Rising inflation and the struggle of Filipino minimum
wage earners
BusinessMirror Editorial
March 4, 2024
The recent announcement by the Bangko Sentral ng Pilipinas (BSP) that inflation could
average 2.8 to 3.6 percent in February is concerning news for Filipino consumers, especially for
minimum wage earners who are already grappling with the rising cost of living. The increase in
prices, particularly in essential food items such as rice, meat, and fish, will further strain the
budgets of those who are already struggling to make ends meet. (Read the BusinessMirror story:
“Costlier food items to fuel February inflation,” March 1, 2024).
According to the BSP, the surge in commodity prices, including petroleum and electricity rates,
has contributed to the inflationary pressures. Rice prices, in particular, have reached their highest
level in 15 years, with an average inflation rate of 22.6 percent in January. This sharp increase in
the price of the staple food for many Filipino households has a significant impact on the overall
inflation rate.
While it is reassuring that the BSP’s estimate for inflation is still within the target range of 2 to 4
percent, it is essential to address the challenges faced by minimum wage earners. These
individuals, who form a significant portion of the workforce, are particularly vulnerable to the
effects of rising prices. Their limited income makes it difficult to absorb the additional costs of
essential goods, pushing them further into financial hardship.
It would do well for the government to take proactive measures to alleviate the burden on
minimum wage earners. One approach could involve increasing the minimum wage to ensure
that it keeps up with the rising cost of living. Additionally, targeted subsidies or social welfare
programs could be implemented to provide direct assistance to those most affected by inflation.
These measures would help alleviate the financial strain faced by minimum wage earners and
protect them from the adverse effects of rising prices.
Furthermore, the BSP must continue monitoring inflation and economic developments closely. A
data-dependent approach to monetary policy decision-making is vital to ensure that appropriate
measures are taken to maintain price stability and support economic growth. The BSP’s
commitment to this approach is commendable, as it recognizes the importance of balancing the
needs of the economy while safeguarding the welfare of the people.
The Marcos administration’s target of attaining upper middle-income status for the Philippines
by 2025 reflects a strong commitment to driving economic growth and development. While
economic growth is crucial for overall development, its benefits should reach the broader
population to make a meaningful impact on poverty reduction and inequality. However, the
projected high inflation in February has raised concerns about the potential challenges in
ensuring that economic growth trickles down to the poor masses.