on the war in Ukraine and other external forces, even with the rising concerns that there is no assurance of food security.
The price of commodities – food, especially – has been a prickly issue under Marcos, who is concurrently the Agriculture Secretary, many critics are calling attention to the cost of living crisis which exposed the country’s over-reliance on imported food, noting that the weakness of the peso to the dollar had driven import costs higher.
As the demand for a particular good like rice, or service increases, the available supply decreases. When fewer items are available, consumers are willing to pay more to obtain the item—as outlined in the economic principle of supply and demand. The result is higher prices due to demand-pull inflation.
As reported by Rappler, the other top national issues were identified as follows: Increasing the pay of workers (44%); Creating more jobs (31%); Reducing poverty levels (30%); Fighting graft and corruption (25%).
Less than a quarter of those surveyed said “enforcing the law on all, whether influential or ordinary people”, “involuntary hunger,” giving assistance to farmers, fighting criminality, and promoting peace in the country were top concerns.
Ten percent or less of the respondents listed assistance to small entrepreneurs, reduction of taxes, stopping the destruction of the environment, defending the country’s territorial integrity, terrorism, and the welfare of OFWs as the most urgent national issues.
BBM has insisted he will not be saying goodbye to the Agriculture portfolio any time soon, despite the soaring prices of essential goods, and a handful of pressing economic and political controversies as both chief executive and agriculture chief.
In fact, the President/Agriculture Secretary is planning another trip abroad.
Reality bites.
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Author’s email: whelmayap@yahoo.com
