The truth behind the 6.4% inflation: “What can I do to help this economy’s topline growth?" - The Daily Sentry


The truth behind the 6.4% inflation: “What can I do to help this economy’s topline growth?"




A picture of a poor family in the Philippines.Image credit to The Philippine Star


A post of Jay Olos went viral on Facebook, according to the post, while he was saddened by the fact that our country’s inflation has already reached its nine-year high of 6.4% as of August 2018, it was also state there that he is frightened and deeply saddened by the way that there is still an excessive number of Filipinos who are still financially illiterate, reactive and pessimistic. He stated his insights about these things and how he thinks people should react about it.


He first explained the meaning of inflation; he said that in layman’s term it refers to the increase in the prices of goods in an economy. According to him the Demand-Pull inflation and the Cost- push inflation are the two reasons of inflation. 
A typical grocery store in the Philippines were basic commodities can be bought. Image credit to Google photos
He then explained the two causes of inflation; first, the Demand-pull inflation which is the general demand for goods and services in an economy is greater than production or productive capacity of the economy. It is stated there the normally this is caused by increase in money in circulation as a central bank’s measure. There is a great deal of money in circulation thereby increasing population purchasing power however lesser goods or services to buy; the increase in price. While, cost-push inflation happens when there is a general increase in prices in production subsequently pushing the general selling prices of products and services and usually, this occurs when there is an oil price hike as most enterprises uses oil for production, increase in wages, in prices of imported goods needed for production and consumption, for example is the Philippines importing rice nowadays.

The points are because of the awful union of cost-push factors and the elevated oil prices. Normally, all the different prices will go up and so unquestionably this is not something that ought to be ascribed to any local within an economy alone. Figured it with the delicate increment in money supply by the BSP amid the first 50% of the present year adding the price increase impacts of the TRAIN law, at the point expansion it will increase. The inflation of 6.4% is a mix of demand-pull and cost-push. This is stated by the BSP governor himself.


Prices in wet market up due to inflation?. Image credit to Google photos
In school we have been taught that inflation or increase in prices would mean lower savings for each household or every Filipino. Obviously, that is not true because if you look deeper, inflation is really a good indicator that the economy is working and actually heading upwards. As a whole begrudge those first world countries as having the best economies on earth and having the best quality lives. In any case, we do not actually understand the fact that the prices in those countries are way higher than the Philippines.

The purposes behind the 6.4% expansion are because of more positive factors like the passage of the TRAIN law, which most economist and business specialists see as having an extremely positive effect in the Philippine economy over the long haul, and the BSP's turn to invigorate spending, are great markers that the economy is going to rise. Inflation or higher costs may likewise be a marker of higher econimic action and more brilliant economic prospect.

The oil price increase from sources abroad ought not to be viewed as a reduction of wage to each local household. Filipinos should use it to understand that these factors outside our ability to control should be managed by the managing ourselves. According to the post, “We must stop wasting our time doing non-sense things. We must be valuing more our time and resources and start our journey towards a more empowered nation through savings, investments, and entrepreneurship.”

“We cannot be a progressive nation without an uptick in our economic activities. Sure, we should always manage our costs and expenses but at the end of the day, growth is generally driven by the topline growth, So instead of whining about the inflation, you should ask yourself, “what can I do to help this economy’s topline growth? How can I surf on the waves of its growth and benefit from it as well?” he added.



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