Revisiting the Asian financial crisis

MOST of our readers were probably not born yet, but I was already 47 years old in 1997 when the so-called “Asian financial crisis” weakened the currencies of Thailand, Indonesia, Malaysia, South Korea and the Philippines.

I am in no position to explain how or why it happened. But I remember that the Philippine peso had plunged in value against the U.S. dollar — from PHP 20 to PHP 26 in 1997 to PHP 45 in 1998.

Today, one U.S. dollar equals — oh no! — PHP 62.80.

If inflation were “fiction” and prices of goods had remained constant — taking off from the year 1960 — the Philippines would have been an ideal place to live in. Wistful thinking, yes, but for the information of today’s millennials, let’s pretend it’s possible.

In 1960, a PHP 0.01 copper coin (one inch in diameter) could buy a piece of wrapped candy; PHP 0.05, two pieces of pan de sal; PHP 0.10, a bottle of soft drink or a 10-kilometer jeepney ride; and PHP 1, a big can of corned beef.

“Those were the days, my friend,” goes an old song, “we’d thought would never end.”

I was 10 years young in 1960 when our parents took us four kids to Quezon City for a two-month summer vacation. Our PHP 200 baon took care of the house rental, food and shopping expenses.

PHP 1 at that time was stronger than today’s PHP 100. In fact, the rental rate for the two-story apartment we were occupying at 23-A Dapitan Street was only PHP 60 per month.

At that time, the minimum wage nationwide was PHP 4 a day or PHP 120 per month.

The second time I went to Manila to pursue a college education in 1967, prices were still very affordable even if the minimum wage had increased to PHP 180.

Times have changed. A breadwinner making PHP 20,000 a month can no longer cope with galloping prices.

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VAT REMOVAL ON SYSTEM LOSS A PALLIATIVE

WILL the removal of value-added tax (VAT) on system loss alleviate the problem of electricity consumers?

Take it from the president of More Electric and Power Corporation (MORE Power), Roel Z. Castro, who welcomes the removal of the 12% VAT on system loss.

MORE Power is the distribution utility that serves Iloilo City.

The Department of Energy (DOE) estimates that this development will lower overall power costs for consumers. For an average household consuming 200 kWh, this translates to PHP 20 to PHP 30 in monthly savings.

Therefore, tax on system loss is just a very small part of the problem. The bigger one still concerns the declining supply from power plants. Since there are already around 260 power plants in the Philippines, it is disturbing that the big ones conk out at the same time, thus triggering power shortages.

I can imagine the makers of solar lights, solar fans and other solar appliances celebrating.

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CEMENT PRICE MAY RISE AGAIN

THE price of cement now ranges from PHP 253 to PHP 260 per bag and may rise again due to surging fuel and logistics costs.

A homeowner told us that it’s a big jump from its previous average price of around PHP 230 per bag.

There are two factors triggering the price increase: high demand for cement due to the massive construction of high-rise buildings throughout the Philippines; and the cartelization of the local cement industry.

In the past, cartel- and demand-triggered price hikes of cement were always followed by massive smuggling of cheaper cement from China.

As reported by the Department of Trade and Industry (DTI), China’s share of total cement imports rose from 11% in 2025 to 23% this year.