biz column: desperate housewives
MANILA, FEBRUARY 28, 2007 (STAR) DEMAND AND SUPPLY By Boo Chanco - I am told that Ate Glue feels pretty frustrated that people do not seem to appreciate how good the economy is these days. The peso is strong, the GDP is zooming to a three-year growth rate of 7-8-9 percent according to Malacañang, and the stock market has been spectacular. She blames media for being so downbeat so as to eclipse the good news about the economy. I suppose she is also about to blame the people for being blind to the good times and failing to appreciate how good a President she had been.
Oh well… the problem with Ate Glue is that she has stopped being a housewife who has to worry about daily market money. The only times she steps into a public market or even a super market for that matter, is to do some photo op inspection or to campaign. If she even knows how much a kilo of chicken costs these days, it is probably only because it is part of the briefing papers she gets regularly.
As I have mentioned in this column, I go to the supermarket every week. I developed this habit when I was with an advertising agency and I had to know what my client’s competitors are doing by way of in-store promotions. Recently, with my wife visiting our kids abroad for extended periods, I do the grocery alone. When she’s in town, we split the grocery list.
From personal experience, I know that if I were a minimum wage housewife, I would feel pretty desperate these days. Prices of prime commodities are on the rise. Milk, for instance, is on an upswing. Angel evaporated milk, a brand that is hardly known, went up from P22.95 when I shopped last Feb. 17 to P26.95 last Saturday at Shopwise Libis. They interviewed someone on ANC some weeks ago about it and the milk industry explained the price of milk imported from Australia had gone up because of the drought experienced down under.
I wonder however, if this is all there is to it. Assuming the dollar price of milk went up, the value of the peso has gone up significantly too. The strong peso should have covered the increase in the dollar price of milk to keep the peso price constant. Apparently, the peso was not strong enough. Or maybe the manufacturers and traders are not passing on the benefit of a strong peso to consumers. Or maybe, the cost of getting their goods out of Customs (you know… wink wink) has gone up significantly. Finding out the real score looks like a job for Ronnie Concepcion and his Consumer Price Watch, because DTI is sleeping on its job.
Speaking of the strong peso that Ate Glue is so proud of, she fails to realize that the typical OFW family is not too impressed with that so called achievement of her administration because they end up getting less in peso terms for every padala they get from their hardworking relatives abroad. Let’s do some back of the envelope computations to illustrate what I mean.
Let us say a typical OFW family gets $300 a month… a year ago when the exchange rate was about P53 to the dollar (based on a table from The Economist), they were getting P15,900. Now that the peso is at P48, they are only getting P14,400 or a difference of P1,500. Ate Glue may scoff at P1,500 as nothing much but that’s still equivalent to about four days work at NCR minimum wage level. Fact is, they have less pesos to cover higher peso cost of living.
And if you happen to be a producer of exportable handicrafts selling about a million dollars worth of goods every year, you got about P53 million a year go but will only get P48 million this year. The difference of P5 million is significant to an entrepreneur of the SME variety who survives from hand to mouth. No wonder all these claims of a good economy get no traction outside of a small group of bankers, stock market traders and people in power.
On my grocery list every week is fresh chicken, a dozen eggs, an occasional can of Spam and the usual onions, tomatoes, various cuts of meat and assorted fish. Fresh chicken used be in the range of P90-P93 a kilo. It is now over P110. A dozen medium eggs used to be about P48.75 and are now over P59. Tilapia used to be at P80 a kilo and about P93 now. A can of Spam used to be about P90-P112 depending on the supermarket. It is now at least P120. Spam is imported and one would expect that with the strong peso, it should be cheaper now.
Let us not even talk of the impact of good macroeconomic indicators trickling down to the masa. That’s too high falutin’ for the typical desperate housewife. Ate Glue and Chief of Staff Joey alias Romy must understand that people cannot eat GDP statistics. Desperate housewives know that despite all the government propaganda on how good the economy is, they are unable to make ends meet. And yes, they don’t care how robust the stock market is because they can’t buy chicken or tilapia there.
Housewives are desperate. They are also confused and frustrated. They cannot reconcile Malacañang’s glowing review of the economy and their daily struggle to keep up with rising prices. And that is definitely not media’s fault.
I got this e-mail from a Pinoy expat in New York.
It’s not surprising that President Arroyo reacted angrily when she was asked why economic benefits were not trickling down to the majority. It may have been an intentional move to deflect attention away from the issue.
Elsewhere, special interest economists, economic journalists and think tanks have resorted to the same strategy. They have labeled those who doubt their outward optimism "populists" and "isolationists", but they have never been able to objectively face dissenting opinion.
The reality is that President Arroyo could not answer the question without admitting that her administration’s economic growth philosophy would result in the majority of Filipinos being less upwardly mobile and less able to afford the necessities that support a decent standard of living. The President does not want to be held accountable for meeting this additional challenge, so she has tried to limit the scope of the issue to focus solely on economic growth.
Voters should press some questions considering that she has been in office for six years. Why, for example, can’t the President revise her administration’s medium term development plan to include target improvements in students’ standardized test scores and the date when this would be accomplished? Why can’t she do the same for quality-life-years statistics?
The answer is simple. It’s too much anxiety and she’ll be stepping on too many toes, especially those of the people within her social circle. The question asked during the press conference may not have been politically motivated, but the solution to the problem may have to be a political one if voters can muster enough collective outrage in time for the coming elections.
Here’s something from Dr. Ernie E.
Guro: Sino si Jose Rizal?
Juan: ‘ Di ko po kilala.
Guro: Ikaw, Pepe, sino si Jose Rizal?
Pepe: Di ko rin po kilala.
Guro: Di niyo kilala si Jose Rizal?!
Pedro: Ma’m, baka po sa kabilang section siya!
Boo Chanco’s e-mail address is email@example.com
Chief News Editor: Sol Jose Vanzi
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