Yule gloomy with inflated living costs

The spike in the prices of basic commodities and services will dampen the usual celebrations during the holiday season, as these directly impact what Filipinos expect on the table during the Noche Buena feast, according to industry stakeholders.

Credit Rating and Investors Services Philippines (CRISP) president and chief economist Noel Leyco said people’s pockets are already empty and full of holes.

“We’re not really in what you’d call a crisis. But still, why are basic goods so expensive? And the bottom 30 percent? They tell us their inflation isn’t like the reported numbers. Like before, it was 7.2 percent, now it’s 7.8 percent, but for them, their inflation is actually over 9 percent,” Leyco said.

The poor carry the brunt of high prices, “especially if you live in areas like Bangsamoro and other regions of our country, it’s really high,” he added.

Food and energy are removed from core inflation because those prices tend to be volatile and can easily change.

People’s purchasing power has dropped, and now one peso is worth only about 72 centavos, so the question has come up again about how much one can actually buy with P1,000 for Noche Buena.

“So when Christmas comes and we’re still counting how many days it’ll take before that happens, will that P72 drop even more?” Leyco said.

Sales slump

Steven Cua, executive director of the Philippine Amalgamated Supermarkets Association, described supermarket sales as “pretty slow.”

“Even during All Saints’ Day, not that many people showed up. Of course, it’s holiday preparations, but people aren’t really going out much, even in the usual shopping areas it’s not as crowded as you’d expect,” he said.

“With the salary increases, some stores probably had to cut back on staff. Plus, they gave employees added responsibilities. For example, when someone’s contract ends, they don’t hire new people. They might also have cut store hours. If you haven’t noticed, a lot of fast food places have reduced their hours compared to before,” Cua said.

He said every business is cutting costs to survive. While some stores try to attract customers by offering cheaper options, they still don’t do well because people still go for the big name brands.

“So you can’t really force the market to move in one direction, especially depending on income levels. The smart buyers know better, they know how to choose what gives them the best value. Right now, when it comes to Noche Buena items and Christmas, too,” Cua added.

Security Bank chief economist Angelo Taningco said poor consumers already know how high prices are because when they go to the market, buy food, and pay for gasoline and diesel, they feel the effects of the rising inflation.

It becomes a burden on their purchasing power because their wages have not risen as much as prices, he explained.

The weak peso is also pushing prices up because it raises import costs. “If you want to import, you have to buy more dollars,” Taningco said.