The rising inflation in the Philippines is one of the biggest issues that the whole country faced this year. The change in prices shocked everyone and got people asking: “What is happening?”
If you compare the prices of goods from the last few years with the prices in the Philippine market right now, you’ll see a huge difference. You’ll notice that you can buy more with your twenty pesos before than today. There are even stories from your grandparents about how they can buy a meal with just one peso. You might look at them weird when you hear these kinds of stories because your one peso today can only buy one candy today, but that is a true story. And the reason why you’re not seeing the same prices now is that of inflation.
Inflation causes the prices to move and this 2018, the Philippines is experiencing the highest inflation rate for the last 9.4 years. As of August 2018, the inflation rate is at 6.4% and it’s the highest in the ASEAN. But more than the numbers and the statistics, it’s important for everyone to understand how inflation is affecting the whole country.
What Is Causing This Inflation?
A lot of people might not be aware of the factors that might be causing inflation. It’s easy to see the effects today, but knowing the factors is important so that you can prepare yourself from its possible effects. Here are some of the factors that you should know about.
- Rising Oil Prices Worldwide
The Philippines import huge amount of its oil from other countries. Since the price of oil in the global market is also rising, this means that countries like the Philippines are paying more for their oil imports.
- PESO-USD Exchange Rate
You might also notice the weakening of peso for the last few months. In fact, it’s the lowest exchange rate that the country has ever seen for the last 12 years. The weak peso contributes to the high inflation rate because the Philippines is a big importer. Every time the country transacts with other countries, it is paying in foreign currencies. This means that the cost of imports is higher now.
Are You Affected By Inflation?
Everyone is affected by inflation. If you would notice, the rising prices of goods made the buying power of your money weaker. You won’t be able to buy the same amount of goods with your 100 pesos as you would a couple of years ago. Some people might not feel the effects of higher inflation because Filipinos are naturally hard working and they will do whatever it takes to keep up and feed the family, even if it means working overtime or taking another job. However, there are poor Filipinos who are struggling to make ends meet. Perhaps, they are the ones who are really struggling because of inflation. If a poor Filipino family can barely manage with 100 pesos a day last year, imagine how they are going to make it through today, when goods are even more expensive.