People’s Endurance Amidst Poverty Cause by Inflation Rate

Determining and describing poverty opens up a minefield of methodological issues.

Yet to prove the most basic monetary explanation is highly difficult. The Peso a day
connection was demonstrated by putting together same poverty lines from our nation. When
we say poverty, there is always a cause. Even though there are many causes about it, but
nowadays, there is a major cause why all of us suffer hardships in terms of financial aspect.
This is what we called “inflation rate” that makes people confuse on how to manage their
resources for them to survive this crisis.

Inflation in the Philippines accelerated to a new 14-year high of 8.7% in January,

driven by rising utility, housing and food cost. Inflation increases poverty unevenly. In 2021,
poverty rose to 18.1 percent despite large government assistance. The economy has begun to
rebound but signs are emerging that the recovery will be uneven. Prolonged loss of income
has taken a heavy toll on the poorest households. However as of 2022, there are over 5.6
million Filipino families living in poverty, according to findings of the Listahanan 3 survey
released by the Department of Social Welfare and Development (DSWD). It also increases
the cost of food and worsens food scarcity, increasing the likelihood that families will remain
trapped in a cycle of poverty for generations. Thus, this might force you to cut out luxuries
and “tighten your belt” to keep up with the rising cost-of-living.

These situations can cause small increases in expenses can also reduce your
disposable income and erode the value of your savings over time. It can also be viewed as the
decline of purchasing power because a person's income cannot keep up with the increasing
prices of goods and services. Positively speaking, inflation rate is economically useful, while
high inflation tends to feed on itself and to impair the economy's long-term performance.

People in high-income households can typically weather rising inflation. But those in
low-income households lack control over their purchasing power. They often don't work jobs
where wages are adjusted to compensate for inflation. Those with the lowest income can't
rely on credit when cash flow is tight. And they live hand-to-mouth, so they don't have
savings to help them weather hard times. Thus, inflation intensifies the problem of poverty
particularly here in our country, Philippines.

A World Bank survey of 38 countries found that high inflation tends to lower the real
minimum wage, while also increasing poverty. If minimum wages increase less than the price
of goods consumed by wage earners, a workers' real income will decline. According to study
results, real wages fall by 14 percent when inflation doubles. Let’s put this way: Nominal
wages are how we typically think of income - it's the amount of money we get in our
paycheck. Real wages are represented by the amount of goods and services we can buy with
that money. When inflation increases the prices of goods and services but the nominal wage
stays the same, people can buy fewer things with the same amount of money. Therefore,
people have less purchasing power and their money is worth less. Inflation may not lower the
dollar amount in your paycheck, but it does increase your cost of living—making it more
expensive to buy goods and services.

Families living below the international poverty line often struggle to feed themselves.
When food is available and accessible, it's not always the food necessary for a healthy diet,
and a healthy diet costs almost three times the average food expenditure in low-income
countries. So, for those already struggling to eat, when the price of food rises, so do hunger,
undernourishment and malnutrition. Malnutrition in an expecting mother harms the baby's
development and decreases birth weight, which translates to a shorter life expectancy for the
child. It has often left him or her with impaired cognitive abilities that hinder learning and
school performance, subsequently affecting the child's future quality of life and income
earning potential.

How can the government solve the inflation issue that caused poverty among Filipinos
today? The 268-trillion budget for 2023 and the increasing debt at P13. 5 trillion as of
November 2022. Targeted subsidy and financial support to farmers and fisher folk must also
be prioritized to increase domestic productivity which will reduce prices and importation of
agricultural products. I pray that this truth will prevail in order to end this suffering among us.

KHEN DAVID R. CLAVE

10- MAPAGKAWANGGAWA