THE purchasing power of the peso in Negros Occidental has declined to P0.82 as the province's inflation rate peaked at 8.7 percent for the month of August this year.
Using 2012 as the base year, Negrenses' P100 could only buy P82 worth of goods today.
Data obtained by SunStar Bacolod from Philippine Statistics Authority (PSA)-Negros Occidental showed that the purchasing power of the peso in the province has slightly weakened last month from P0.83 in June and July.
The agency, though, noted a continuous drop since January this year. From P0.86, it went down to P0.85 in February and March; and P0.84 in April and May.
Luis Gonzales, statistical specialist II of PSA-Negros Occidental, yesterday told SunStar Bacolod that the movement in inflation is inversely proportional to that of purchasing power of the peso.
This means that the higher the inflation rate, the lower the purchasing power of the buying public, Gonzales said.
“Based on the consumer price index (CPI), like in Metro Manila, huge increases were noted among prices of food and non-alcoholic beverages like fish, rice, milk and softdrinks, among others, in the province,” he added.
Considered as another indicator of economic well-being, inflation is the sustained increase in the general price level of goods and services in an economy over a period of time.
Based on the PSA's report, the province's inflation for August is above the national average rate of 6.4 percent.
On September 5, the agency announced that the country's inflation climbed to another nine-year high.
August's inflation rate is higher than July’s 5.7 percent; June – 5.2 percent; May – 4.6 percent; April – 4.5 percent; March – 4.3 percent; February – 3.8 percent; and January – 3.4 percent.
The PSA also reported that annual increases were observed in food and non-alcoholic beverages at 8.5 percent; alcoholic beverages and tobacco - 21.6 percent; furnishing and household equipment - 3.5 percent; health - four percent; restaurants and miscellaneous goods and services – also four percent; and recreation and culture - 2.4 percent.
The annual rate of the food index further climbed by 8.2 percent, it added.
For Negros Occidental alone, inflation in January was 3.9 percent; February - 4.6 percent; March - 5.4 percent; April - 6.2 percent; May - 6.0 percent; June - 7.0 percent; and July - 7.2 percent.
“Some of the commodities in Negros Occidental particularly food and non-alcoholic beverages have higher prices than other provinces in the country,” Gonzales explained.
He said that given this rising trend, those who will be affected much are ordinary citizens.
Gonzales, however, pointed out that the current inflation is not yet on the “critical” level as it is still above the median rate.
“The purchasing power of the peso would also depend on one's status of living. Those with lower income might feel more the impact of higher inflation,” he added.
Moreover, purchasing power and inflation are also relative to CPI.
The CPI is also inversely proportional to the purchasing power. This means that the decrease in the purchasing power of the peso goes with the increase in CPI.
In terms of the price index, records showed that Negros Occidental has a CPI of P122 in August.
The figure is higher from January to July, which ranges from P116.3 to P120.2, it added.
Both the business and labor sectors in the province have earlier expressed worries over the rising inflation.
In fact, they have been calling on the government's concrete measures like convening the local price coordinating council to determine the “pressing” impact of surging inflation on the people.
Frank Carbon, chief executive officer of the Metro Bacolod Chamber of Commerce and Industry, earlier told SunStar Bacolod they are more worried now as higher inflation, if not stop, will result in more criminalities which would eventually affect businesses.
For labor group, General Alliance of Workers Association (Gawa) secretary-general Wennie Sancho had said that they might file a new petition for a wage increase in the region amid the reported deterioration of the public's buying capacity.