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Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts Volume 3, Number 23 July 13 - 19, 2003 Quezon City, Philippines |
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Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts Volume 3, Number 23 July 13 - 19, 2003 Quezon City, Philippines |
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Analysis The latest figures on inflation and family living wage should be more than enough reason for the labor groups to renew their call for a substantial wage hike. In the Autonomous Region in Muslim Mindanao (ARMM), for instance, a family of six needs an additional income of P18,340 (US$346) every month to provide for basic needs. By
DANILO ARAÑA ARAO
Despite this development, the Arroyo administration claims that this is no cause for alarm since the economy remains stable. But a cursory look at the statistics shows dire implications on the people’s purchasing power. Purchasing power refers to the buying capacity of a currency compared to a given base year. The national government currently uses 1994 as the base year of the consumer price index (CPI), the basis for computing the inflation rate. The latter, on the other hand, is defined as an increase in the average level of prices of goods and services. The latest figures on inflation mean lower purchasing power of the peso (PPP). As of June 2003, the PPP is pegged at P0.57 (or $0.01, based on an exchange rate of P53.34 per US dollar) in Metro Manila and P0.59 ($0.01) in areas outside Metro Manila. (See Table 1) The Autonomous Region in Muslim Mindanao (ARMM) currently has the lowest purchasing power of P0.52 ($0.01). Ironically, the ARMM also has the lowest legislated minimum nominal wage rate of P140 ($2.62). This means that in real terms, the daily minimum wage in ARMM only amounts to P72.31 ($1.36). To make things worse, families of six living in ARMM need the highest living wage of P714 ($13.38) per day, or P21,420 ($401.57). (See Table 2) Family living wage refers to the amount a family of six needs to fulfill food and nonfood expenditures, as well as provide for 10% savings. Analyzing the minimum nominal wage rate and the required family living wage, it appears that an ARMM-based family of six needs an additional income of P18,340 ($343.83) monthly to fulfill food and nonfood requirements, as well as have at least 10% in savings. According to the Department of Labor and Employment (DoLE), a family of six as of May 2003 in Metro Manila needs a living wage of P556 ($10.42) per day, or P16,680 ($312.71) monthly. In areas outside Metro Manila, the required family living wage ranges from P366 or $6.86 (Eastern Visayas) to P714 or $13.38 (ARMM). Bulatlat.com
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According
to the National Statistics Office (NSO), the inflation rate as of June 2003 is
pegged at 3.4%, a seven-percentage point increase from 2.7% in the previous
month. In Metro Manila, inflation rose from 2.5% to 4.5%. In areas outside Metro
Manila, it also slightly increased from 2.9% to 3.0%.