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Depreciating currency makes Filipinos poorer

Church officials say prices of food items and travel costs have increased, hitting the poor harder

People queue for free packed meals distributed by the Catholic religious order, Society of the Divine Word (SVD), in Manila on June 24, 2022

People queue for free packed meals distributed by the Catholic religious order, Society of the Divine Word (SVD), in Manila on June 24, 2022.  (Photo: AFP)

Published: September 22, 2022 03:59 AM GMT

Updated: September 22, 2022 06:23 AM GMT

Poor Filipinos are being hit hard by the unprecedented and fast depreciation of the Philippine peso which has seen the cost of essential commodities spiral, Church officials say.

The peso began falling sharply  in July when it was around 55 against the US dollar, but by Sept. 20 it had depreciated to an all-time low of 57.7.

“Rich families always have multiple sources of income. Their income is not usually sourced from one employer like poor families. So, they have other means to cushion the effect of rising fuel and commodity prices,” said Bishop Jesse Mercado, chairman of the Commission on Population and Development of the bishops’ conference.

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Increasing imports and decreasing exports, slowed by weakening Chinese demand, along with a widening trade deficit are reasons for the weakening of the peso, economic experts say.

Bishop Mercado said 23.7 percent of the Philippines' 110 million population were already living below the national poverty line in 2021, referring to data from the Asian Development Bank (ADB) and that this number was increasing.

One of the indications of poverty was also the number of babies born and survived within the first five years, the prelate said in an interview with Radyo Veritas on Sept. 20.

"It is like one meal for the family here in our parishes"

“For every 1,000 babies born in this country in 2020, 26 died before their fifth birthday. It shows that there were still many of our countrymen who could not maintain having children because of their pay,” Bishop Mercardo added.

Father Rowan Regaldo, head of social service agency Caritas in Daet Diocese, said although the depreciation looks insignificant, it hits the poor hard.

“The rich may not feel the gasoline price increasing by two pesos. But for the poor, it is very substantial. It is like one meal for the family here in our parishes,” he said.

Food items and travel costs have increased, making life difficult for those on the bottom layer of the social pyramid.

Philippine authorities had approved the fare increase for jeepneys and tricycles and it would take effect from Oct. 3 to cope with the rising price of fuel.

The cost of food items such as rice, flour, bread, and cereals increased by 2 to 8 percent in August while that of milk, cheese, and eggs increased by 6 to 19 percent. The price of sugar, confectionery, and desserts recorded a 26 percent increase, according to data released by Philippine Statistics Authority.

"Who can support a family on less than ten dollars a day?"

Food inflation, which was at 6.5 percent in August, is expected to further grow to 7.50 percent by the end of the quarter ending in September, according to trade experts.

The Philippines’ food production comes at a cost. In order to help the farm sector to produce food, the country heavily imports fertilizers and feeds for animals and fish as the local supply remains inadequate to the requirements.

Despite the depreciation, the government has not increased the national daily minimum wage, which has remained unchanged at 537 pesos (US$9.4) since 2019.

“If the exchange rate has climbed to 57 pesos to the dollar, the minimum wage should reflect that increase. With the soaring prices of travel fares and groceries, who can support a family on less than ten dollars a day?,” Father Regaldo said.

Housekeeper Gloria Beltran told UCA News that earns only the minimum daily wage but "it is not enough to support my children who are in school. Two of them are in college and one is about to graduate from high school."

Nykol Villadolid, who works as a school janitor for the daily wage, said "life has become tougher. I have more loans than before. I needed to [take loans] because for me that is the only way to survive. The minimum wage is so low."

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