Wednesday, September 03, 2008 Editorials: Dilemma over cost of living
CONTINUED rise in the prices of basic commodities has the average low-income wage-earner frantically looking around for possible relief.
While prices have gone up, the unemployed and the jobless in urban centers and the countryside are finding less and less job openings.
The Bangko Sentral ng Pilipinas (BSP) reported that inflation has reached a 17-year high and it is expected to peak in October, although it won’t exceed a projected 13 percent.
Prices of commodities, however, would rise at an average pace of 12.2 percent.
Inflation rate in recent weeks rose to double digits because of the aggravating effects of the rise in wages and transport fares.
As a precautionary measure the BSP increased its key interest rates.
People’s dilemma over the harshly altered cost of living has driven many middle and low income families to also radically alter their lifestyles.
Many in the countryside have even resorted to cheaper diets in order to lower cost of living.
Estimates
The Department of Finance reportedly said that the “government could not simply cut taxes just so people could cope with rising prices…”
This perception is anchored on the fact that “inflation also bloats operating expenses of line agencies and makes public revenues streams more vital.”
This dilemma is made worse by government’s budget planners underestimating this year’s inflation rate at only 3.5 percent, not the 12.2 percent in July, the fastest pace in 17 years.
Monetary authorities estimated it at only 9 to 11 percent.
Forecast
With government expenditures raised to an estimated P9.36 billion added to the P1.24 trillion national budget under the assumed low inflation rate, we have the sorry portrait of a nation with the citizenry caught in the quagmire of a suddenly occurring economic condition, and their cost of living raised to a level that makes mockery of, and renders puny, the government’s war against poverty.
Whatever else the President may say at this point, the fact of the BSP’s baseline forecast that “the country’s inflation would remain in the 12 percent levels through November this year, and return to single-digit levels starting April next year” may have somehow sealed the fate of the impoverished and low-income Filipinos’ lives for the rest of the year.
Then count on top of this the recovering US dollar, and a weakening peso.
