LOWER PURCHASING POWER A customer buys vegetables at a market in Quezon City. Increasing prices erode consumers’ purchasing power. RAFFY LERMA
FOR VOTERS, what are the major issues in next year’s general elections?
For Pedro Maranas, a 38-year-old junk collector in Las Piñas City, the issues are poverty and jobs with proper wages.
“Life is harder nowadays. It is even harder now that we hear about corrupt government officials stealing public money,” he said.
Like Maranas, most Filipinos are concerned about reducing poverty, improving wages and eradicating official corruption, according to a recent survey by Pulse Asia Inc.
Pulse Asia’s Ulat ng Bayan survey, conducted from May 30 to June 5, showed that the respondents were most concerned about inflation and wages.
It showed that controlling inflation (47 percent) and improving wages (46 percent) are their major concerns, followed by official corruption (39 percent), employment (36 percent) and poverty (35 percent).
Other urgent national concerns include peace (21 percent), criminality (20 percent), rule of law (16 percent) and environmental destruction (15 percent).
Filipinos are least concerned about controlling population growth (9 percent), national territorial integrity (7 percent), constitutional amendment (4 percent) and terrorism (4 percent).
Across geographic areas and socioeconomic classes, the only issues deemed urgent by majorities are wages (53 percent in Metro Manila), employment (51 percent in the Visayas), and inflation (53 percent in Mindanao and 52 percent in Class E).
In Luzon outside Metro Manila, the topmost concerns are wages (46 percent) and inflation (45 percent).
Respondents from Classes ABC and D are most concerned about wages (48 percent and 46 percent, respectively), official corruption (43 percent and 42 percent, respectively), and inflation (40 percent and 46 percent, respectively).
The survey, which used face-to-face interviews with 1,200 respondents, had a margin of error of plus-or-minus 3 percentage points.
Inflation
Nearly half of the respondents (47 percent) cited controlling inflation as an urgent national concern in the latest Pulse Asia survey, with 42 percent in Metro Manila, 45 percent in Luzon outside Metro Manila, 47 percent in the Visayas and 53 percent in Mindanao, as well as 40 percent in Class ABC, 46 percent in Class D and 52 percent in Class E echoing the sentiment.
What is inflation? It refers to the rate of increase in prices of goods and services that consumers usually buy. To measure inflation, economic analysts look at the consumer price index (CPI), which represents the general cost of products typically bought by consumers. Inflation, which is expressed as percentage, reflects an increase in the CPI.
In August, inflation was at an all-time low of 0.6 percent. This means that on average, the prices of goods and services consumers bought during the month was 0.6 percent higher than a year ago.
Despite decelerating inflation, controlling the prices of goods and services is among the top concerns of most Filipinos.
“It only shows how sensitive economic welfare is to even very small changes in prices and wages, especially insofar as the poor and near-poor are concerned,” said Ernesto Pernia, professor at the University of the Philippines’ School of Economics.
“Also, among economic variables, prices and wages are among the most volatile—they can go up or down almost day-by-day,” Pernia added.
How does inflation affect consumers?
When prices of goods and services rise, the value of money declines.
Inflation erodes the purchasing power of consumers.
If inflation is high, consumers may have to spend more to buy the same goods and services they purchased a year earlier. Or, in other words, the same amount of money would buy less after inflation.
Moreover, if inflation accelerates while wages stay the same, it would require a bigger portion of people’s income to buy the same goods and services.
Better wages
Increasing wages (44 percent) is statistically tied with controlling inflation (46 percent) as the number one concern for Filipinos, according to Pulse Asia’s March 2015 survey, given the survey’s overall error margin of plus-or-minus 3 percentage points.
The survey showed that improving wages is statistically a much higher concern (53 percent) than inflation in the Visayas where only 44 percent said that inflation was a concern.
A Cebu housewife said, “Life is hard for although one has a job, the wage is low but prices are high.”
Calls for wage increases followed increases in fuel and power prices and changes in the exchange rate—the usual triggers for higher prices.
During the celebration of Labor Day this year, different labor groups called for a national minimum wage of P16,000 a month, or about P530 a day.
But the government has always been wary of allowing across-the-board wage increases. Minimum wage adjustments have always been decided by regional wage and productivity boards.
In July, Labor Secretary Rosalinda Baldoz claimed that due to wage reforms, only five of 98 minimum wage rates were below the poverty threshold.
She said in a statement, “In July 2010, there were 30 minimum wage rates in nine regions—out of 137 minimum wage rates—lower than the poverty threshold. As of today, only five remain below the poverty threshold, and all these will be closed by 2016.”
Baldoz said she expected that by the end of 2015, there would be only one minimum wage rate below the poverty threshold. “By May 2016, all minimum wage rates will be above the poverty threshold,” she said.
But, according to economist Mahar Mangahas, head of pollster Social Weather Stations, the real issue is whether real wages (wages adjusted for inflation) are rising in line with economic growth.
In his column (PDI, March 21, 2015), Mangahas said there was much trumpeting about the high rate of economic growth. If that economic growth is inclusive, then the average real income of workers, especially low-skilled workers, should be rising commensurately, he said.
At any time, 92-95 percent of the labor force are employed. The way for the employed to share in economic growth is for their real wages to rise, he said.
But are real wages rising?
The title of Mangahas’ column had a question mark due to the near-absence of data by which to determine how real wages if at all, over time.
The scarcity of data on real wages contrasts with the abundance of data on the real gross domestic/national product per person over time. There is no substitute for time-series as a means of measuring the extent of progress.
Increasing wages is a multifaceted concern. The policy options have to include inflation and its triggers (increases in fuel, oil and power prices, exchange rate, calamities), purchasing power, living minimum wage and increases in real wages (and the need to have data on real wages in the first place), among other things.
Official corruption
Around two in five (39 percent) Filipinos deem fighting official corruption an urgent national issue, with 33 percent in the Visayas, 38 percent in Luzon outside Metro Manila, 40 percent in Metro Manila and 44 percent in Mindanao, as well as 31 percent in Class E, 42 percent in Class D and 43 percent in Class ABC sharing the sentiment, according to Pulse Asia.
In the aftermath of the P10-billion pork barrel scam involving businesswoman Janet Lim-Napoles, hundreds of thousands of Filipinos marched to Rizal Park in Manila and gathered in public places in other parts of the country in March 2013 to call for the abolition of the Priority Development Assistance Fund (PDAF).
With the Constitution upholding public office as a public trust, the government has been reiterating its policy to maintain honesty and integrity in public service by fighting graft and corruption.
Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act, for instance, prohibits public officials and employees from directly or indirectly receiving any gift, present, share, percentage, or any other form of benefit in the course of the performance of their official duty.
Relatives and people with family ties or close relations with public officials are also prohibited from intervening or taking advantage in any business, transaction, contract or application with the government.
Likewise, people giving any form of benefit or influencing corrupt practices, will be punished together with the erring public officials.
Punishment may include fines, imprisonment, perpetual disqualification from public office, and confiscation or forfeiture in favor of the government of any prohibited interest and unexplained wealth.
President Aquino’s reforms have led to improvements in the Philippines’ Corruption Perception Index (CPI) ranking by Transparency International, a Berlin-based civil society organization engaged in fighting corruption.
The Philippines’ CPI moved 40 notches higher, from 134th place in 2010 to 94th in 2013.
Government efforts at fighting corruption included filing of tax evasion cases against businessmen, and the filing of plunder charges against former President Gloria Macapagal-Arroyo, Napoles, Senators Juan Ponce Enrile, Bong Revilla and Jinggoy Estrada, among other politicians, for misuse of government funds.
A Senate blue ribbon subcommittee is investigating Vice President Jejomar Binay on charges of corruption involving alleged overpricing in the construction of the P2.28-billion Makati City Hall Building II and millions of pesos in kickbacks from infrastructure projects when he was mayor of Makati City. He has denied the allegations.
Law amendments have also been passed to strengthen measures to “hold the corrupt accountable.”
Republic Act No. 10167 now waives the requirement for the Anti-Money Laundering Council to notify suspected launderers that their bank accounts are being monitored, while Republic Act No. 10168 now holds financial support for known terrorists as a stand-alone criminal offense.
RA 10365 now requires foreign exchange establishments, real estate dealers and jewelry and precious metal dealers to report any suspicious transactions—an amendment that would shield the Philippines from being blacklisted by the International Financial Action Task Force.
A blacklist could mean difficulties for overseas Filipinos in sending money home, as they would be required more documentation.
More jobs
Creating jobs has been a top campaign promise ahead of national elections over the years, with candidates trumpeting their plans and promises to provide employment for all.
In 2010, when Mr. Aquino, then a senator, was campaigning, he said job generation was “the No. 1 item” on his platform.
In a Pulse Asia survey conducted from July 1 to July 11, 2010, immediately after the Aquino administration took office, 36 percent of the respondents pointed to job creation as the top issue that should be dealt with by the new administration.
In his latest State of the Nation Address, Mr. Aquino said “sound macroeconomic policies combined with reforms in governance made the country a viable investment destination,” paving the way toward the creation of quality employment opportunities for the people, among other things.
But millions of Filipinos remain unemployed.
While the unemployment rate has decreased since 2010 (from 7.4 percent to 6.8 percent in 2014, according to estimates from the National Economic and Development Authority), the latest Labor Force Survey puts the national unemployment rate at 6.5 percent as of July this year. This translates to about 2.7 million unemployed Filipinos.
About one in three Filipinos (36 percent) cited “creating more jobs” as among the most urgent national concerns, with majority in the Visayas (51 percent), 37 percent in Metro Manila, 34 percent in Luzon outside Metro Manila and 26 percent in Mindanao holding this opinion, as do 41 percent in Class E, 35 percent in Class D and 32 percent in Class ABC.
“Unemployment rates are relatively high possibly due to lack of job opportunities or due to skills gaps relative to the skills and competencies requirements of the labor market,” said a 42-year-old business educator from Iligan City.
“When people are unemployed, they would lack the economic capacity to provide food, education, and home for their families. When people are unemployed, they may be forced to engage in criminal (e.g., theft, robbery etc.) or unethical acts (e.g., swindling, corruption etc.) that can help them acquire these economic requirements,” he said.
“It is an issue in the [coming] elections because it is ideal that the people who will [be elected] have this concern [on] their political agenda. All elected officials should work toward creating an environment that encourages economic activity and inclusive economic progress. I think economic and social concerns are [closely linked],” he added. Compiled by Almi Atienza, Ana Roa, Marielle Medina, Kathleen de Villa, Kate Pedroso, and Minerva Generalao, Inquirer Research
Sources: Philippine Development Plan 2011-2016, Statistical Challenges in Peace and National Security Studies in the Philippines, Inquirer Archives, 1987 Philippine Constitution, Republic Act No. 3019, gov.ph, investopedia.com, bbc.com
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