URBAN poor Filipinos living in Metro Manila experienced the highest inflation nationwide, according to data released by the Philippine Statistics Authority (PSA).
Data showed inflation among the poorest 30 percent in the National Capital Region (NCR) saw inflation soar to 9.1 percent in October 2022.
Inflation was the highest in transportation at 18.9 percent, followed by restaurants and miscellaneous goods and services at 11 percent, as well as the heavily weighted food and non-alcoholic beverages index at 10.5 percent.
Under transportation, the operation of personal transport equipment grew 22.9 percent while catering services under restaurants and miscellaneous goods and services saw inflation reach 7.3 percent.
The increase in food inflation experienced by the poorest in NCR was 11.2 percent. Food items that saw high year-on-year increases in inflation were sugar, jam, honey, chocolate and confectionery at 54.9 percent.
This was followed by oils and fats at 17.3 percent; meat, 10.7 percent; corn, 10.5 percent; vegetables, 9.3 percent; and Other Cereals, Flour, Cereal Preparation, Bread, Pasta and Other Bakery Products as well as milk, cheese, and eggs at 8.1 percent.
Other items in the Consumer Price Index for the bottom 30 percent that saw double-digit increases were pre-primary and Primary Education at 14.9 percent; Electricity, Gas and Other Fuels, 13.8 percent; and Tobacco at 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.
Government efforts
Research group Ibon said the Marcos administration can address high inflation and help millions of Filipinos cope with rising prices if it wanted to.
The group thinks that the people may find little relief and may be worse off should the government stick to its weak response of hiking interest rates and limiting subsidies.
“Raising interest rates may reduce aggregate demand and inflationary pressures but can also dampen economic activity, depress jobs and reduce household incomes further,” Ibon said in a statement.
Prices can be immediately lowered by suspending or removing consumption taxes such as value-added tax (VAT) and oil excise taxes, Ibon added. Revenue losses from this may partially be made up for by any increased economic activity.
It added that revenue losses from scrapping consumption taxes can even be more directly addressed with higher taxes on high-income families, large corporations and billionaire wealth.
Additionally, considering that a large part of inflation is from food, Ibon said the government can also help lower prices with increased production, marketing and logistics support for rural producers.
On the demand side, Ibon said wage hikes can be a start to support families’ purchasing power, which has eroded so much after pandemic lockdowns and incessant oil and other price hikes.
“Large and medium firms are likely to afford this while small and micro enterprises can be assisted by the government with wage subsidies,” Ibon said.
Substantial emergency cash or ayuda for the poorest 19-20 million families will also improve household welfare, spur economic activity and help give the supply-side measures more traction, the think tank continued.
NCR’s urban poor hardest hit by October inflation–PSA
Source: News Paper Radio
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