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AN
economist is already worried poverty in the Philippines
will worsen with the rising prices of food and other
essential commodities because budgets of the poor are
skewed toward food, particularly rice and corn, whose
prices have doubled in the world market. The
Philippines
is a net importer of rice and the biggest buyer in the
world.
In a
briefing at the University of Asia and the Pacific (UA&P),
economist Cid Terosa said a university simulation
underlined the abysmal income distribution in the
Philippines—so that while everyone is affected by high
prices, the lower 30 percent are in a very dreadful
position, and eating just once a day may become the
norm.
“Soaring
food prices is everyone’s problem, but it is a greater
problem of the poor. It is important to raise the income
of the poor and improve the distribution of income to
help the poor cope better with rising food prices,” said
Terosa in a lecture Tuesday.
A
10-percent increase in cereal (rice and corn) and other
food prices translates to a 5.9-percent reduction in the
budgets of the poorest 30 percent, almost double (3.9
percent) in the budget reduction of the country’s upper
70 percent, according to him.
The same
increase, Terosa said, will also result in a
14.4-percent reduction in the expenditure of the bottom
30 for other items.
Again,
the UAP simulation showed that this is higher compared
to the 6.5 percent or more than double reduction in
expenditures for nonfood items of the upper 70 percent.
He said
that a 10-percent increase in rice and corn prices alone
will result in a 2.8-percent reduction in the budget of
the poorest 30 percent; and a 10-percent increase in
food, cereal, fuel, light, and water prices will result
in a 7-percent reduction in their budget.
The
upper 70 percent will only have to bear a 1.4-percent
and 5.6-percent budget for a similar price increase.
According to the study, the poorest 30 percent spends
around 31.1 percent or a third of its budget on food and
28 percent or a fourth of that on cereals such as rice.
The
upper 70 percent only spends 25.3 percent or a quarter
of their budget on food and less than a sixth on
cereals.
The UAP
simulation showed similar imbalances in other spending
for both sectors, with the well-off always ending with
the better situation. |
