Inflation, shrinkflation These days, people are talking not only about more contagious COVID subvariants but also high inflation and its “variants” such as stagflation. As purchasing power and the sizes or portions of staples such as pan de sal shrink, Filipinos have coined the terms “shrinkflation” and “skimpflation.” The problems give greater urgency for fiscal prudence and efficient management all around, from national agencies to local government units that now have a greater share of national revenues. The new government faces enormous challenges, a number of them beyond its control. These include surging fuel prices due to Russia’s invasion of Ukraine and the aggressive moves of the US Federal Reserve to tame inflation, which have weakened the peso and prompted the Bangko Sentral ng Pilipinas to raise interest rates at the risk of dampening economic growth. Mobility restrictions have been mostly lifted and growth rates indicate that the economy is recovering from the pandemic. Growth, however, has slowed down due to the surging costs of fuel and basic commodities. The government has limited room for response, with its debt rising to a record high P12.79 trillion as of end-June. In a survey taken by Social Weather Stations from June 26 to 29, the number of Filipinos rating their families as poor increased to 12.2 million from 10.9 million in April. That’s about 48 percent of families rating themselves as poor. The number of Filipinos who considered their families “food poor” – those who rated themselves as poor based on the food they eat – also increased from 31 percent to 34, or from 7.9 million to 8.7 million. And the numbers are expected to grow, as headline inflation rose further in July to 6.4 percent, driven by heavily weighted food and beverages as well as transport. It was the highest since the 6.9 percent recorded in October 2018. In Metro Manila, public transport drivers and motorcycle delivery riders are complaining about losing several days’ earnings to traffic fines of up to P3,000 imposed for even minor infractions due to confusing road signs and stoplight speed traps. The Marcos administration has given top priority to agriculture and food security, but other sectors are also calling for relief. Underpinning all the responses is the need for good governance, the judicious use of limited resources and lasting institutional reforms. Inflation, shrinkflation These days, people are talking not only about more contagious COVID subvariants but also high inflation and its “variants” such as stagflation. As purchasing power and the sizes or portions of staples such as pan de sal shrink, Filipinos have coined the terms “shrinkflation” and “skimpflation.” The problems give greater urgency for fiscal prudence and efficient management all around, from national agencies to local government units that now have a greater share of national revenues. The new government faces enormous challenges, a number of them beyond its control. These include surging fuel prices due to Russia’s invasion of Ukraine and the aggressive moves of the US Federal Reserve to tame inflation, which have weakened the peso and prompted the Bangko Sentral ng Pilipinas to raise interest rates at the risk of dampening economic growth. Mobility restrictions have been mostly lifted and growth rates indicate that the economy is recovering from the pandemic. Growth, however, has slowed down due to the surging costs of fuel and basic commodities. The government has limited room for response, with its debt rising to a record high P12.79 trillion as of end-June. In a survey taken by Social Weather Stations from June 26 to 29, the number of Filipinos rating their families as poor increased to 12.2 million from 10.9 million in April. That’s about 48 percent of families rating themselves as poor. The number of Filipinos who considered their families “food poor” – those who rated themselves as poor based on the food they eat – also increased from 31 percent to 34, or from 7.9 million to 8.7 million. And the numbers are expected to grow, as headline inflation rose further in July to 6.4 percent, driven by heavily weighted food and beverages as well as transport. It was the highest since the 6.9 percent recorded in October 2018. In Metro Manila, public transport drivers and motorcycle delivery riders are complaining about losing several days’ earnings to traffic fines of up to P3,000 imposed for even minor infractions due to confusing road signs and stoplight speed traps. The Marcos administration has given top priority to agriculture and food security, but other sectors are also calling for relief. Underpinning all the responses is the need for good governance, the judicious use of limited resources and lasting institutional reforms. PBBM should control worsening inflation After 100 honeymoon days of this administration, public clamor is growing for concrete and immediate action against high inflation, now the number one problem of Filipinos. From a six-month average of 4.4 percent since January, it went up to 6.1 in June, 6.4 in July, 6.3 in August and finally 6.9 this September. Our peso dollar rate is nearly P60 to one and economist Albay Rep. Joey Salceda says, we might see this going down to P65 and a high of P68 in the coming days. Today, we were hit by a bigtime P6.80/liter increase in diesel, basic fuel of transport and industries. Global oil prices, now at $80 per barrel, is expected to rise to $120/barrel with OPEC cutting production at 2M barrels a day next month, aggravated further by the nuclear tensions between Russia and Ukraine. President Bongbong Marcos and his economic managers insist that our “high 6.9 inflation” is an imported 80 percent problem and that if local numbers are examined, we are below the government’s targeted 4 percent. The peso’s weakness is pushed by the continuing increase of US interest rates also depreciating Japan’s yen, British pound, EU’s euro, Thai baht, and others. But now, the public’s cry for action against inflation is getting louder. In the September 17-21 Pulse Asia survey, a total average 66 percent of Filipinos nationwide wants BBM to control inflation. People in Mindanao are at the forefront with 81 percent followed by Visayas with 71 percent while Metro Manila is at 68 percent and Balance of Luzon at 56 percent. On demographics, the class D people are hurting, 71 percent saying BBM should act against inflation. Remember that Class D consists of self-employed people, drivers and market vendors lower middle income, about 78 percent of voters who chose BBM and SARA. Another September survey, PAHAYAG 3rd quarter indicated that the country’s economy is the most pressing of all issues that Filipino voters want BBM to focus on. 67 percent of 1,500 respondents are saying he should prioritize the economy, prices/inflation, poverty, jobs, and corruption. Of these, 70 percent are from Balance Luzon, 69 percent in Metro Manila, 61 percent in Visayas and 59 percent in Mindanao. At this point, I have not encountered any initiative from the present dispensation to address a future economic shock, predicted to arrive later this year or next year. You’ve probably heard of the California stimulus checks of $1,050 per family, which is part of the $17B relief package that would also suspend sales tax on diesel and aid people in their rent and utility bills. Of course, they may argue California or US is not the Philippines. But at least, their state government acted, helping their people fight rising costs. Right now, US inflation is at 8.3 percent, while ours is already 6.9 percent and rising. Is there an executive plan or a legislative agenda on what the government will do on worst case scenarios in case the peso dollar exchange rates shoot to P65, the global oil prices again to the $120 per barrel levels and an emerging world food crisis? I’m not aware of any. My good friend, BiznewsAsia publisher and Tuesday Group fellow Tony Lopez calls inflation as the Public Enemy number one of the Filipino. Tony says, inflation, like corruption, steals your money, without you not being able to do anything about it. Well, the rising survey numbers today are confirming this. With 6.9 percent inflation survey in September, your 100 apples bought last year for P100 pesos will lose about 7 apples. With the deteriorating peso, your money value goes further down the drain. Read more: https://opinion.inquirer.net/157776/pbbm-should-control-worseninginflation#ixzz7lwwKTJWb Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook 1. What is the claim? 2. What questions can you ask about the claim? 3. Which details in the text answer your questions? 4. How does the given detail reinforce the claim? 5. What details do you find interesting? Why? 6. What are some arguments that do not seem to have support? 7 What are some details that you find questionable? Why do you think so? 8. Are some details outdated, inaccurate, exaggerated, or taken out of context? Explain 9. What is the prevalent type of evidence found in the text? 10. How do you find the text in general?
