Inflation 101: The Philippines, The Filipinos, and its Effects on the Economy
Every Filipino has been feeling the effects of inflation over the past few months due to the fact that the price of nearly every good and service we use has increased. This is especially evident for necessities such as food, clothing, fuel, utility services such as water, electricity, transportation, and other services such as education, healthcare, and producing goods.
The term “inflation” refers to the rate at which prices grow over a predefined amount of time and, as a result, indicates the rate at which purchasing power falls. To be more precise, inflation can be understood as a measurement of the rate at which the cost of everything keeps climbing. A number of distinct causes, including a rise in the price of raw materials and robust customer demand for a product or service, are examples that might set off an inflationary spiral. An illustration of the far-reaching effects of inflation would be an increase in either the standard level of prices or the cost of living throughout an entire nation.
Consider the rise in the national average price level or the cost of living as evidence of the far-reaching consequences of inflation. Nevertheless, it can be approximated on a more local scale, such as the increase in the cost of a meal, a haircut, or the fee for using the public transportation system. A falling value of a country’s currency in comparison to the money of other nations is a further effect that might be expected from rising inflation.
If a household’s income, when adjusted for inflation, does not grow at the same rate as prices, then that household’s purchasing power will decrease. This effect is assessed in constant prices. In other words, they have less cash or capacity to buy things after accounting for inflation.
The rising inflation rate in recent years has had repercussions for everyone, from consumers to retailers to the economy. If this impacts businesses, it won’t just be B2C firms but also B2B services that feel the pinch. Price increases due to inflation are having a widespread impact on commodities like petroleum. All businesses depend on electrical power to run their machinery and create their goods and services, whether in the agricultural sector, transportation sector, or other such plants. Inflation affects large and small organizations, and losses might have a more significant financial impact if they aren’t contained. This has repercussions for a wide range of items and services, particularly those involved in transporting agricultural goods from producers to distributors and merchants. Businesses interested in shipping goods will have to pay more for the services they receive, which will cause prices to rise in numerous ways. The rising fuel cost is just one factor that has led to price increases elsewhere; since trucks are used chiefly for transporting commodities across the country, those things will rise proportionally, depending on their nature. As a result, people will generally need a higher living cost to sustain their day-to-day activities. Naturally, families at the lowest end of the economic spectrum will confront a more challenging environment. Moreover, it may impact companies’ plans to invest in nations with higher inflation. In places with a high inflation rate, the high manufacturing cost could discourage businesses and investors from staying.
Another problem arises when government agencies are faced with postponing or abandoning experimental initiatives or research outputs because of the expensive cost of the necessary supplies. Inflation also stifles the growth of new firms and the employment prospects of the general public. In addition, it is essential to note that the food that the average person buys is where inflation shows its true face. If you have a truck deliver your vegetables, they will cost more because of the added transport cost. An additional issue, like hoarding, is inflicted by these price hikes on various goods. Thus, increased demand may lead to a supply shortage, pushing prices upward.
From the vantage point of a college student in the Philippines, we also feel the effects of the country’s high inflation rate. When the price of things like rent, groceries, and transportation continues to rise, it becomes increasingly difficult to put money away for future use. In such a situation, we look for ways to save money wherever possible.
Since everyone’s financial condition is different and the cost of everything has gone up (including fast food and budget meals), wasting money on frivolous purchases seems wrong. It’s more work for everyone to budget their money each week, study harder to raise their GPAs, and find methods to assist their families in paying for college.
Many Filipinos have been taken aback by Jollibee’s astronomical price hikes in recent months. What was once a pleasant experience has turned into a nightmare because of the enormous price increases across the Philippine provinces for the items on their menu.
Another example is the kikiam dumplings that we used to enjoy from manong’s fishball cart, which used to cost just 1 peso, but now it is available for 1.5 pesos per piece.
As an additional example, the sugary treat we used to buy was called “Frutos,” It used to cost only 1 peso, but now it costs 2 pesos each.
There have been a lot of events and shifts that have taken place in the country over the course of the past few months, and the lives of the Filipino people have become more complex as a result of the high cost of everything. Yet, we should not give up hope, and we should have the attitude that everything will be well after a specific time; nevertheless, we should not make it appear as though this is the norm. We need to have a positive outlook and not let the rising expense of living divert our attention from the objectives we have set for ourselves.
When making choices, political leaders in the Philippines need to consider what is at stake and the needs of the general population. We are all going through enormous difficulties due to inflation, and they ought to show some compassion by offering assistance to us rather than generating money off of our misery to show that they care about our well-being.
