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Saturday, October 22, 2005
Peso buying power down 26% in Cordi
By Jane Cadalig
* As wage rate status quo sought
THE purchasing power of the peso in the Cordillera Administrative Region (CAR) has slipped to its all-time low at 26% this year compared to its buying capacity in 2000.
National Census and Statistics Office Statistician II Adrian Cerezo said one of the main reasons for the peso devaluation was inflation.
He said "when prices of goods increases, the power capacity of peso to purchase declines".
"The P0.74 cents in year 2000 was already the equivalent of P1 as of 2005, which shows how tremendous (was) the devaluation that took place," Cerezo added.
Peso devaluation leads to unemployment, which is one of the main problems of the government.
"When a company cannot maintain the money needed to run the business and its competitiveness decreases due to the increase in prices and cost of production, the company will decline and it (would) lead to employees being laid-off unless the burden will be passed on to consumers by increasing the prices of goods," Cerezo said.
Aldrin Bahit of the National Statistics Coordination Board (NSCB) said, "when there's peso devaluation, the capability to hire employees decline. If this happens, unemployment rate would rise and would affect the economy due to low tax collection".
Cerezo, meanwhile, reported inflation rate in Baguio as of September 2005 was 7.5 percent compared to 10.2 percent for the same month last year. In CAR, it recorded an inflation of 6.8 percent as of September 2005, showing a decrease of 1.8 percent from 8.6 percent Sept. 2004.
The unemployment rate in Baguio for the same period was 4.7 percent compared to 10 percent in July 2004.
Meanwhile, the regional Department of Trade and Industry (DTI) is not amenable to another increase in the daily wages of laborers.
DTI-Benguet Director Carmelita Usman said increasing the minimum wage of laborers in the region would only aggravate the problem of unemployment.
This developed as she explained that employers would resort to the laying-off of their workers if only to accord additional salaries.
Usman said she rather prefers a status quo, although she stressed the grant of wage increases would still depend on the economic situation of the country. She added the decision whether or not to increase salaries lies with the Regional Tripartite and Wage Productivity Board (RTWPB) of the Department of Labor and Employment (Dole).
She was reacting to a query if it would be justifiable for laborers to seek for another salary increase to cope up with the continuing rise in the prices of prime commodities.
"It would be better if we maintain the status quo because employers who would also be burdened would choose to dismiss some of their workers (just) to be able to give additional wages," she said.
Cordillera laborers are receiving an amount of P225 per day. The latest increase in the cost of living allowance here was implemented July this year at P20 per day. (With Roverson Vicarme/Northeastern College intern)
(October 22, 2005 issue)
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