HE 6.7 percent inflation rate as of September 2018 that was announced by the Philippine Statistics Authority shows the disparity between reality and government numbers.
Ask people if prices of items bought from markets and grocery stores went up by only about seven percent. You are bound to get a litany of how this or that costs double now compared to last year. Prices have gone up 50 to 100 percent.
If the inflation rate is the measure of purchasing power and price indices, then there is something unreal about the rate of 6.7 percent.
The rate of inflation is pegged on the Philippine Consumer Price Index that looks at prices in 11 categories, including food, alcoholic beverages and tobacco, housing, water, electricity, gas and other fuels, clothing and footwear, recreation and culture, and health. For food alone, there are many items that cost double now.
Fish, my favorite anduhaw to be specific, could be bought at less than P100 a kilo before January or when the Tax Reform for Acceleration and Inclusion law took effect. The cheapest in the market now is at P180 per kilo, but in the grocery store, the price can go as high as P400.
One piece of banana used to cost P5. Now, it is P10. Carrots were at P40 to P50 per kilo last year. They are sold at P80 to P90 at the market.
Cebu Business Club president Gordon Alan Joseph also pointed this out. He said he believes the rise in inflation rate is more than 6.7 percent. “I think we should be realistic. From what I have seen, prices have risen more than seven percent across the board, hitting even more than 20 percent increases in food items,” he said in a SunStar Cebu business report.
He said the rising prices of basic goods negates all additional income gained from income tax reforms. Government seems unable to respond effectively, said business leaders. The report defines inflation as the rate at which the general level of prices for goods and services is rising and consequently the purchasing power of currency is falling.
A rise in inflation rate will then lead to calls to increase minimum wage and public transport fares. “Expect wages to increase soon and a vicious cycle will be created where, because of rampant and constant price increases, the buying power of the wage earners will never improve. It’s frustrating,” Joseph said. Perry Fajardo, an economist, agreed that “inflation is contagious.”
There are calls to suspend the new tax law and to fire inefficient officials in food agencies. But these will take time and the public will continue to suffer price increases.
Government should mitigate the effects of a higher inflation rate in areas where majority of the people – the poor and middle class - are getting hit. Food and fuel. Not on housing, recreation or alcoholic beverages.
People are getting hit by food becoming more expensive and fuel and transport prices regularly rising. Stop the price increases on food and fuel to mitigate the effects of inflation.