‘The cost of living’

We are back to the world of the living. After a long weekend vacation during the observance of the traditional All Saints’ and All Souls’ Day in our country, Filipino workers return to their respective offices and work places starting today. The long weekend holiday enabled many Filipino families pay respects to their dead loved ones by visiting their gravesites in cemeteries and elsewhere their remains were interred.

But, in our case, media workers don’t get to enjoy such holidays. It’s not a complaint because we get extra pay for working on holidays.

As the cost of living becomes more prohibitive, overtime pays beef us our diminishing purchasing powers.

Incidentally, this is also the first week of each month that the Philippine Statistics Authority (PSA) releases its official inflation figures covering the immediate past month. The average inflation rates are collated based on the monthly monitoring of the PSA of consumer price indexes (CPI) based on survey of selected basic goods and services. The CPI measures the trend of prices – up and down – from market monitoring of this basket of goods and services under the PSA watch list.

The PSA, an attached agency of the National Economic and Development Authority (NEDA), is also the same government office that regularly surveys and monitors the cost of living in our country. The PSA does this nationwide survey called the Family Income and Expenditure Survey (FIES) every three years. It is the main source of data on family income and expenditure, which include among others, levels of consumption by item of expenditure as well as levels of living and disparities in income of Filipino families and their spending patterns.

The PSA explained that the FIES sample survey is designed to provide income and expenditure data that are representative of the country and its 17 regions.  In the 2015 FIES, it used the household surveys of the 2000 Census of Population and Housing.  

As I gathered, the PSA is currently conducting its latest FIES and the results will likely come out in the first quarter of next year.  Thus, it would reflect the average of income and prices for this year and would be called as the 2018 FIES. The FIES are also the main source of data and guide of our government policymakers in crafting socio-economic and fiscal measures.

The latest FIES was done in 2015 and its results were released by the PSA in October 2016. Based on this survey, the average annual family income of Filipino families was approximately P267,000. In comparison, the PSA noted the average annual family expenditure for the same year was P215,000. Hence, Filipino families have average savings of P52,000 (income minus expenses) in a year.

Adjusting for the inflation for the two reference years using the 2006 prices, the PSA calculated the average annual family income in 2015 would be valued at P189,000 while the average annual family expenditure would be valued at P152,000.

From the same PSA survey, all regions showed increases in the average annual family income at 2015 prices. Families in the National Capital Region (NCR) had the highest average annual family income for both years at P425,000 in 2015 and P379,000 in 2012. Families in Davao Region where President Rodrigo Duterte comes from, had the highest increase of P53,000 in 2015.

In 2015, the PSA reported about 41.9% of the total annual family expenditures was spent on food.  For families in the bottom 30% income group, the percentage was much higher at 59.7% while for families in the upper 70% income group, it was 38.8%.

Speaking of food, we may have to brace again for another round of price increases of rice and other food products following the onslaught of typhoon “Rosita” last week in Northern Luzon provinces.

The Department of Agriculture-Disaster and Risk  Reduction Management Operation Center placed at P2 billion the damages on agricultural products like rice, corn and high value crops planted in 90,052 hectares of farmlands. The estimated damages also include the losses on livestock and fisheries.

Our so-called “rice bowl” provinces sustained the largest share of losses at P1.39 billion worth of the 76,696 hectares of palay destroyed or equivalent to 73,337 metric tons (MT). About 4,921 farmers in Benguet, Ifugao, Kalinga, Mt. Province, La Union, Pangasinan, Cagayan, Isabela, Nueva Vizcaya, Quirino, Aurora, Pampanga, Nueva Ecija, Tarlac and Zambales have been affected.

Losses in high value crops have reached P374 million affecting 7,040 hectares in Benguet, Ifugao, Kalinga, Mountain Province, Ilocos Sur, La Union, Pangasinan, Isabela, Nueva Vizcaya and Quirino. As reported to the DA, affected crops include coffee, fruit trees such as banana, mango and rambutan and assorted vegetables.

As for livestock damages, Isabela reported the biggest loss at 20,408 animal (pigs and chicken) heads affected amounting to P2.51 million. Damages in fisheries and irrigation facilities were also reported in Ilocos Norte, La Union, and Pangasinan amounting to P881,000.

Nonetheless, the National Food Authority (NFA) reassured the public they have enough imported rice stocks that have arrived already in its warehouses nationwide, particularly in Northern and Central Luzon to meet the demand for the staple. What is important is to ensure that NFA rice stocks are sold at government prescribed price.

Since typhoon “Rosita” unleashed its destruction towards the last few days of October, its effect on prices may not be reflected yet in the inflation figures that the PSA will officially release later this week.

However, any supply disruption of our so-called “food baskets” of rice, vegetables, fish and pig and poultry products will push up again prices in the markets. Fortunately, there have been four successive weeks of big-time oil price rollbacks.

So we may not be seeing inflation rate dramatically going up from 6.7% in September. It was 6.4% in August.

But the cost of living will still be costlier for us fixed income earners.