A Candid Look at Inflation

By Herbert Vego

“THE House of Representatives’ version of a legislated wage hike bill, which increases minimum wage earners’ salaries by ₱200 per day, has been approved on third and final reading,” yesterday’s newspapers reported. Good news?

Assuming it ripens into a law, it could help.  However, since that’s not all there is to monetary inflation, watch for the aftershocks.

In economics, inflation means more money in circulation. Hence, it also refers to increase in prices over a given period of time.

If inflation were nothing more than air in a tire to ride on, then prices of goods today would have been as good as yesteryears’ when one could survive on a hundred pesos in – believe it or not — one whole month.

But where increases in prices of prime commodities outrun salary hikes, that’s bad news.

I remember those grade-school days when my late father would often remind me to set aside coins (at that time mostly made of silver) for my piggy bank, joking that if I could fill it with a million pesos, I would have enough to spend till death. In those days in the 1950s, a million pesos seemed inexhaustible.

My father, a school teacher, was earning only ₱120 a month. But it was big enough to keep us alive and comfortable.

For sure, septuagenarians like me have already made millions of pesos in decades of working hard for the money. But it’s gone with the wind.

Today, a million pesos stashed away in the bank could last in only more or less three years for a family of five.

Sa totoo lang, we Filipinos have much more money now than we had half a century ago, but it could buy much less goods. A thousand pesos could melt in a single visit to a mall. But — believe it or not, young ones — the same amount could feed a family for six months or more in the 1950s and even in the early ‘60s!

I should remember. When I was just a lad of 10 in 1960, our parents took us four kids to Quezon City for a two-month summer vacation. Looking back, it seemed like a miracle that our two-hundred-peso baon took care of the house rental, food and shopping expenses for two months.

It was not impossible because one peso at that time was stronger than today’s one hundred pesos. In fact, the rental rate for the two-storey apartment we occupied on 23-A Dapitan St. was only ₱60 per month. By sharing the same house with another family, we spent that amount in two months.

The second time I went to Manila to pursue college education in 1967, prices were still very affordable. The minimum wage had increased to ₱180.  How could I forget? At 17, I was a “job hire” in a post office by day, a college student by night.

In the mid-1970s, even when President Ferdinand Marcos had already declared martial law, the economy was still stable because price increases were infrequent and would be met with salary increases. As press information officer of a music recording company and freelance writer in Metro Manila, I supported my family on average monthly income of a thousand pesos, of which P80 went to apartment rental.

Times have changed. While much more money has gone into circulation, the average teacher’s monthly income – now more or less than ₱29,000 – can no longer cope with galloping prices. In short, the Philippine peso has atrophied.

It is useless to count on the government for rescue. The government has done more harm done good by implementing “tax reforms” – euphemism for higher taxes that warp the buying power of the peso.

The stagnant income of poor Juan dela Cruz has forced him to decrease consumption. He would buy a half kilo of meat instead of a kilo. He would cancel family vacation trips. He would stop going to the movies and make do with regular TV instead.

Even the supposedly affluent Filipinos can’t seem to catch up with inflation. This explains why more and more professionals fly abroad, leaving behind their lonely spouses and children.

-oOo-

BRIEFLY ON MORE POWER’S AUTO-RECLOSERS

AS part of its five-year development plan in Iloilo City, MORE Power has installed a sufficient number of auto-reclosers to address the “trips-off” mainly caused by momentary line faults.

Unlike traditional circuit breakers that require manual resetting, reclosers automatically reclose after a pre-set time delay. This reclosing action allows for the temporary clearing of faults, such as lightning strikes or animal contact, without causing prolonged outages.

This prevents longer outages by restoring service after a short delay, typically a few cycles, or up to three or four attempts.

If the fault persists after a few reclosing attempts, the recloser will lock open, isolating the faulty section of the line. This prevents further damage and allows repair crews to focus on the faulted area without affecting the rest of the network.