A lull between typhoons

By Herbert Vego

AS I write this, typhoon Egay has exited, leaving behind an estimated ₱2 billion pesos worth of losses in agriculture and infrastructure. But tropical storm Falcon is coming in and is forecast to steadily intensify into a typhoon within the next three days. We can only hope and pray for lesser magnitude.

We are sad, especially because the “tagkiriwi” month of August is just around the corner.  In local parlance, it is the leanest month of the year.

Why this “punishment” when we have yet to pay debts incurred in the past year?

Even we who think of ourselves as “middle class” grimace over unending inflation of prices of food and other basic commodities.

More often than not, we respond by pinching pennies. To make both ends meet, we buy less of our basic needs – say, a half-kilo of meat instead of the previous one kilo at the risk of our family going undernourished. But it’s really a losing game because the value of our money has diminished.

Even the greedy merchants who impose higher prices for bigger profit eventually see the erosion of their own gains whenever they buy their own needs at higher prices, too.

The phrase “A penny saved is a penny earned” no longer means what it says because it sheds its true value over time.

Therefore, why not make the most of it now?

Hasn’t the Great Book told us? “The love of money is the root of all evil” (1 Timothy 6:10).

Unfortunately, that “philosophy” could do more harm than good. A devalued peso has more value than no peso at all. So, why not implement cost-cutting instead?

Alas, cost-cutting hardly compensates, especially if it means scrimping on meals. While we can cut and slash expenses to the bone to conserve our bottom peso, we could get sick and land in a hospital. Going into more debt would then be unavoidable.

The only way to keep pace with inflation is to earn more, which is an elusive dream for the average Filipino wage earner; or have a “sideline” or small business in which to prosper.

Those who truly need a wage hike but don’t get it sink deeper in the quagmire of poverty.

Let’s take a look at today’s daily minimum wage which, if followed, is ₱610 for the non-agriculture sector and ₱573 for the agriculture sector.

If a worker were earning that much in the 1980s, he might have lived like a prince. Today, he has to endure a spartan existence (no TV, no ref, no computer, no phone) to have a roof over his head, and to feed, clothe and educate his children.

When my neighbor Eli suffered business reversal, he literally hooked his children into moving from private to public school to save on tuition by offering them bigger daily baon.

Indeed, the better challenge is always to beat inflation by outracing monetary inflation. There are cases, however, when getting it from increased income could aggravate the workers’ problem. For when laborers ask for wage hike across the board, their employer would need to hike prices of their products – which further fuels inflation.

The better alternative would be to stimulate demand by keeping prices low and thus produce more products.  With more products selling like hotcakes, both the producer and the consumers benefit. This is the “secret” behind the success of dry-fruit processors in Cebu.

Working abroad for better pay is an option for Filipinos who no longer see the “future” in the local job market. As the song New York New York says, “If you can make it there, you’ll make it anywhere.”

Oh well, I was there, but only as a tourist.