Editorial

Cost cutting measuresvis-à-vis inflation rate

How long is your belt for the tightening of family budget amid the current, record-high  5.2 percent inflation rate? Government economic managers  say the Tax Reform Acceleration and Inclusion  Law is not to be blamed for the high inflation rate but the weakening of the peso and spiraling cost of petroleum products which industries rely on heavily for production. But some economists say the TRAIN Law is partly to be blamed, with one saying that excise tax on fuel under the first tranche of TRAIN should have not sailed through.If fuel price soars high, so do other commodities.

The Department of Industry admitted that the cost of consumption goods have already jacked up, if we compute it by the inflation rate or lesser.

Because of upswing fuel cost, public transport groups are asking anew for a P2 fare increase to compensate for the losses. Again, the employee sector demands for a P50 to P100 increase of daily wage but the employer groups could only give P15 as much, which by the count would only go to fare cost, if not hardly. The poor sector also want higher fund subsidy to help incruisingthrough the cost of consumption burdenand for educational support. This goes on and on for other things such as the favorite ‘pan de sal.’

     

Based on account, the power value of the peso has decreased and consumers take consumption goods by trickle if only to make both ends meet… from the previous kilo purchase to a half or even one-fourth “as long as there is rice to fill the stomach,” as one mother quipped. But too much rice means more ‘sweety’ intake, hence, the danger of developing certain ailments such as diabetes. Already, some skip breakfast which is the most important meal for the day to make us through in work and studies… and there is fear that the succeeding meals be also sacrificed should intake be that minimal, especially among the poor sector because of inability to cope with consumption cost.

What are our economic managers doing now to address the inflation rate? To raise the wages would also trigger high cost in commodities as experienced in the past. Economic experts say the inflation rate has to be lowered to 2 percent to 4 percent through measures to soften the crisis. The foreseeable cost reduction of fuel cost world-wide would soften inflation rate, but our country has no control over this item. If only families have something much to spend, like the previous months of November and December after all those bonuses and extra sums, then we can face the inflation. Peso savings will be depletedif used to reinforce the needed spending in the face of high costs of living.

Cost cutting is meanwhile the logical remedy in facing economic crisis… spending only on those essentials, foremost food consumption. Cost for entertainment such as computer gaming in shops could be set aside until the cloud is all clear, but not sacrificing those savings for emergencies (if at all we have such savings). Government agencies, too, have to cost-cut in order to earn savings for more important services.

Yes, we have to develop cost-cutting culture to address high inflation rate. Simple living is at best for the moment so long we meet the basics in dear life. Rigid budgeting folks but not really subtracting the very basics in life. Learn home economics. Let is trust on thriftiness but not at all stingy or “kuripot.”