⌛ Living in the Phil. is getting more expensive

Hi Round,

That was quite a shock to see how bad the exchange became back in 95'. I'm guessing most people, me being one, hope it doesn't go down that low again. I couldn't imagine surviving on a U.S. social security check with such a low rate. It kinda makes me curious what expats do for income when exchange rates get so low.

Tom

 

I keep reading about recession in the paper. So it may be a while before the exchange rate will be better.

 

Three issues that come to mind that will have negative effects on the local economy here.

The U.S. inflation and devalued dollar, which affects exchange rates, in turn reducing the real Peso amount in foreign remittances to the Philippines. Over 13 billion total world wide come every year, most from the U.S. a 25% drop (in exchange rates) in the last 2 years in exchange rate means a lot less Pesos coming in.

Number two are oil prices, which are having an effect already on commodities.

Three is the recently announced rice shortage in the Philippines, they are figureing a two month shortfall in supply, necessitating even more imports from Thailand etc.(The Philippines is already the number one importer of cereal grains in the world). Not sure if this is a per capita figure.
Rice prices have jumped almost 30% in the last week at the Dumaguete market. 22P per kilo to up to 31 P per kilo.

Add all of the above together and you have a disaster waiting to happen here, not for foreigners particularly, but for the average Filipino family.

 

errrm tfa 25 peso in '95 was way better than 41 now... house, beer and food was one third at that time, SMB 7 -8 peso in a shop... I am sure RHB knows the prices for what he has to buy his stock now...

 

Ahhh...thanks for the reality check. It helps to know what the cost of living was back in 1995.
I find it funny that the common gauge for purchasing power is the price of SMB!
:D

 

Meanwhile, back in the U.S....

Here's my money....

 

Timn8ster,
What is wrong with your money??? I am more worried about the size of your hand..hehe
SMB is easy to remember as the price is printed on the top.

 

Rice at 44 Pesos per kilo today (100% increase in less than three weeks), Sadly, cheaper to drink Red Horse, except those prices just went up 2 pesos per liter as well.
Speculators are hoarding grains now, corn is scarce as well due to crop failures locally. That was always a cheap alternative for rice in the local economy.

Buy pancit futures...

 

The rice issue leaves me dumbfounded. It was a big enough shock to learn that the Philippines has to import rice but when Malacanang announced reducing or eliminating tariffs on imported rice I was really confused. It would make more sense to give the tariff money to Filipino rice farmers so they can produce more rice. What do I know, I'm just a stupid peasant.

 

This is a big issue, they can't afford to put tarriffs on imported rice or the artificially higer price will have long term effects beyond the temporary shortage.
Additionally there is reason to believe that there is no way the Philippines will have the physical capacity to supply its country cereal grains no matter what the incentive. The population is growing unbelievably. and they are importing rice constantly as it is. Arroyo is on a rice buying mission as we speak.
The other solution is to move the population to a protien vs, a starch diet, which is beginning to happen in other Asian sectors. The problem there is animal protien is inefficient, have to feed pigs and cows grains which are already in short supply.

The poor folks here are suffering already, this just decreases their food intake, less money and higher prices.