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By Chino S. Leyco, Reporter
An item that cost P100 last year would cost
P112.50 today—as inflation posted a 17-year high in August.
But what does high inflation mean to an ordinary
Filipino?
Inflation is the rate at which the general level
of prices for goods and services is rising, explained the website
Investopedia.com, saying that consumers’ purchasing power weakens
as a result of increasing costs.
When inflation rises, pensioners and others on
fixed incomes are the most vulnerable, because income remains steady
as costs increase.
One such person is Ma. Andrea Sosa, 78-year-old
retired public-school teacher. She said the P3,000 that she receives
from the government does not buy as much as that amount did last
year.
Sosa is not hurting alone, as small businesses
also face problems keeping to their budget for the year. A
businessman said he did not expect that the economy would slow down
significantly this year and inflation would hit record highs.
Sosa and the businessman fear that price
increases will continue until next year, despite government’s
forecast that inflation will ease in the latter months of 2008,
mainly because oil prices in the world market are falling.
“It [surging costs] will lead to higher wage
demands from workers,” the businessman said.
Savings are also vulnerable to inflation, said
an economist from a private bank who explained that rising prices
shrink the buying power of the cash deposited in a bank. The
economist asked not to be identified.
On a positive note, the economist added that a
spike in inflation causes borrowers to realize that the real value
of their bank obligations also diminish as prices move upward.
Another economist, Dr. Benjamin Diokno, said,
“The burden of higher prices continues to remain heavy. But burden
is heavier for the poor, because of higher food inflation
particularly rice.” Diokno was Budget secretary during the Estrada
administration, and he now teaches at the University of the
Philippines.
RJ Janda, a human resource officer at an
information technology-consulting firm in Makati City, said
inflation has made her more conscious on how she spends her
hard-earned money. She, too, is feeling the pinch from rapid
increase in consumer prices.
Comparing her purchasing style a year go, the
22-year-old Janda said she has become less brand-conscious and more
price-sensitive.
“I still won’t compromise the quality
[though]. If I’m not happy with this certain product, I will try
the other brand,” she added.
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