In the Philippines, we are at no point in “chillax mode.” Right after the senatorial elections, a great number of the people’s nation has expressed dismay on the unofficial results. Unlike them though, I’m not moved – at least for now – when I don’t see the official and final tally and when time is not enough yet for those who won positions in the government to prove their worth.
So how are they going to uplift the poor and reduce the percentage of poverty in the Philippines? I don’t know and I’m not sure if they would remain true to their words when they shared their propagandas. What I’m sure of is that Filipinos are consistently suffering from poverty because of inflation among many other things.
In this article, let me discuss how inflation affects the lives of Filipinos, but first this:
The National Statistical Coordination Board (NSCB) released the latest statistics last month concerning poverty incidence in the country. When the percentages were compared in the last six years, they found out that poverty rates have remained unchanged. Please take a moment to process that statement. OK, the moment passed.
To quote actual reported figures, “the recorded poverty incidence for the first half of 2012 was 27.9 percent, slightly less than the 28.8 percent recorded in the first half of 2006, and 28.6 percent in the first half of 2009 and 2011.” NSCB continued, “the 2012 first semester state of poverty in the Philippines showed that a family of five can be considered extremely poor if it is earning P5,458 a month or just enough to put food on the table. The same family has to earn at least P7,821 if it wants to satisfy other non-food needs such as clothing.”
Counted as the poorest provinces are Apayao, Bukidnon, Davao Oriental, Eastern Samar, Ifugao, Lanao del Sur, Lanao del Norte, Maguindanao and Masbate, while poverty incidence was highest in Mindanao and lowest in the National Capital Region as well as in Regions III and IV.
The poorest are in the Autonomous Region in Muslim Mindanao (ARMM) with 46.9 percent poverty incidence, Region XII (37.5 percent), Region VIII (37.2 percent), and Region IX (36.9 percent).
How Inflation Affects the Lives of People in the Philippines at Large
1. Money in the Bank Gets Undervalued
Inflation would make these inhabitants of poor provinces, as much as the whole nation, poorer as savings are being devalued. I guess there are only two or three ways people can keep their savings. First is to store them in a vault in their homes or offices; second is to deposit money to a trusted bank or financial institution; and third is to invest them somewhere else.
If a person does not have enough knowledge on investing in the money market or is afraid to take risks to invest his or her savings to real estate or other businesses, a large possibility is for their savings to resort to bank or personal safe-keeping. I’m not saying that this is a really bad idea. In fact, I do keep my money in savings accounts, too. However, note that a regular savings account has only about 0.25% interest generated.
Maybe your bank gives a larger interest or smaller. Either way, what I’m trying to say is that most average Filipinos’ savings entrusted to banks would have interest rates that will never cope with inflation. In each day that our money sits in the bank, it becomes more worthless. We’re losing money faster we could make it, and this makes the thought of retirement a sad, bitter end to a joke’s punch line.
Time deposit interest rates do not post high hopes for depositors, in the same coin. Right now I have heard the largest interest rate for time deposit was raised up to 5.5% to 6% (promotion). Sure, these rates fare better than savings account rates. Even so, they still are not enough to cope with inflation.
2. Increased Costs of Goods and Services
Inflation thoroughly affects the prices of goods and properties. Both owned and rented real estates would demand higher repayments. Landlords would increase rent and property owners would also suffer from climbing real estate taxes (amilyar). Suppliers of any product and services would charge more to compensate the increasing costs to clients, because their overheads swallow the extra cash from price hikes. Since everyone is a customer, everyone would start to feel the squeeze.
The recurring problem is that everything becomes more and more expensive, but salaries of people do not grow sufficient to pay for all dues.
3. Lower Grade of Affordability
In relation to the previous point, when prices go up high, people cannot afford to have luxuries and even some necessities like cars and houses. Unless the head or any member of the family wants to live under a rock to stay secured, everyone pretty much need a house. A private car is also needed nowadays especially during emergencies and there’s no public transportation available to move a dying child to the nearby hospital in nick of time.
Thus a lower grade of affordability results to: crippling debts, series of life struggles, and even death (yes, it might be that brutal when prolonged).
Life isn’t fair, for most people who are in and near the poverty line. Not everyone is fated to be rich, and nobody can ever tell when the Philippines will recover and finally become a second-world country or be at peace with other nations. After one unfortunate event and sad news to another (e.g. recent shot of a Taiwanese fisherman), all eyes are upon us, a country known to the world for our hospitality, smiles and resilience. All that was forgotten; now, in the world’s eyes, we are country of misery, inept at rescue.
What’s important is inflation rates should be manageable this year, to boost economic growth and let people live with lighter hearts. Let’s see what happens tomorrow and the day after and the day after next…