The National Capital Region, particularly for the urban poor Filipinos living within the area, was hit the hardest by the October inflation
Data from the Philippine Statistics Authority (PSA) showed that urban poor Filipinos living in the National Capital Region (NCR) or Metro Manila experienced the highest inflation nationwide.
Inflation among the poorest 30 percent in the NCR saw inflation soaring to 9.1 percent in October 2022, Business Mirror reported.
The highest inflation would be in transportation at 18.9 percent, followed by restaurants and miscellaneous goods and services at 11 percent, then the heavily weighted food and non-alcoholic beverages index at 10.5 percent.
Food inflation increased by 11.2 percent for the poorest in the NCR. Sugar, jam, honey, chocolate, and confectionery saw the highest year-on-year inflation rate of 54.9 percent.
This was followed by:
· Oils and fats (17.3 percent)
· Meat (10.7 percent)
· Corn (10.5 percent)
· Vegetables (9.3 percent)
· Other Cereals, Flour, Cereal Preparation, Bread, Pasta, and Other Bakery Products, as well as milk, cheese, and eggs (8.1 percent)
Aside from food inflation, there was also a double-digit increase in the following:
· Pre-primary and Primary Education (14.9 percent)
· Electricity, Gas, and Other Fuels (13.8 percent)
· Tobacco (10.9 percent)
“The Marcos administration also needs to give much more attention to addressing chronic vulnerabilities rooted in underdeveloped agriculture and domestic industry rather than being trapped in old ways of thinking and not doing everything to relieve the Filipino people’s mounting distress.” Ibon Foundation Inc. said.
The Ibon Foundation, a non-profit research, education, and information-development organization based in the Philippines, with programs in research, education, and advocacy, provides various sectors with socioeconomic research and analysis on people's issues, primarily grassroots organizations.
Coping with inflation
Ibon said that the Marcos administration could address the high inflation and assist millions of Filipinos in coping with the rising prices if it wanted to.
If the government continues with its weak response of raising interest rates and limiting subsidies, Filipinos will receive little relief and may be worse off.
In terms of raising interest rates, it may reduce aggregate demand and inflationary pressures. However, it can also dampen economic activity, reduce job opportunities, and further reduce household incomes.
Ibon suggested that prices can be lowered immediately by suspending or removing consumption taxes such as the value-added tax (VAT) and oil excise taxes. The revenue losses gained from this can be made up for by any increased economic activity.
Ibon continued by asserting that revenue losses from eliminating consumption taxes can be more directly addressed by raising taxes on high-income families, large corporations, and billionaire wealth.
Additionally, the government can also help lower food prices with increased production, marketing, and logistics support for rural producers.
It would be a huge help to producers and consumers, given that food, a necessity, accounts for a large portion of inflation.
For the demand side, Ibon said that wage hikes can help restore families' purchasing power, which has suffered greatly because of pandemic lockdowns and ongoing price increases for oil and other commodities.
“Large and medium firms are likely to afford this while small and micro enterprises can be assisted by the government with wage subsidies.” Ibon added.
Significant emergency cash or assistance for the poorest 19-20 million families will also improve household welfare, stimulate economic activity, and help supply-side measures gain traction.
Inflation has been a difficult pill to swallow, especially for the poor Filipinos who must deal with it in order to stay afloat. The government must take measures to lessen the impact of inflation on everyone.
Tags: #Inflation, #NCR, #Ibon, #Measures