Inflation measures the general increase in prices. It becomes worrisome when prices rise rapidly while incomes do not. This has been the case of the Philippines for some time.
In 2024, the country had the second-highest inflation rate in Southeast Asia, and last we checked, the incomes of a lot of Filipinos are still insufficient to buy their basic needs. Yet, the Marcos Jr administration doesn’t seem too bothered and was even happy that inflation was within the 2-4% target for the year. Does the government even really care if the majority of poor and low-income families can still live?
High prices
By the end of 2024, official price monitors recorded high rice prices ranging from Php52 to Php61 per kilo. Prices for vegetables, fish and meat increased by Php5 to as much as Php115. Tomato prices stood out at Php213 per kilo – in some talipapas (neighborhood markets), they were at Php400.
Additionally, electricity and water rates rose by 12% and about 19%, respectively. Meralco rates reached Php11.96 per kilowatt hour (kwh). Manila Water and Maynilad rates climbed to Php42 and Php48 per cubic meter (cu.m.), respectively. The government approved further water rate hikes for 2025 bringing tariffs to Php55/cu.m. and Php65/cu.m.
Utilities are more expensive for poor households. For instance, urban poor organization, Kalipunan ng Damayang Mahirap (KADAMAY), reported that in 2024 electricity rates were higher in some areas of Quezon City: Php20 per kilowatt hour (/kwh) in Bgy. Commonwealth, Php22-40/kwh in San Roque, Php24/kwh in Tatalon, and Php25-35/kwh in Catmon. Informal settlers, with no direct connections due to right-of-way issues, contend with even higher water costs: Php50/cu.m. in Bgy. Commonwealth, Php80/cu.m. in Catmon, and up to Php140/cu.m. in San Roque.
Low incomes
This struggle is evident in the lives of urban poor mothers like Reya Jardin of Bagong Silangan and Maricel Paa of Krus Na Ligas in Quezon City. They belong to the 50% of Filipino households earning about Php23,000 or less every month, all while lamenting high prices.
Reya’s husband, a pedicab driver, earns Php400-Php500 per day for six days a week – a sum Reya cannot augment due to the lack of laundry jobs. Community farming, which once helped them, was temporarily suspended due to the typhoons. Maricel’s family meanwhile survives on Php650 daily from her husband’s construction work, supplemented by her share of the modest proceeds from community farming with her neighbors.
Both mothers attest to how they are compelled to make sacrifices to get by every day amid high prices. “Kulang ang kita, kaya naghihigpit na lang ng sinturon (Income isn’t enough so we just tighten our belts)”, Reya explained. Their monthly electricity and water bills run Php700 each, while food expenses for their six family members reach Php10,000. Reya said that they are forced to reduce food portions to stretch their limited budget .
Maricel dreads the day when she has to send her senior high school kids to college. “Hindi ko sila kayang pag-aralin sa kailangang mamasahe, hindi kaya dahil isa lang may trabaho sa amin (I can’t send them to school if they have to commute because there is only one breadwinner)”, she said. Currently, they are already scrimping on expenses, with their monthly electricity bill reaching Php1,300 and water that they fetch from a neighbor amounting to some Php940.
The reality is that high prices are beyond what lower-income families can afford, often forcing them to borrow money to manage their budgets. Both Reya and Maricel are indebted to the all-too-familiar 5-6 lending system, relying on usurious loans from informal neighborhoodlenders. It’s not surprising if many of the 20 million Filipino households without savings are now resorting to more and more debt as a desperate means of survival.
Ineffective and token measures
Despite these struggles, the economic managers of the Marcos administration proudly assert that the 2024 annual inflation was well within target. The National Economic and Development Authority (NEDA) claims that it has done a good job in managing prices to make basic goods and services affordable.
However, their bias towards importation remains evident as the government’s main strategy to augment domestic supply and reduce prices. The administration claims Executive Order (EO) 50, which extended the Most Favored Nation reduced tariff rates for key agricultural commodities, has been helpful. The Interagency Committee on Inflation and Market Outlook was expected to monitor the situation and propose tariff adjustments when needed. Other initiatives to supposedly counter or limit the impact of inflation include the promotion of lower-priced Kadiwa rice, and enacting laws to eradicate hoarding and anti-competitive practices (Anti-Agriculture Economic Sabotage Act and Administrative Order 20). EO 59 was also passed to expedite infrastructure flagship projects, several of which are presumed to improve agriculture and market connectivity and in effect reduce transport costs. Then there is the increase of interest rates by the Central Bank to purportedly discourage demand amid tight supply and hence temper prices.
But as observed, importation didn’t lower prices – neither for rice nor for most other commodities. While there may be occasional oil price rollbacks, utility refunds, or seasonal drops in agricultural product prices, the overall trend shows a continuous rise in prices regardless of these measures.
Factors such as traders, monopolists, profit-seekers, the weak peso, and utter lack of government regulation of prices contribute to this issue. At the core, the problem lies in the lack of robust domestic production of essential goods and services that Filipinos and the nation need. Shrinking agriculture and the absence of local industries makes the country more and more dependent on importing its needs. The government has not only allowed but even facilitated the country’s domestic economic incapacity and foreign dependency through ineffective and anti-people policies.
On the demand side, the Marcos administration has made token attempts to augment Filipinos’ spending capacities, especially during calamities. These include mechanisms, subsidies and credit-facilities, such as the “Agri-Puhunan at Pantawid Program” for only 50,000 rice farmers, the La Niña quick reaction funds that quickly depleted, and the food stamp program aimed at just 300,000 indigents (expanding to 1 million by 2027). A directive was also issued to provide a 100% discount on monthly electricity bills through the Lifeline Rate Program, but this was mainly availed by a small fraction of the 4 million Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries.
While these measures may help a limited number of recipients, they do not cover the millions of other Filipinos that are in need: those without savings, the 35 million in low-paying informal work, and the millions of households whose incomes and earnings fall short of the family living wage.
Real change
The government’s interventions to address high prices, while seemingly proactive, are insincere. These have obviously not been effective in enabling families like Reya’s and Maricel’s to meet their basic needs.
There’s no simple answer to the problem of inflation. Consumers regularly buy hundreds of different items of goods and services and there’s no single measure that will make all of these more affordable. This isn’t to say that nothing can be done but rather that so much needs to be done.
Immediate economic relief is urgent. Meaningful wage hikes will go a long way and benefit millions of Filipinos directly and indirectly. Rolling back or even removing consumption taxes that disproportionately burden the poor and lower middle class will also help. Revenue losses can be made up for by higher direct taxes on the rich like a billionaire wealth tax. Ensuring publicly-provided quality education, health, and housing will also relieve the burdensome spending of so many.
Steps should already start to be taken to make consumer needs more affordable. Food prices will fall when the government supports local agriculture to be more efficient and productive. Goods will be cheaper the more they are manufactured locally using local resources and technology. Developing agriculture and Filipino industry this way needs determined state protection and support, as every developed country has done and continues to do. The government doing all this will be strong proof that it does care about people and not just meeting abstract targets.
