Research group IBON said that the Philippines has the highest inflation in Southeast Asia and Filipinos’ purchasing power is not keeping up. The Marcos Jr administration can help Filipinos cope with high and rising prices with more active steps to temper these and by improving Filipinos’ incomes and earnings.
The Philippine Statistics Authority (PSA) reported June 2023 inflation slowing to 5.4% from 6.1% in May 2023 and from also 6.1% in June 2022. However, this is still the highest inflation rate in the Southeast Asian region as of latest data available.
Inflation rates are lower in other Southeast Asian countries. The next highest inflation is in Singapore at 5.1% followed by Thailand (3.9%), Indonesia (3.5%), Malaysia (2.8%), Vietnam, (2%), and Brunei (0.2%), according to latest available data. Cambodia, Lao and Myanmar have no inflation data as of 2023. The Philippines has had among the highest inflation since the pandemic hit in 2020.
While inflation eased in June reportedly due to slower price increases in food, transport, housing, water, electricity, gas and other fuels, IBON noted that the prices of basic goods such as rice, vegetables, fish and meat still continued to rise.
Comparing PSA price monitoring data for June 2022 and June 2023, the cost of well-milled rice remained high at Php43/kg; of vegetables like native pechay increased from Php75/kg to Php94/kg; of tubers such as potatoes from Php77/kg to Php102/kg; of onions from Php93/kg to Php171/kg; and fish like tilapia from Php130/kg to Php141/kg.
Filipinos’ purchasing power has not kept up with these rising prices especially because the Marcos Jr administration has not undertaken any substantial measures to address this in its first year, IBON said.
For instance, by the end of Marcos Jr’s first year, minimum wage earners in the National Capital Region (NCR) were in effect taking home Php27 less per day as inflation since June 2022 eroded the real value of their wages. The real wage has fallen from Php508 in June 2022 to just Php481 in June 2023, measured at 2018 prices. As it is, the current NCR nominal minimum wage of Php570 falls far short of the estimated Php1,163 family living wage (FLW) for a family of five as of June 2023. With a wage gap of Php593, the NCR minimum wage in June 2023 is less than half (49%) of the NCR FLW.
Despite popular clamor for a meaningful wage hike, the Marcos government’s approval of the NCR wage increase taking effect in July 2023 is belated and tokenistic. The paltry Php40 hike only brings the monthly minimum wage to just Php13,420 which is still much lower than the unrealistically low official poverty threshold of Php13,741.
Minimum wages nationwide are below poverty wages. In June 2023, the monthly minimum wage across all regions averaged Php8,902 which is far below the monthly average poverty threshold of Php12,030 and way short of the Php23,260 monthly FLW for June 2023.
IBON added that there are short-term and long-term measures to temper prices that the Marcos Jr administration can take. These include removing the value added tax and other excise levies on oil, sourcing cheaper oil, and more substantial support for small producers and domestic production.
The government is exaggerating its efforts to protect consumer purchasing power and its tokenistic showcase measures are helping much less than the magnitude in need. The Marcos Jr administration is not doing enough for millions of poor households with little income and no savings who are being left behind, said IBON.
The social welfare department’s food stamp program, for instance, provides Php3,000 worth of food credits to only the poorest one million beneficiaries. The labor department did not even bother to spend its entire DOLE Integrated Livelihood Program (DILP) which still has Php245.3 million unspent for 2022. This is supposedly to help workers with insufficient income, unpaid family workers, seasonal workers, displaced workers, among other marginalized groups like landless farmers and fisherfolk.
The Filipino people will keep grappling to make ends meet as long as the government fails to recognize that life remains difficult for the majority. It should take the necessary steps to ease this in the short and long run such as substantial aid to vulnerable households, meaningful wage hikes for all regions, as well as support and subsidies for small businesses and producers, the group said.
