High prices still hounding Filipinos in first months of Marcos presidency

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Metro Manila (CNN Philippines, October 7) — "Dati ang sahod ko medyo may naiiwan pa, may natitira pa. Pero for now, parang said na said eh."

[Translation: Before, I was somehow able to save a portion of my salary. Now, it’s like there’s nothing left.]

Michelle Kairan, a 40-year-old beauty salon worker and mother of three.

This was how beauty salon worker Michelle Kairan described her life nowadays.

A mother of three, she’s used to working her fingers to the bone to provide for her family’s daily needs. But given how expensive prices have become even down to the neighborhood store, it was only a matter of time before her household felt the pinch.

Dati nakakabili ako by kilo-kilo ng sibuyas, kamatis, bawang, ngayon hindi na," Michelle lamented. "Tingi-tingi na, tig-i-isa, dalawa. Pagka magluluto lang ako, saka ako bibili. And then sa asukal naman, dati isang kilo nabibili ko, for one month na 'yun.”

[Translation: I used to buy onions, tomatoes, and garlic by the kilo but that’s not the case anymore. I buy in portions, perhaps a piece or two. Only when I’m cooking do I make purchases. I used to be able to buy a kilo of sugar, too, and that was already good for a month.]

Michelle used to buy household food items by the kilo, but has since resorted to purchasing them in portions.

Michelle joins other Juan Dela Cruzes in tightening their belts amid what is arguably their biggest headache these past months: stubbornly high inflation.

How high?

Inflation, or the increase in prices of goods and services, topped the list of issues Filipinos want President Ferdinand “Bongbong” Marcos Jr. to immediately address, revealed a Pulse Asia survey held days before he came into office. 

Three months after, the independent pollster reported that rising commodity prices remained the most urgent issue for the public. However, this time, the Marcos administration scored a negative net approval rating for its inflation control measures. 

Firms were also less optimistic beyond the third quarter amid rising prices of commodities, services, raw materials, and fuel, the Bangko Sentral ng Pilipinas found in its latest business expectations survey.

Philippine Statistics Authority figures show inflation was already heating up even before Marcos became chief executive.

It surged rapidly in 2021, as the country grappled with the COVID-19 pandemic and its subsequent global supply chain interruptions, before temporarily easing to the middle of the BSP's full-year target band of 2-4% in the first two months of 2022.

By the end of June, or the start of Marcos’ presidency, inflation breached 6% for the first time in 2022.

The chief executive himself was initially in disbelief over how high the rate was then. (However, Finance chief Benjamin Diokno eventually claimed Marcos’ reaction was “misunderstood.”)

Inflation mostly continued its ascent until it hit 6.9% in September, weeks away from Marcos’ 100th day in office. The last time the rate was this high was in 2018 during the rice crisis. 

Iyong pagtaas ng presyo, hindi welcome kasi nga dahil galing tayong lahat sa pandemya. Kumbaga apektado na nga ‘yung kabuhayan, ‘yung mga trabaho marami nawalan, nabawasan o nawalan ng mga livelihood,” RCBC chief economist Michael Ricafort told CNN Philippines over Zoom.

[Translation: The rise in prices is not welcome because we are all reeling from the pandemic. Simply put, lives are affected, many became jobless, and livelihoods were either lost or minimized.]

Marami pa lang nagre-reopen na businesses, maraming ngayon pa lang nakakabawi sa hanapbuhay tapos biglang nagtaasan ng presyo ng bilihin,” Ricafort further explained.

[Translation: A lot have just reopened their businesses and getting back on their feet in terms of their livelihood then suddenly prices of goods went up.]

What made commodity costs abruptly go up? On top of pandemic-induced constraints, the analyst pointed to other global factors like the Ukraine-Russian war, which further jacked up prices of necessities like fuel, grains, and even metals.

RELATED: ADB sees PH inflation above target until 2023 

Given its heavy dependence on food and fuel imports, the Philippines is heavily affected by any price increase for these items. And the peso losing ground against the US dollar is bad news too, since the country pays for imports using the greenback. 

Lifestyle changes

It's only a matter of time before the impact of major overseas developments is felt here, akin to a domino effect. And when the tiles fall, it’s the ordinary Filipino that is most pained.

In Michelle’s case, higher prices of household goods are hurting her pocket.

And with her children — two of whom are in high school and the other one in elementary — having returned to face-to-face classes after two years of virtual schooling, she also had to worry about their uniforms, school supplies, and school bus services.

Given these expenses, Michelle had no choice but to also cut down on recreational activities done as a family.

Minsan nga wala na rin eh, tinatanggal na kasi nga ganyan sa budget," she said. "Uunahin mo pa ba 'yung pagsasaya kaysa sa araw-araw na pagkain?”

[Translation: Sometimes we don’t even do that anymore given our budget constraints. Would you put leisure ahead of being able to eat every day?]

Michelle is used to working her fingers to the bone to provide for her family’s daily needs.

To a similar extent, information desk officer Kurt Condino also made some adjustments, particularly with leisure travel.

Ngayon, wala na masyadong [overseas] travel. Puro local travel na lang,” the 28-year-old shared. “Iyong mga flights nagmahal din siya due to [jet fuel] price hikes…kaya nil-lessen ‘yung out of the country.”

[Translation: At present, we don’t do much overseas travel anymore. We do more of local travel. Flights got expensive due to jet fuel price hikes…that’s why we lessened trips outside the country.]

Of course, the changes go beyond recreational trips. Kurt said they have been cutting down on day-to-day fuel consumption by taking public transport for nearby destinations instead of relying on cars all the time.

While these efforts helped his household adjust to white-hot inflation, he admitted that high prices still ate into their savings.

Economists have long warned about economic “scarring” from the pandemic, or losses that may last for many years.

What now?

The government has been taking several steps to help tame inflation and address its impact on the most vulnerable sectors of society.

On its end, the BSP has been hiking rates since May, bringing the key interest rate to 4.25%, a level last seen in pre-pandemic 2019.

Central banks rates serve as a benchmark for banks and lending companies in their loan, credit card, and deposit rates. Higher rates mean it will cost more to borrow, prompting businesses and consumers alike to spend less and save more. Central banks usually increase rates to help curb accelerating inflation.

Some agencies have also distributed assistance to farmers, fisherfolk, and the poorest households to cushion them especially from high fuel costs.

However, authorities might need to ramp up measures cracking down on inflation, which isn’t showing any signs of slowing down.

Ricafort said addressing inflation in the short term involves steps like further BSP rate hikes, which will address both rising prices and the falling peso.

Iyong long-term solution syempre, eh wag na lang palagi umasa ‘yung bansa natin sa importation," the economiist added. "Kung kaya naman i-produce ‘yung mas maraming agricultural products, dito na lang…pati dito na lang din i-manufacture ‘yung ibang produkto imbes na i-import.”

[Translation: The long-term solution of course is for the country not rely on importation all the time. If agricultural products can be produced widely locally, let’s do so here instead. Let’s manufacture other products here too if we can instead of importing.]

Boosting the production of key local sectors like agriculture and manufacturing will not only increase supply but also create more jobs, Ricafort noted.

However, for Michelle, addressing high prices is something one must ultimately deal with on one's own, perhaps through careful budgeting and being thrifty.

Kahit sabihin natin nang sabihin, kung di naman nila magagawa, wala tayong magagawa. Accept lang tayo nang accept,” she said.

[Translation: Even if we keep saying what the government should do, if they won’t do it, then there’s nothing we can do about it. We will just keep accepting and accepting what comes our way.]