NEGRENSES’ P100 seven years ago, can only buy goods worth P80 today.
Though the top official of the Philippine Statistics Authority (PSA) in Negros Occidental said such purchasing power of the pesos in the province is still at “good” level.
Luis Gonzales, provincial statistical officer of PSA-Negros Occidental, said from P0.80 in November 2019, the province’s purchasing power of the peso slightly dropped to P0.79 in December 2019.
Gonzales said that from P0.81 in January to April 2019, the purchasing power of the peso in the province declined to P0.80 in May to August, and furthered slowed down to P0.79 in September and October.
“Using 2012 as base year, the current purchasing power in Negros Occidental is still at good level as Negrenses’ peso still has value,” he said, adding that “we still have the capacity to buy and pay for goods and services, respectively.”
Earlier, the PSA 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.
In 2016 and 2017, the average purchasing power of the peso was P0.69. It recovered in 2028, at P0.83 then slightly lowered at P0.80 last year.
The purchasing power is also relative to consumer price index (CPI).
The CPI is 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 P124.8 last year.
Therefore, a product that costs P100 in 2012 would cost almost P125 last year, or a difference of 25 pesos.
Another indicator of economic well-being of the province is inflation, or the sustained increase in the general price level of goods and services in an economy over a period of time.
Inflation is also inversely proportional with the purchasing power of the peso. Meaning, the higher the inflation rate, the lower the purchasing power of the buying public.
Gonzales earlier told SunStar Bacolod that from seven percent in 2018, the average inflation rate in Negros Occidental last year has settled at 3.7 percent.
He said a decrease of almost half in the inflation rate is an indication that the province’s economy remains viable.
“With an average inflation of 3.7 percent and purchasing power of the peso of P0.80 last year, Negros Occidental is attractive to investors,” Gonzales said, pointing out that the province, though, still needs to ensure stability of other services especially power and water.
Poor power and water services may discourage businesses to locate here, the PSA official added.