I was inspired by this tweet and it adds another dimension to how I view the monthly inflation data report in the Philippines.
https://twitter.com/MyLordBebo/status/1799525065169551751
- MyLordBebo
We're trending upwards on the inflation count:
I'm going to highlight how things started on 2020, that's when the pandemic came to be.
Stimulus packages are one way of labeling money printing. The cash the government prints introduces more money into circulation to prevent the collapse of the economy from struggling business and providing more relief efforts to address covid-19 concerns. If one was paying attention to their class in basic economics, more money printed contributes to inflation.
Well duh, this is so obvious except it isn't. When I made this post, I am expecting folks from my country would be readers and part of me wants to believe that our financial literacy levels are good enough to comprehend how macroeconomics work. But nope, whenever some economic news makes headlines in this country and I happen to pass by on twitter or Facebook, I see random folks making stupid commentaries about the economy. I'm no economist but the news being presented is simple enough to comprehend and it's baffles me how some would miss the plot.
This has less to do with which political party you're supporting and more along the lines of dealing with the after effects of the stimulus packages. In 2020, the Duterte administration released stimulus packages and this influx of new money into circulation would have effects visible months to years.
What we're seeing now is a piece of the aftermath from that decision. In hindsight and just my own opinion, I would'nt really call it a bad move as the decision was brought by unforeseen circumstances and government being backed in a corner. No administration was prepared to deal with a pandemic and everything was new. If those stimulus packages weren't handed out, things could've been much worse than it is now.
Now dealing with inflation isn't a straightforward answer to a problem that is caused by multifactorial reasons. But the Philippines has one of the best central bankers so that's something to be confident about when it comes to our monetary policies. What I'm not confident about is how the average person sees things instead of the broader view.
What they'll only notice is how inflation is affecting their daily living, yet what they are unlikely appreciate is the cause and effect it has over their future. I look at the graphs and tables and couldn't help but be pessimistic about the future.
Going back to the tweet that inspired me to write this piece, what the report above shows what is currently being measured on recent data but what actually happens is the cost of living has been compounding against us at a rapid rate relative to what we were used to.
Source:
Philippines: Philippine economic stimulus law now in effect
House approves P1.3-trillion economic stimulus package vs pandemic
Philippines' Duterte signs $3.4 billion pandemic stimulus package into law
Thanks for your time.
