ONE need not be an economist to know what inflation is. Our pockets can easily feel it. As a co-worker at the Hall of Justice told me, how easily she loses her P100 in one day. Make that in an hour.
I eat lunch at my favorite diner. Even senior privileges can stretch my pocket so much.
So I was alarmed when I read the breaking news in social media.
According to a Facebook post, inflation, or the rate of increase in prices of basic goods, recently climbed to a fresh over five-year-high of 4.6 percent in May.
President Duterte’s economic team blame the high headline inflation to higher prices of fish and seafood, fuel and lubricants, as well as bread and cereals.
Blame it on the global increase in oil products. The rising global oil prices would continue to hurt the economies of the Philippines and other large net oil importers including Turkey and India, according to a report by Nomura Securities.
Inflation averaged 3.8 percent in the first three months and the Bangko Sentral ng Pilipinas (BSP) expects inflation to range between 3.9 and 4.7 percent.
The Department of Energy noted that world oil prices have been on the rise the past few months, a major reason for higher gasoline prices back home. As we know from previous transport strikes, a spike in oil prices sends the prices of other products spiraling.
The consumer price index (CPI) kicked up to 4.3 percent in March from 3.8 percent in February due to rising oil prices and the initial impact of the implementation of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (Train) Law.
It doesn’t help that the foreign exchange rate has, in addition, going on a downward trend. That means more pesos are needed for every barrel of crude the country imports and pay for in dollars.
“There might be some rise in inflation but we are sure this will taper off later in the year and will normalize in 2019,” Budget Secretary Benjamin Diokno said. That remains to be seen though. This is another timeline to monitor.
Finance Secretary Carlos Dominguez assured the public that inflation would not be a deterrent to the economic team’s efforts to reform the country’s socio-economic structure toward an inclusive society.
In fact, economic managers still cannot conclude whether inflation already peaked for the year or when it would slow down. “We don’t have a crystal ball,” quipped Neda Undersecretary Rosemarie Edillon. With such answers, we are not assured.
Edillon added that a typical Filipino household with a budget of P10,000 needs P459 more now to maintain the same spending behavior as the previous month. What average family earns that much?
If the situation gets worse, we can expect the high popularity of Duterte to plummet. Then the country can expect a powder keg ready to explode.
(bqsanc@yahoo.mail)