Wednesday , May 23, 2018

PSA: Purchasing power of peso in NegOcc steady

THE Philippine Statistics Authority (PSA) has noted a steady purchasing power of the peso in Negros Occidental, which is attributed to a good local economy.

Data obtained by SunStar Bacolod from PSA-Negros Occidental Tuesday, January 16, showed the province’s average purchasing power of the peso is P0.69 last year, which is the same as in 2016.

This means that with P100, Negrenses can buy P69 worth of goods today.

The PSA reported that from January to October 2017, the purchasing power of the peso in Negros Occidental was P0.67.

It slightly went down during the two remaining months of the year, at P0.66.

Luis Gonzales, statistical specialist II of PSA-Negros Occidental, said that based on the steady purchasing power of the peso alone, the economy of the province seemed not disturbed.

The PSA had earlier said the purchasing power of the peso had steadily decreased in Negros Occidental over the past several years due to rising prices of goods and services.

Using 2006 as the base year, the PSA has computed the purchasing power of the peso in the province in 2015 at P0.71 lower than P0.72 in 2014.

Gonzales said that being able to sustain the same purchasing power from 2016 to 2017 is an indication that the province’s economy had performed well amid the challenges.

“There seemed to be no economic disturbance last year,” Gonzales said, stressing though that the strength of the economy is not only measured by the purchasing power of the peso as there are still many other surrounding factors.

Another indicator of economic well-being is the inflation, or the sustained increase in the general price level of goods and services in an economy over a period of time.

In terms of inflation rate, a decreasing trend in the province was noted last year. From 3.5 percent in January 2017, it decreased to two percent in December.

Gonzales said inflation is inversely proportional with the purchasing power of the peso.

“The higher the inflation rate, the lower the purchasing power of the buying public,” he said, pointing out that the downward movement in inflation indicates a still growing economy in the province.

Purchasing power and inflation are also relative to consumer price index (CPI).

The CPI is also inversely proportional with the purchasing power. This means that the decrease in purchasing power of the peso goes with the increase in CPI.

In terms of price index, records showed that Negros Occidental has an average CPI of P145.5 last year the same with that in 2016.

Therefore, a product that costs P100 in 2006 would cost around P145.5 during the last two years, or a difference of almost P46.

Moreover, amid the implementation of the Tax Reform Acceleration and Inclusion (Train) law, the PSA said its possible effect on the purchasing power of the peso in the province could be felt during the second quarter of the year yet.

Gonzales said they have to “wait and see” the actual effects of exempting some workers from income tax while increasing the excise tax on various commodities.

“If there are perceived negative effects of the law, for sure the government also has measures to improve the country’s economy, including the living condition of the people,” he said.

Gonzales cited that more infrastructure projects funded through the tax reform could bring in more jobs and livelihood, resulting to another purchasing capacity and style of the public.