THE poorest Filipinos experienced a 9.7-percent inflation rate in February, higher than the inflation seen by all Filipino households, according to the Philippine Statistics Authority (PSA).
This is the fourth consecutive month when inflation for the Bottom 30 percent of households was above 9 percent. However, the month-on-month data showed the rise in inflation was flat since inflation for the poorest households was also at 9.7 percent in January.
However, local economists said the elevated inflation experienced by the poorest households could imperil the government’s efforts to reduce poverty incidence. The aim of the Marcos administration is to bring down poverty to single-digit levels by 2028.
“A 9.7 (percent) inflation will definitely affect our efforts toward poverty reduction. A 9.7 percent inflation means additional individuals who would not have the capacity for sustenance. As the price increases, the purchasing power of money depletes. This is worse for poor people because they will have even less money to buy what they need,” De La Salle University economist Maria Ella Oplas told BusinessMirror.
Oplas said Filipinos who are better off financially are in a better position to stretch their resources so they can sustain their way of life, but poor families do not have such option.
This can be seen in the data since Restaurants and Accommodation Services were among the top causes of inflation for the Bottom 30 percent of households. National Statistician Claire Dennis S. Mapa said the bulk of these restaurants are small carinderias which the poor buy food from.
The weight of Restaurants and Accommodation Services in the Bottom 30 percent CPI is 7.5 percent, representing the third highest in the CPI. Given the weight and the recent increases in inputs such as raw ingredients and services needed for restaurants to operate, the poor would be significantly affected.
Based on the data, Restaurants and Accommodation Services posted an inflation of 7.9 percent, and this represented 6.1 percent of the increase in inflation for the Bottom 30 percent.
Oplas said resorting to carinderia food could be cheaper for poor households because cooking food at home entails larger one-time costs such as buying LPG, which they cannot buy in “tingi” [in small proportions]. Buying charcoal to cook food is an option but using it means cooking food in bulk to maximize the use of the resource.
“This is really bad (9.7 percent inflation for poor households). High food and other prices will worsen poverty since food is the biggest component of the consumer basket. This means that the poor really do not have access to more efficient channels for food,” University of the Philippines School of Economics head of research Renato E. Reside Jr. told BusinessMirror.
Ateneo de Manila University economist Leonardo A. Lanzona Jr. also told this newspaper that food is really more expensive for the poor since their incomes are much smaller. As the income of families increases, their food consumption remains the same but their additional income is able to cover food price hikes.
Lanzona explained that when food becomes expensive, the tendency of poor households is to reduce consumption of non-food items, eventually compromising their welfare and deepening poverty.
Based on the CPI for the Bottom 30 percent, food and non-alcoholic beverages account for 54.93 percent of the CPI while food alone accounts for 51.38 percent of the CPI for the poorest households.
In February, food and non-alcoholic beverages posted an inflation rate of 10.3 percent, representing 58.6 percent of the increase in inflation for the Bottom 30 percent of households.
Food inflation in the Philippines for this income group inched up to 10.5 percent in February 2023, from 10.4 percent in January 2023. In February 2022, the inflation for food was recorded at 2.9 percent.
The PSA traced the increase in food inflation mainly to the higher annual increment in the index of fish and other seafood at 11.1 percent during the month, from 7.1 percent the previous month.
In addition, milk, other dairy products and eggs index recorded a year-on-year increase of 12.3 percent, also jacking up food inflation.
Higher annual upticks were noted in the indices of flour, bread and other bakery products, pasta products, and other cereals at 10.9 percent; fruits and nuts at 8.5 percent; and ready-made food and other food products not elsewhere classified at 8.2 percent.
Inflation for the bottom 30-percent income households in Metro Manila, likewise, remained at 9.7 percent in February 2023. In the same month of 2022, inflation in the area was at 1.5 percent.
Inflation for this particular group of consumers in Areas Outside NCR also stayed at 9.7 percent. Inflation in February 2022 for this group was registered at 3.6 percent.
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