Truth and consequences
Yet, somehow, the average Pinoy has not gathered up his friends and family to complain to our government about the high cost of living.
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Daily TribuneYet, somehow, the average Pinoy has not gathered up his friends and family to complain to our government about the high cost of living.
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The rapid weakening of the peso initially caused a loud outcry among Filipinos, mainly because it is painful to think of our currency hitting almost "60 pieces" to the dollar.
As usual, jokes abound to mitigate this pain, one of which goes something like this: "so the peso to dollar is almost 60… do we get a senior discount then?"
Shallow as it may have sounded, this little attempt at levity is a Filipino way of coping with stress. Certainly, the stress of the past months and weeks, and days have not let up, with food prices soaring, transport costs causing a lot of belt-tightenings, and the recent super typhoon bringing its adverse effects on the economy.
Yet, somehow, the average Pinoy has not gathered up his friends and family to complain to our government about the high cost of living.
Firstly, it could be because the journey of the Philippine peso has been explained so reasonably, one cannot point a finger at any political force. The peso extended its losses against the US dollar this month on the back of the hawkish Federal Reserve interest rates, soaring dollar, alarming geopolitics in the European and Southeast Asian regions, and the slowing global economy.
From an average of P50.99 versus the US dollar on the last trading day of 2021, the domestic currency fell P7.66 to P58.65 against the greenback or a 15-percent depreciation as of 5 October 2022.
Exacerbating the problem for the ordinary Juan de la Cruz is the report released by the Philippine Statistics Authority, indicating that the consumer price index for September this year rose 6.9 percent.
The record-high inflation was pushed by the price increases in food and non-alcoholic beverages, housing, water, electricity, gas, and other fuels, and transport, the PSA added.
Yet while this double-whammy hit the Filipino consumer, possibly sparking massive protests similar to what we witnessed in the mid-80s that eventually toppled the first Marcos administration, there were not even muted complaints from citizens.
The reason is that many Filipinos now have more money than they had at the start of the year because of the weakened peso.
For perspective, a Filipino family dependent on remittances would have P50,999 in their pocket at the start of the year for every $1,000 sent to them by their relatives working abroad.
Today, that same amount of dollars will be converted to P58,650, or 15 percent higher than what they used to have. Indeed, that is bigger than the 6.9 percent inflation rate last month.
Considering this further, more than 10 million Filipinos are working or living abroad, benefiting up to 40 percent of Filipino households, according to a study by the Asian Development Bank titled "Remittances and Household Behavior in the Philippines."
More importantly, the study concluded there is "evidence that households receiving remittances, in general, spend less at the margin on consumption goods like food and more on investment goods like education and housing."
So with Filipino recipients of dollar remittances having 15 percent more disposable income than at the start of the year because of the strong dollar and weak peso, no wonder there has not been too much of an outcry against the current inflation.
Of course, this is but one side of the story. The Bangko Sentral ng Pilipinas still needs to "take a stronger stance against the weakened peso," as experts have noted in increasing decibels.
