OPINION | Get real with inflation By Amelia H. C. Ylagan READ:
The 6.9% inflation growth rate is well outside the 2% to 4% target of the Bangko Sentral ng Pilipinas , which has so far raised rates by a total of 225 basis points this year to try and stem inflation.
The price changes in the sample grocery food items in the table, plus the escalating prices of fuel and gas, electricity, water, and housing in the last 2-½ years may basically represent the layman’s most common perception of today’s inflation.
Cost-push inflation, the economists call it, but the jargon is itself confused, as frustrated demand from weakened purchasing power increases demand even more, and inflation raises evil laughter at its triumph in entrenching itself in adaptive expectations of consumers who resign themselves to the irreversibility of prices that have gone up and which will never again go down. “Sticky prices” is the cutesy name for this.
But the exporters and the Overseas Filipino Workers are happy at the depreciation of the Philippine peso, as they now have almost 20% more pesos in exchange for their dollars. As of last year, OFW remittances hit a record-breaking $34 billion, which, according to the BSP, accounted for 8.9% of the country’s GDP. In July 2022 alone, money sent home by OFWs increased by 2.3% to $3.24 billion from $3 billion, the BSP said.
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