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:
News Flash
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).
Wrap Up
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…
About Rochkirstin Santos-Sioco
Health and technology freak. Food and lifestyle blogger with a large appetite for food and travel.
That’s true, inflation and a period f rising prices would make the poor poorer especially if they don’t find means to alleviate their situation.
The nation can reduce unemployment and inflation to zero, if only we really try harder. But poverty can never be reduced because it’s a choice. 🙂
As terrible as it sounds, poverty is a result of people choosing NOT to improve their lives. For example, you think that somebody living in the hood on food stamps is that way because they are trapped in poverty. I’ll tell you, that person is poor because they refuse to enhance their education level to escape poverty.
The key to poverty is education. The more education a person gets, the less likely they are to be poor.
You have some good inputs in there. I also couldn’t agree more to Franc’s comment.
Thanks. The points here make up only the finest tip of the iceberg, so to speak. There are other more popular implications of inflation that men should worry and be concerned about.
Government must do something with inflation or else, our economy will drop. Also, we should be wise in what we do with our money.
“Inflation” is one of those words that, regardless of a lack of economic knowledge, everyone realizes is bad. It’s often seen as unavoidable, most of all by the government. I agree with your words; those who want to beat inflation should take time to do their homework and get professional advice when necessary to have the same or more buying power in the future.
Even a good economist who became President didn’t solved the problem. 2 things we have to consider in order to addressed this issue. First, Political will and secondly, rid the society of corrupt officials.
Actually I think there are quite a number of things to consider here but those two may be put as the “front-liners.”
You have valid points here but we will never know if Noynoy’s administration will change anything substantially since he only started his presidency in 2010. 2 years is a short time, the jury is still out on this one.
Yup, we will give him time. Right now he’s been doing a good job I guess but it can’t be helped that some Filipinos still clamor and negate his actions. There can never be anyone who’s perfect.
I agree with you that “life is not fair” (I experienced that).. But there’s these thing called “diskarte” and “prayers”. I have realized that there are rich persons here in Phil, which means, we could not blame all to the government. (yet somehow it affects as nation needs good leader).
The government is one but we can put the blame on our own, too. We should all work together cohesively to call progress.
Everyone needs to know more about inflation. They have to know that saving in the bank is not enough to beat inflation because when you put your money in the bank, you are loosing its its value. The infaltion rate in the Philippines is almost 3x more than the interest rates in the banks so we have to learn how to invest our money to beat inflation.
Correct. 😀
This is so true. The poor are becoming poorer. We need a change in the government. But we can’t always blame it all on the government or hope for help from them. Kumbaga, nasa tao pa rin yan.
Well yeah I think there are changes however minute. Most Filipinos cannot feel the progress but in time, they will, too.
i am totally sad for Philippines. Feels like I wanted to get my whole family and bring here. But soon they will. Still i lovemy country. I just hope that those politicians do love it too rather than being kurakot. I wanna see progress little by little we can go far.
While all these are happening, there are still many reasons to be happy about for Philippines. Let’s just keep wearing rose-colored glasses and view the system in an optimistic light. 🙂
i am one of those who is actually ignorant when it comes to investing . I just put a savings account in the bank and depend on my monthly salary . But i guess that now something has to change , i need to think other wise for my future .
I was before also unaware that the more money you put in a bank and the longer time they are stored, you are losing more for your future. So it’s wise to get some financial counseling as early as now.
ibang level pala ang blog mo roch. gumogovernment and all that. nice post to read.:)
Hahaha. Yeah I write about anything but lately mostly about food. 😛
the governtment should make a strategic plan about this issue. The developed countries will only bully us.
It’s not only the government that should do something about it. Civilized citizens should also take action for their share.
Wow! Nice read here sis, I remember one of my studies way back college years, our group was assigned to give a report about INFLATION, that would turn everyday problems into a DISEASE. Hope our administration can read your post here for them to have a new strategic plan (if they have a plan).
Hey, thanks! I do hope that their plan would include teaching citizens how to manage money because for example, Pedro is living paycheck to paycheck, then he won’t dare to put his entire household security or majority of his pay on the line for investment. He’d be more afraid to risk his money out there & realize later that he’ll fail than the wealthy might thereby risking far more with potential failures. This possibly ends in homelessness or not being able to purchase food. So often to prevent catastrophe, he (like most people) chooses to stay exactly where he is.
if inflation continues, there will be more poor Filipinos in the next few years.. and that would really be too awful..
The gravity becomes more pushing when they think that there is no escape from their current situation. Why? They will be feeling more helpless and this belief when stuck for years can damage their dreams and aspirations to become more successful in life (blocking the opportunities they meet along the way). Settling into a certain way of life becomes the problem.
Inflation indeed makes the value of our money smaller and smaller every year that’s why we need to invest our money on many investment vehicle that provides interest higher than the inflation rate every year. This is the reason why, there are many books and seminars became popular not only in the Philippines but around the world.
Regardless the race, job, profession and background of people now, we must be concerned about inflation as we all agree that poverty is a sad blemish on the world’s terrain.
If we will all work together, the rich, the poor and the gov’t, there’s still hope for our country. We cannot blame the gov’t for every bad thing that happens. Sabe nga nila, simulan sa sarili ang pagbabago. 🙂
The poor remains poor because they are contented with being poor. Kahit kasi may projects ang gov’t to help them, they just take them for granted.
Yup. Also, in general, the concepts on how to make money, how to invest money, and how to sustain wealth are never taught. So even if the poor win money from the lottery, it’s just easy to swing the bulk of the winning by and become bankrupt back again.
Being an economist, it all boils down to supply and demand which are greatly influenced by scarcity of resources. Prices increases over time (in the long run) just because resources are getting depleted. Inflation cannot be avoided, however, one can best it by putting your extra money in some instruments with higher rate than the inflation rate. With rates now at 4%, any instruments with at higher basis points would do the trick. Anyways, very informative post!
Thanks for your insights as well. They are very helpful to readers.
We need a good LEADER to spearhead the campaign of addressing this kind of INFLATION issue and the negative effect of it. I agree with papaleng, political will is a must.
We don’t only need a good leader but great followers as well because when no one is hearing out and following what the leader says, nothing good will come out of it.
Your post actually put a heavy weight in my heart. No exaggeration, but I definitely agree with you. It’s sad though that we can only become progressive if ALL of us will strive toward a similar goal. But with the country’s current situation and with a righteous society always putting blame in the government, rich people, etc., I doubt that the country will improve any time soon. I think we’ll just have to make do and think of ways we can save and earn more.
Great reflection, Sumi. At the most basic ground, Filipinos should learn from a young age that they should spend less than they earn. Record where every cent goes. Save receipts, credit card slips, canceled checks, and write everything else down on a pad of paper.
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