“The use of the P10,000 figure was used only to illustrate what a 4.6 percent inflation rate means in terms of pesos to a family of five.” This was explained by NEDA Undersecretary Rosemarie Edillon to clarify statements she made during Tuesday’s press conference on the May 2018 inflation rate.
USEC Edillon added that a 4.6 percent inflation rate is also an average of the price increases of the different commodity items. To determine which of the price increases really affected the average Filipino family, the importance of each commodity item to the consumer basket was determined. The amount of P10k was therefore broken down using the weights in the Consumer Price Index (CPI), or the change in the average prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
Thus, for a budget spending of P10,000, the total effect of a 4.6 percent inflation rate in May would be an increase in spending of P459 on different consumer goods. NO judgment was made on whether or not the P10k amount was enough for the family.
On Thursday, June 7, Socioeconomic Planning Secretary and NEDA Director General Ernesto Pernia clarified that “roughly P42,000 a month would be a more decent income, at least to live above the poverty line.” He, however, underscored that he is not endorsing a minimum wage of P42,000 since a legislated minimum wage that is not well-studied could only result in even higher inflation (wage-price spiral) lay-offs and business closures. xxx