Poorest households hardest hit by inflation, say economists

The country’s poorest families continued to suffer the most in terms of inflation compared with the rest of the population.

According to the National Statistics Office, the bottom 30 percent of Filipino families had to contend with a faster rate of rise in prices at 3.5 percent in the third quarter from that of a year ago.

The national inflation average for the same period stood at only 2.4 percent.

The inflation figure also marked an acceleration from the 3.1 percent reported in the second quarter. In the first three quarters of the year, inflation averaged at 3.4 percent.

Inflation for the poorest households was faster because of the rise in food prices, which account for bulk of their expenditures.

Government economists said that the consumer basket of the poorest households was quite different from that of the rest of the population.

For the poor, food accounts for the bulk of their expenses, the economists said.

When food prices rise, the purchasing power of the poor is more adversely affected than that of the middle class and the rich.

Data showed that annual inflation for the commodity group of food, beverage and tobacco (FBT) accelerated to 4.1 percent in the third quarter from 3.5 percent in the second quarter.

For food alone, the rate of rise accelerated to 3.1 percent from 2.5 percent.

The increase in food prices was attributed partly to weather-related problems that affected supply.

But officials said that the inflation figure for the poorest households was still manageable and was well within the government’s target range of 3 to 5 percent.

Economists said that, to better protect the purchasing power of the poor, there should be higher investments in agriculture.

Although the Philippines became the fastest growing Asian economy, having expanded by 7.6 percent in the first semester from a year ago, the country continues to suffer from one of the highest poverty rates in the region. In the first semester of 2012, the poverty rate stood at 27.9 percent of the population.