A mismatch: A worker stands on onion sacks as he prepares a delivery to a warehouse in metro Manila. Experts say that even when wages were hiked, the increases can barely keep up with inflation. — Reuters
MANILA: With inflation reaching a 14-year high last month, more Filipino families now consider themselves poor, with approximately two million newly poor or those who were non-poor one to four years ago now considering themselves poor.
Sonny Africa, executive director of the think tank Ibon Foundation, said that “poverty is a function of family incomes and prices of basic goods and services,” but “unfortunately, there have been adverse trends in both in the last part of last year, after Ferdinand Marcos Jr took office”.
He told Inquirer.net on Tuesday that “except for a very incremental slowdown in August 2022, inflation accelerated throughout the second semester from 6.1% in June 2022 to 8.1% in December 2022”.
According to the Philippine Statistics Authority (PSA), the spike last month was mainly because of the higher annual increase in the price index of food and non-alcoholic beverages at 8.4%, up from 8.2% in the previous month.
With high inflation, Africa, an economist said: “Families will definitely fall into poverty when their incomes are unable to keep up with rising prices and they see their consumption and welfare collapse.”
Based on the latest data from the Social Weather Stations (SWS), which conducted a survey on self-rated poverty from Dec 10 to 14, 2022, the number of poor families slightly rose to 12.9 million (51%) from October’s 12.6 million (49%).
Some 31% rated themselves as borderline, or placed themselves on a horizontal line dividing the poor and not poor, higher than 29% in October, while 19% considered themselves not poor, down from 21%.
Out of the 12.9 million self-rated poor households last month, some 8% said they were newly poor, higher than 7.7% in October, when inflation hit 7.7% because of price gains in key commodity groups such as food and non-alcoholic beverages.
SWS said 1.5 million (5.8%) households were usually poor or those who were non-poor five or more years ago, up from October’s one million, and 9.4 million (37%) were always poor or those who never experienced being non-poor, slightly down from 9.6 million.
Conversely, out of the 12.6 million non-poor households last month, some 20.5%, or 5.2 million, said they were newly non-poor, or those who were poor one to four years ago. Some 2.2 million were usually non-poor, while 5.2 million were always non-poor.
As explained by the SWS, the self-rated poverty threshold, or the minimum monthly budget that self-rated poor families say they need for home expenses in order not to consider themselves poor, which was 15,000 Philippine pesos in December, has remained sluggish for several years despite considerable inflation.
“This indicates that poor families have been lowering their living standards, which is belt-tightening,” it said. According to SWS, the rise in self-rated poverty last month was because of the increase in rates in Balance Luzon, or Luzon outside Metro Manila, combined with decreases in Metro Manila, the Visayas, and Mindanao.
Compared to October 2022, self-rated poorness rose in Balance Luzon from 36% to 49%. However, it fell in Metro Manila from 44% to 32%, in the Visayas from 68% to 58%, and in Mindanao from 64% to 59%.
Looking at data from the PSA, most regions in Luzon registered a higher readout, with Bicol being the only region with a lower inflation rate of 7.5% in November and 7.2% in December. The readout in Calabarzon remained at 7.1%.
Inflation was at 7.7% from 7.6% in Cordillera, 8.2% from 7.7% in Ilocos, 8.5% from 7.8% in the Cagayan Valley, 9% from 8.8% in Central Luzon, and 8.9% from 8.6% in Mimaropa.
In Western Visayas, the readout accelerated to 10.5% from 9.6%. Inflation was likewise higher at 8.5% from 8.3% in the Central Visayas, but lower in the Eastern Visayas at 7.8% from 7.9%.
Davao region registered a 9.3% inflation rate, down from 9.7%, but the rest of the regions in Mindanao had higher price gains, at 7.1% from 7% in Soccsksargen and 7.4% from 7.3% in Caraga.
The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) had an inflation rate of 6.3% in December 2022, higher than the previous month’s 6%, the PSA said.
But despite the readout accelerating to a 14-year high, the Ibon Foundation said “family incomes really haven’t been increasing” and this is the problem, especially when “prices are not just rising but rising very rapidly”.
Africa shared as an example the nominal wages that remained stagnant in 11 of 17 regions in the Philippines in the second semester of 2022.
He said this meant “real wages were falling as prices rose”.
“Where wages were hiked, in Ilocos, Calabarzon, Bicol, Northern Mindanao, Soccsksargen and BARMM, the increase just averaged 5.9%, which barely kept up with inflation for the whole year,” he added.
Based on data from the National Wages and Productivity Commission (NWPC), Metro Manila has the highest minimum wage at 533 Philippine pesos (RM42) to 570 pesos (RM45), but the Ibon Foundation said last month’s readout had already pushed the living wage for a family of five to 1,146 pesos (RM90) nationwide.
The think tank said the average nominal wage of 404 pesos (RM32) all over the Philippines is just one-third, or 35.3%, of the nationwide family living wage, while in Metro Manila, the 570 pesos (RM45) only translate to 49.8% of the wage that a family of five needs to live decently.
BARMM has the lowest minimum wage of 306 pesos (RM24) to 341 pesos (RM27). Next are Mimaropa 329 pesos (RM26) to 355 pesos (RM28), Caraga 350 pesos (RM27.60), Zamboanga Peninsula 338 pesos (RM26.7) to 351 pesos (RM27.70), Soccsksargen 347 pesos (RM27.40) to 368 pesos (RM29), and Bicol 365 pesos (RM28.8).
According to Africa, 1.7 million, or 55%, of the 3.1 million net jobs created since June of last year are in precarious self-employment (329,000) or other informal work as household help (167,000) or family farms or businesses (1.2 million), with 634,000 classified as unpaid family workers.
“Still, wage earners likely even had it better than the mass of non-wage earners,” he said.
According to Africa, since Marcos Jr assumed office, eight out of 10 (or 79.3%) of the jobs created are part-time.
The Ibon Foundation estimates that some 36.7 million, or 74% of those reported as employed, are actually struggling with precarious self-employment (13.4 million) or other informal work as household help (2.1 million), in family farms or businesses (six million), or as irregular workers in unregistered private establishments (about 15.3 million).
“The two million newly poor almost certainly draw from this huge mass of Filipinos that are in poor quality work and perhaps also some who lost their livelihoods for one reason or another,” he said. — Philippine Daily Inquirer/ANN
