Issue of November 4, 2018

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Statistics and percentages

The headlines of our leading newspapers keep on barking about the inflation that is gripping the country. They contend that the inflation is rising and there is a need to toll the alarm bells to compel the administration to do something about it. Despite all this hype, the ordinary Filipino cannot intelligently comprehend what inflation is all about. Why? Because the manner by which the government explains it is too technical. Only the economists and the politicians understand what they are talking about.

Consider the following report made by Sen. William Gatchalian, as published in the Oct. 22 issue of the Manila Bulletin, page 6: “Prices of goods and services in the country continued to soar in September 2018 with the inflation rate of 6.7 percent, the highest registered inflation in the last nine years and bringing the year-to-date inflation rate to five percent, well above the government’s target of 2.4 percent and breaching the 2018 inflation forecast of the Bangko Sentral ng Pilipinas of 4.9 percent in August 2018.”

Probably the only thing I understood in the report is that there is an increase in the prices of goods and services in the country. All the others are garbled figures that do not seem to mean anything. Whether or not it is diminishing the purchasing power of our money and whether or not the earning capacity of the wage earner is severely being affected, I do not know. The report is too figurative and too statistical that I cannot understand where all those numbers came from.

When experts talk about inflation, there must be some sort of a starting point where comparisons can be made. It will be easier to know the impact of inflation on us if the explanation is simplified by saying that the P1 last year is now the equivalent of P10 this year. Nevertheless, this is not the case. They’d rather talk about percentages or numbers that mean nothing to the people.

For instance, if you say the inflation rate is 6.7 percent, where will this be equated? And how can this percentage be reconciled with the five percent inflation rate at the end of the year? Which is which? 6.7 percent or 5.0 percent? Besides, when the figure is pegged at a fixed rate, what is the basis of comparison? Is it the entire earnings of the country or is it the wages of the workers or is it the productivity of the nation? Very confusing as well as very intimidating.

Another problem in trying to understand inflation is the terms used. Economic planners define inflation in terms of the phrases like “Gross National Product” or GNP, “projection,” “year-end-goal,” and the like. By golly! The jeepney driver who ferries me from my residence to my working place is in a quandary on what these means. He hears it over his radio every day yet, he cannot relate how GNP is affecting his life. Because he does not understand the term, he refuses to admit that the standard of his life is either improving or digressing. No wonder, when surveys are conducted, most like him say that they do know and understand the impact of inflation on their lives. What they know is that last year, they were eating three meals a day whereas this year, they are only eating two.

The politicians keep on saying that there are “mitigating measures.” But this, too, is a blurry definition that is not being felt by the common tao. True, there is no difficulty in understanding the “pantawid gutom” program of the government; however, this hardly measures up as mitigating. This program has been in existence even before inflation was blamed for rampant poverty. What we see are people complaining because the value of their money is being radically reduced. While the government keeps on promising social justice to avert the ill-effects of inflation, we remain groping because we do not understand what is inflation or what it is all about.

We know that there are figures like the 6.7 percent or five percent, as the case may be, these figures are empty numbers without anything to explain it.

Neither can we participate in the “mitigating measures” because we do not know the extent of what is demanded of us. Should we also mitigate our expenses up to 6.7 percent? Should we lessen the standard of our living by five percent? You see, it is very hard to interact with people or improve their lives if it is being defined in terms of percentages and figures. It reduces us into mere statistics and commodities.

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