Inflation ‘complements’ poverty

Ej Lopez

Ej Lopez

THE relatively high inflation rate this year that averaged between 4 percent and 5 percent has been the hallmark and thorny part in our quest for consistent economic growth. The last quarter of 2014 has just unfolded and from the looks of it, the rate of inflation is expected to stay at the same pace.

The performance (or underperformance) of the economy is expected to stay in its current state toward the end of the year. However, even if higher inflation was the trademark of this Year of the Horse, it has somehow been offset by the positive credit standing we have obtained from well-respected international financial institutions.

Though investment factors, whether local or foreign, were not significant enough to cause a considerable change in our economy, they served as a buffer to the incessant price increases the economy encountered this year. Oil price rollbacks did not contribute much to economic development.

The steady decrease in the price of oil is a welcome respite to our unchanged unemployment statistics the past two years, but it could have been an economic reprieve if transport fares had also simultaneously gone down. But fares did not go down and therefore there was not much economic relief.

As it is, the economic movement we have experienced is “nature driven” and not brought about by human intervention. An example is the oil price decrease (at least eight times over the last 3 months) which happened as a result of the decrease in the price of crude oil in the world market.

The credit upgrade we earned from an international credit rating agency was primarily brought about by the high trust rating of the president, which was somehow inherited from his illustrious parents and not from his own accomplishments. Had the economic growth been leadership driven, it would have addressed the problematic unemployment problem.

Even the public-private partnership (PPP) program, considered as the flagship program of this administration, has not made any significant headway in the goal of generating massive employment.

In fact, to “complement” the enduring poverty that has remained through the years, poverty incidence increased in Metro Manila and the rest of Luzon in the third quarter (July, August and September), according to the results of the Social Weather Stations’ (SWS) recent survey. The survey, conducted from Sept. 26 to 29, found that 43 percent of households in Metro Manila rated themselves as poor, up from 37 percent in June.

It added that overall hunger incidence was unchanged at 55 percent of the population, or approximately 12.1 million families remaining poor in the third quarter. More families considered their life miserable as 43 percent of the respondents or about 9.3 million families consider the food that they eat as for the poor.

These realities stare right at the very faces of our economic leaders who always boast of their accomplishments in our economy. It seems that all this drum-beating heralding growth is only on paper.

The intention of a creating a “trickle-down effect” to the grassroots, who comprise a big percentage of our population, has not been realized. Although corruption remains the biggest threat in our quest for development, combating it should not be misconstrued as the final solution to poverty. If all the ingredients of progress exist, including a semblance of political stability, yet poverty remains and in fact has even worsened, then there must be something wrong in the growth component or indicators.

Priorities should be set by the government in its drive for growth. Growth that is fueled by temporary indicators like consumer spending is not sustainable or job-generating. As it is, there remains much to be desired in the much vaunted accomplishments of the current leadership when it comes to uplifting the quality of life of a large segment of the population.

The president is already in the homestretch of his term and there is no better way to show his sincerity to help his people by giving them relief from the poverty that has plagued them all their life. For after all, the battle cry of any leadership should emanate from the “war” against poverty.

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  1. victor m. hernandez on

    Since you mentioned inflation as trademark of the Year of the Horse, it seems improbable that inflation will reach th level of a galloping inflation. I hope w will not reach that state, unless the BSP is sleeping on its job, whioch is unlikely. The fiscal sector must,nevertheless, do better in providing better job and investment opportunities.

  2. Inflation is the worse enemy of the poor. Inflation puts things beyond the reach of the poor while affecting the making the lower and middle classes choose what to spend their money on. The upper class is not affected by inflation at all. They can continue to spend on everything they want. When you look at inflation it is a mechanism where more more is spend and earned by the elite, upper, class of the PH. So inflation must be curbed for the good the the vast majority of the people. Inflation can be called “trickle up”.

  3. victor m. hernandez on

    Inflation worsens poverty. Higher price lessens the value of money, can buy lesser of the basic things that it can buy. For people who earns very little, their lives become more miserable and more deprived. SWS survey of the last quarter, more people rated themselves as poor, and as hungry, compared to previous periods.