The real value of the peso, in terms of the workers’ purchasing power, is plummeting down due to higher inflation and Consumer Price Index (CPI) mainly because of the escalation of the war in the Middle East.
In a press release, General Alliance of Workers Association (GAWA) secretary general Wennie Sancho said, “It is as if we are being sucked into the drain downward in which we cannot recover and come out from the sinkhole of an economic fallout.”
The workers’ daily minimum wage in Western Visayas is P550 per day in the commercial and industrial establishments. The monthly salary of a worker would be about P14,300 gross pay in a month. As the Philippine peso continues to lose value, the economic implementation due to our debt burden which is projected to reach P19.06 trillion by the end of 2026, domestic debt is expected to rise at P13.28 trillion with a foreign debt of P5.78 trillion we find ourselves fighting against overwhelming odds, to keep our heads above water. Inflation rate could rise at 4 percent in 2027, he said.
With the CPI of 139.13 points, the daily minimum wage of P550 per day is now reduced to P420.47 in real terms. Instead of receiving the nominal wage of P14,300 per month, the real value of his wage is now P10,932.35. Simply put, a worker in Western Visayas lost almost P3,368 in one month due to the erosion of his purchasing power. He lost P130 per day. There was a significant diminution in the amount of his salary, Sancho said.
The restoration of the workers’ purchasing power that is rapidly deteriorating can be mitigated by wage adjustment or by implementing Emergency Relief Allowance to the workers. Unfortunately, the wage increase issue for the workers in the private sector is a remote possibility. It was discarded by Malacanang. The suspension of the transport fare hike was a clever move to sideline the wage increase issue, he said.
Sancho further speculated that the possibility of investment plight is not remote or even capital plight. Continued oil price hikes could cripple businesses and households. Rising prices and decrease in the standard of living could spark social discontent and possibly social unrest if the worsening economic problems are not addressed urgently.
The most vulnerable sector that will be devastated by the forthcoming economic tsunami are the low income households who are struggling to make ends meet, the informal sector or the “own-account” workers like the sidewalk vendors who do not have social protection – they shall bear the brunt of hyper-inflation. It might even lead to job losses due to the closures of small medium business enterprises who could not keep their business afloat. Higher input in agriculture could lead to the collapse of the sugar industry. All of us will be affected. Oil Price Hikes paint a worrying picture for labor. The handwriting is on the wall, he added.*
