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Sun.Star Cagayan de Oro - - Opinion -

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.

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