“Twenty pesos na ‘tong isang pirasong sibuyas???”“Grabe 1k na agad ‘tong mga to!” —some of my thoughts as I look at my grocery basket. Some would also say “parang barya nalang ang 1k ngayon…”
You might all relate to these statements as we feel our money is losing value while we experience rising prices of the things we buy. What causes this? We’ve probably encountered the word inflation every time we read or watch the news. But what does inflation mean, and how does it affect ordinary people like us?
By definition, inflation is the rate at which prices for goods and services rise. This can be measured in several ways: price indices like the Consumer Price Index (CPI) or individual prices on sampled goods and services.
The Philippine Statistics Authority expects the Consumer Price Index (CPI) to rise by 3.9% in 2023. According to ADB projections, food prices are expected to increase by 5% next year and 4.5% each of the next two years. Transportation costs will also rise over time due to higher fuel prices—the ADB predicts they’ll be up by 4%.
A significant contributor to this increase is rising prices for staple goods; vegetables have increased by 30%, fish by 30%, and sugar by 36%.
But why does this matter? Because inflation directly impacts our wallets! Not only that, inflation can have several effects on an economy and its people, including:
- A reduction in purchasing power for individuals who live on fixed incomes like pensions and social welfare benefits;
- Higher costs for businesses that sell products or services at fixed prices;
- Lower profits for companies that operate on low margins; and
- Rising costs for businesses that purchase imported goods or raw materials from abroad.
In summary, the rising cost of living and growing food insecurity are putting increasing pressure on the country’s most vulnerable people, who have few resources to meet their basic needs.
The ADB warns that unless action is taken immediately to address these issues, food insecurity could become an even more significant problem than it already is today amongst poor households throughout the country— likely, they won’t be able to afford these necessities at all within three years.
So now, while our Php1,000 can still purchase quite some goods at the groceries, try to be more strategic, practical, and thrifty in spending. Remember, every peso counts!
By Rasta Gutierrez