High prices, battered peso

Filipino consumers are now worried about soaring prices of basic commodities, the latest Pulse Asia survey revealed.

Sharp increases in the prices of basic food and other essentials top the list of concerns that 66 percent of the 1,200 respondents want the government to address immediately.

Across social classes, regulating inflation is the most urgent national issue for 71 percent of Filipinos in Class D, 58 percent in Class E, and 51 percent in Classes ABC.

Regionally, a large majority in Mindanao or 81 percent regard inflation as a pressing issue, 71 percent of those in the Visayas, 68 percent in Metro Manila or the National Capital Region (NCR), and 56 percent in balance Luzon.

The survey also indicated some 42 percent of Filipinos are unhappy with the government’s response. Understandable because Junior hasn’t done anything yet.

Overall, the top issues were: controlling inflation (up nine percent), creating more jobs (up six percent), fighting criminality (up five percent) and addressing involuntary hunger (up five percent). Pulse Asia, however, explained that its newest audit does not account for significant events such as the depreciation of the Philippine peso versus the US dollar.

The Pulse Asia survey results were confirmed by a consumer sentiment survey of the Bangko Sentral ng Pilipinas. The BSP found weakened consumer sentiment across all income groups in the third quarter, with the family financial situation recording the lowest confidence index or CI.

The overall CI declined to -12.9 percent from -5.2 percent in the second quarter. The decline in the index in the third quarter relative to the previous quarter indicates that the number of households with pessimistic views increased and continued to outnumber those with optimistic views.

The BSP explained that the weaker confidence among consumers was largely due to their concerns over the: (1) faster increase in the prices of goods and higher household expenses, (2) low income, and (3) fewer available jobs and working family members.

Aside from the reasons previously cited for the more pessimistic outlook in the third quarter, high-income consumers were also worried about the continuing public health risk posed by the COVID-19 pandemic and its possible adverse impact on the economy.

By geographical location, the consumer confidence in both the NCR and Areas Outside the NCR (AONCR) was more pessimistic in the third quarter.

Consumers are expecting a rise in interest rates and the peso depreciation against the US dollar.

It is not surprising that the percentage of households with savings decreased in the third quarter. Buying intentions for big-ticket items declined, as to be expected.

Households are resigned to a rise in the rate of increase in the prices of consumer goods and services, specially as the Christmas season approaches. This stem from their concerns over: (1) higher household spending for food, utilities, and other commodities, (2) limited supply of goods and services, and (3) depreciation of the peso against the US dollar.

With the peso almost at 60 to the dollar, the cost of living is expected to increase since we are a basically importing country, even for many of our basic food requirements like rice, sugar, and meats. And yes, fuel and electricity costs will rise with the OPEC decision to cut production by two million barrels a day.

Being a retiree, I can imagine how those in my generation are trying to cope with the rising prices on more or less fixed incomes from whatever pension plans they may have. Those with their retirement funds invested in mutual funds are now in trouble as the equity markets have fallen significantly here and abroad.

Those who had the foresight of converting their retirement funds to dollars are protected from the forex loss. But there is no protection from the losses from the declining values of equity investments.

Perhaps it may be better to take some losses now before the markets fall deeper into a full-blown recession and buy dollar denominated government bonds that are paying pretty decent returns.  Junior’s administration has just borrowed $2 billion via a bond offering to fund its budget.

National treasurer Rosalia de Leon said the successful $2 billion bond issue was in three tranches: $500 million with a  five year maturity at 5.17 percent; $750 million at 10.5 years at 5.609 percent, and $750 million at 25 years ESG at 6.10 percent.

The bonds offer regular income and is about as safe as the Philippine government is going to be. I guess Filipinos buying those bonds are effectively betting on the success of this government.

One Health Pass

After a friend read my column on tourism last Wednesday, he got in touch with me to complain about having to pay $70 for the One Health Pass. I told him it was for free and he just got scammed.

Kasi, when you google One Health Pass, the scam site comes out on top. Those guys are good at search engine optimization.

My wife was almost victimized by the same site. But when it asked for her credit card number, she got suspicious. She knew I didn’t pay for it when we traveled together. She called me and I confirmed it was free.

Actually, the usefulness of OHP is over. COVID travel restrictions should be discarded by now, as our neighbors have, to facilitate the entry of visitors and competitively boost our tourism industry. But if the government insists on using this pass, they should make it easy and safe to use.

Maybe the headline should be FREE ONE HEALTH PASS in big bold letters so even if it is not first in the Google search result, it can be seen right away and warn users about the scam site.

The other reaction I got was from a reader complaining about the lack of restroom facilities at the D’Mall area of Boracay. I haven’t been there in a long while, but like the reader, I was under the impression that they had fixed Boracay up already.

Tieza, DOT’s infrastructure arm, is on a restroom building binge, but in areas selected by politicians with little tourist traffic: Manolo Fortitch, Bukidnon; Samal Island, Davao; Carmen, Cebu and Medellin, Cebu. Pork projects as usual.

Basic concerns should be addressed by our tourism officials before they start delivering speeches.

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco