The Marcos administration keeps vowing to pursue inflation-taming measures but this appears to be all talk, said research group IBON. While overall headline inflation in June is lower, the poorest Filipino families with little or no income are struggling with high prices particularly of food items like rice. The group said that to cope with this, Filipinos need immediate and effective relief in the form of substantially higher not token wage hikes and support subsidies.
Despite overall headline inflation slowing to 3.7% in June 2024 from 3.9% in May 2024, inflation in food and non-alcoholic beverages accelerated to 6.1% from 5.8% in the same period. Food inflation alone accelerated to 6.5% from 6.1 percent. This was mainly driven by faster increases in vegetables, tubers, plantains, cooking bananas and pulses at 7.2% from 2.7%; in meat and other parts of slaughtered land animals at 3.1% from 1.6%; and corn at 13.1% from 6.5 percent. Rice inflation slightly decelerated but remained in the double-digits at 22.5% from 23% in the same period.
The poorest households however bore the brunt of faster inflation which has been on an uptrend since the start of the year, said IBON. Inflation for the bottom 30% income households was much higher, accelerating from 3.6% in January to 5.3% in May and 5.5% in June 2024. This was largely due to faster inflation in food and non-alcoholic beverages which rose from 5.2% to 7.8% and 8.0% in the same period. Meanwhile, food inflation increased from 3.3% in January to 6.1% in May and 6.5% in June.
Higher food inflation from May to June 2024 was due to faster increases in vegetables, tubers, plantains, cooking bananas and pulses to 4.1% from 1.5%; in meat and other parts of slaughtered land animals to 3.0% from 1.8%; and in ready-made food and other food products not elsewhere classified to 7.6% from 6.5 percent. Rice inflation for the poorest households also remained high despite lowering to 24.4% from 25.1 percent.
The group also noted that despite lower rice inflation, rice prices remain high. The retail price of regular-milled rice has stayed at around Php51 per kilo since March and of well-milled rice at about Php56 per kilo since February.
IBON said that Filipino families are not earning enough to keep up with the high costs of food and other needs. For instance, the average daily nominal minimum wage of Php442 nationwide is just one-third (37%) of the Php1,210 nationwide family living wage (FLW) for a family of five as of June 2024. Even in the National Capital Region (NCR), which has the highest minimum wage in the country, the Php610 nominal wage is only a little over half (51%) of the Php1,190 FLW. The impending Php35 wage hike to Php645 will also barely make a dent – this will only cover 54% of the NCR FLW.
IBON said that the Marcos administration needs to step up and go beyond its token vows to tame inflation amid millions of Filipinos’ very real struggles to make ends meet. The government can start by giving a substantial wage increase towards a family living wage and more cash assistance to vulnerable families and providing support and subsidies to small businesses and producers. These will give immediate relief and in turn help boost purchasing power and the local economy.
