The real inflation rate

Nidah, a former janitress, knows she is poor, and getting poorer by the day. But she doesn’t know exactly by how much.
The inflation rate this June was at 11.4%. But for many Filipinos, the real inflation rate is not 11.4%; it’s higher.
Inflation is basically the rate at which prices increased. The 11.4% is the percent by which prices, in general, went up all over the country. It basically says that compared to last year’s June prices, prices in June this year are up by 11.4%.
But that 11.4% is the national average — in areas outside of Metro Manila (AONCR), prices were up by 12.3%. The national average is lower because in Metro Manila (NCR), the inflation rate was at 9.2%, which pulled down the national average.
But, as former National Treasurer Prof. Briones says, averages can mislead. The average age of a group of people may be 20, she pointed out once, but that will not change the fact that one of them is 60 plus and one is 19.
A closer look at the inflation rates reveals the same thing: last June, all over the country, prices for rice rose by 43 percent, compared to a year ago.
The inflation rate for food, beverage and tobacco (FBT) was at 16.5%. The inflation rate for food alone (for those who had given up smoking and drinking) was at 17.4%.
If you only had enough money to buy food, and nothing else, the inflation rate, as far as you are concerned, would be 17.4%.
The 11.4% inflation rate was arrived at because there were other items that went into the computation: fuel, light and water (FLW), housing and repairs (H&R), services, clothing, and miscellaneous items. But how many of the poor can afford to spend on housing and repairs, let alone clothing?
Sometimes I feel that these statistics deny them even of the reality of their poverty. They are told that prices went up only by 11.4% — but that’s the national average. In SOCCSKSARGEN the inflation rate for June was at 18.9%; in CARAGA, it was 19.8%.
For Nidah, who lives in Metro Manila, it should be 9.2%.
Which is why Nidah, who spends all her money on food and fuel, light and water, is left wondering why she feels so much poorer today, when the government says that the inflation rate rose only by 11.4%.


One Response

  1. i couldn’t agree more..
    the real inflation is: the stuff you got in your trolley when you go to the market..
    usually with x cash you got full stuffs in your trolley, now, with the same x cash you only fill half of your trolley, or even the third.
    thats the real economy..

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