MY NEW BLOG: The Ciudadista: Life in the City

Tuesday, November 23, 2004

Filipino Families need at least USD 275 per month to survive

The cost of living in the Philippines is getting more expensive for the common Filipino family although most foreign visitors and Filipinos earning from overseas may find living in the islands cheap.

The average daily wage in Metro Manila is only PHP 280 or USD 4.98 yet studies by think tanks such as the Ibon Foundation say that a family needs at least PHP 500 or USD 8.89 per day. The reason for this is no surprise. A kilo of diced pork is priced at PHP 167 already, how about the cost of rent and utilities?

Most families near and below the poverty line have to compromise their children's nutrition dramatically just to "make ends meet." A lot of impoverished families eat only instant noodles or rice with just salt or sugar sometimes if they get "lucky" rice with canned sardines.

Socialist groups in the Philippine House of Representatives such as the Bayan Muna Party have been pushing for a nationwide PHP 125 daily wage increase in an effort to alleviate the condition of people.

However, I doubt if a wage increase will benefit the economy as a whole. You see, if you are a businessman and is asked to raise your wages of employees in order to fund this rise in cost you can either cut staff or raise prices. Both options can either cause other problems such as unemployment and high inflation. I believe that there are companies in the Philippines that can pay for higher wages without having an effect on their profits but how about the small and medium sized firms all over the Philippines?

The only solution I seen in the mean time is to keep the prices of basic goods as low as possible. Access to low priced basic goods must be guaranteed to all those in dire need. The government must do its job in helping to generate economic activity in the country. Economic activity will most likely lead to more investment, stable prices and more employment. When there are more investments, economic activity, stable prices and less unemployment it could lead to higher wages and people escaping poverty.

Despite Gov’t Figures, the Poor Are Now Worst Off
By Danilo AraƱa Arao