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By Darwin G. Amojelar, Reporter
The buying power of Filipino consumers fell
sharply in May on higher prices of food and fuel, data from the
National Statistics Office showed.
The peso-purchasing power dropped six centavos
to P0.65 in May from P0.71 during the same period last year.
The purchasing power of the peso gives an
indication of the real value of the currency in a given period
relative to the peso value in the base period. It is computed by
dividing one unit of currency by the consumer price index (CPI)
under review multiplied by 100.
CPI measures the change in the average retail
prices of goods and services commonly purchased by a particular
group of people in a particular area. As a rule of thumb, for every
increase in the prices of goods and services, the quantity that a
consumer could buy lessens and the currency’s purchasing power
weakens.
In May, the country’s inflation rate surged to
9.6 percent from 8.3 percent in April on higher food and fuel
prices. This was the highest inflation rate since January 1999 at
10.5 percent and at the higher end of the Bangko Sentral ng
Pilipinas estimates of 8.8 percent and 9.6 percent. A year ago, the
inflation rate was 2.4 percent.
In Metro Manila, the consumers’ buying power
dropped by nine centavos to P0.68 in May this year from P0.77 during
the same period last year.
For consumers living outside Metro Manila, the
value of their peso is P0.65 in May, lower by nine centavos from
P0.74 during the same period last year.
Given this, the real value of the P362 salary of
the daily minimum-wage earner in Metro Manila is only P235 from last
year’s P267.88.
Based on National Statistics Office data, the
highest average price increase among commodity groups in the country
was in food, beverages and tobacco, which rose 13 percent in May
from the same period last year.
The power of the peso to buy items in this group
declined by nine centavos to P0.66 from P75. The fuel, light and
water group came next, which grew 8 percent from last year. The peso
purchasing power for this group dropped by three centavos to P0.51
from P0.55.
The power of the peso for services fell P0.57,
down by four centavos from P0.61. The power of the peso to buy items
for housing and repairs fell two centavos in May to P0.72 from P
0.74 in the same month last year.
The peso capacity to buy items in the clothing
group dropped three centavos to P0.77 and miscellaneous items to
P0.80 from P0.81.
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