Interesting Figures On Salaries In The Philippines

[Thomas]

Sorry Thomas.  I was poking fun at the words that were used in the report.  They were trying to say that the economy rose tremendously yet there was little to none inflation involved.

 

While the economy has grown, there is an insistence that inflation is not happening in the Philippines.  First off, the law of economics won't allow for this claim.  Second, it is easy to see the effects of inflation with the price increases over the last year.  

ok. You saying 7 percent made me believe you mixed up with GDP, because it is told officialy to be something around 7   :)

 

Is the RP government saying there is no inflation?

Perhaps they try to claim raised salaries depending of inflation, depend of handling from government   :hystery:

 

(I suppose you are corect concerning economy can't raise fast without making some inflation too,

but if handling good, then inflation can raise much slower than the GDP/economy.)

[i am bob]

Sorry Thomas.  I was poking fun at the words that were used in the report.  They were trying to say that the economy rose tremendously yet there was little to none inflation involved.

 

While the economy has grown, there is an insistence that inflation is not happening in the Philippines.  First off, the law of economics won't allow for this claim.  Second, it is easy to see the effects of inflation with the price increases over the last year.  

ok. You saying 7 percent made me believe you mixed up with GDP, because it is told officialy to be something around 7   :)

 

Is the RP government saying there is no inflation?

Perhaps they try to claim raised salaries depending of inflation, depend of handling from government   :hystery:

 

(I suppose you are corect concerning economy can't raise fast without making some inflation too,

but if handling good, then inflation can raise much slower than the GDP/economy.)

 

I checked to see what inflation was for January before I replied - just so I would be sure to be current.

 

Certain parts of the Philippine government is trying to maintain that the inflation rate is negligible   They set a high top end at 3.4% which is not what any developing country wants to really see.  January's figure was 3.3%.  Thus they are able to say that the inflation rate is within the target.  Still that is a jump of .4% in one month.  

 

It's not that this is too high a figure for most countries but for a country where the majority of the population has an income of only a few thousand (pesos / dollars - take your pick), you really do not want an inflation above 2.5% if possible - or the country will end up supporting the general population just so that they can afford to live each month.  3.3% is just too high a rate of inflation.

 

So how do they control the inflation?  Comparing and attempting to control the rate of GDP to Inflation is old school thought and has been found to be the detriment of many countries - as we have seen in the news over the last year or 2  I have my ideas that I know will work -  but then so does everybody else...  In other words, it would end up getting too political for the purposes of this forum.  

[Thomas]

 Still that is a jump of 0.4% in one month.     It's not that this is too high a figure for most countries but for a country where the majority of the population has an income of only a few thousand (pesos / dollars - take your pick), you really do not want an inflation above 2.5% if possible - or the country will end up supporting the general population just so that they can afford to live each month.  3.3% is just too high a rate of inflation.  

So how do they control the inflation?  Comparing and attempting to control the rate of GDP to Inflation is old school thought and has been found to be the detriment of many countries - as we have seen in the news over the last year or 2  I have my ideas that I know will work -  but then so does everybody else...  In other words, it would end up getting too political for the purposes of this forum.  

Why would inflation be any biger problem for the poor, if their income follow or beat the inflation??

The high interests are a much biger problem.

 

Actualy high inflation compared to the interests can be GOOD in some cases.

(Depending of tax rules, actualy it was a very EASY way to earn money in Sweden back when we had HIGHER inflation and interest rates. But the interest rates where low enough compared to the inflation to make a PROFIT. I don't remember numbers, just an example even the numbers making it easier to count  :)    Inflation 10 %. Interest 15 %. Margin tax 2/3 interests deductive from income, making the cost became 5 (=1/3 of 15) while the house price went up 10 %, making a profit of 5 % (=10 - 5). After reduction for inflation it's still around 4.5 % PROFIT left. Having this situation many years, as it was back until around 1985, made much profit totaly for us who used it. This made a big part of the Swedish population millionaires (Krona which is around 1/6 of US dollars now.) Most of them became it without even knowing it   :hystery:   by buying a common house mainly with borrowed money making them pay much less than the house got worth, making them rather RICH after adjusting for inflation too.)

 

I don't know this part about other countries, but when the Swedish government put reducing inflation down (to 2 - 4 %) as a high priority goal, they made it by actions, which made some LESS jobs.

Such would be very BAD for the Philippines, because what they need most are MORE JOBS generating OK income. So RP first priority better be simplify having business. 16 steps to start a business, and ALL businesses needing renewed permits EVERY year, are very bad...  :(

[i am bob]

 Still that is a jump of 0.4% in one month.     It's not that this is too high a figure for most countries but for a country where the majority of the population has an income of only a few thousand (pesos / dollars - take your pick), you really do not want an inflation above 2.5% if possible - or the country will end up supporting the general population just so that they can afford to live each month.  3.3% is just too high a rate of inflation.  

So how do they control the inflation?  Comparing and attempting to control the rate of GDP to Inflation is old school thought and has been found to be the detriment of many countries - as we have seen in the news over the last year or 2  I have my ideas that I know will work -  but then so does everybody else...  In other words, it would end up getting too political for the purposes of this forum.  

Why would inflation be any biger problem for the poor, if their income follow or beat the inflation??

The high interests are a much biger problem.

 

Actualy high inflation compared to the interests can be GOOD in some cases.

(Depending of tax rules, actualy it was a very EASY way to earn money in Sweden back when we had HIGHER inflation and interest rates. But the interest rates where low enough compared to the inflation to make a PROFIT. I don't remember numbers, just an example even the numbers making it easier to count   :)    Inflation 10 %. Interest 15 %. Margin tax 2/3 interests deductive from income, making the cost became 5 (=1/3 of 15) while the house price went up 10 %, making a profit of 5 % (=10 - 5). After reduction for inflation it's still around 4.5 % PROFIT left. Having this situation many years, as it was back until around 1985, made much profit totaly for us who used it. This made a big part of the Swedish population millionaires (Krona which is around 1/6 of US dollars now.) Most of them became it without even knowing it   :hystery:   by buying a common house mainly with borrowed money making them pay much less than the house got worth, making them rather RICH after adjusting for inflation too.)

 

I don't know this part about other countries, but when the Swedish government put reducing inflation down (to 2 - 4 %) as a high priority goal, they made it by actions, which made some LESS jobs.

Such would be very BAD for the Philippines, because what they need most are MORE JOBS generating OK income. So RP first priority better be simplify having business. 16 steps to start a business, and ALL businesses needing renewed permits EVERY year, are very bad...   :(

Inflation means the costs and thus the prices go up.  The salary of the poor never goes up enough to cover the difference - if it goes up at all.

 

Inflation means the cost of your exports goes up - now nobody wants to buy as much of them.  And that isn't good when you are a developing country.

 

Traditional management of inflation is to raise Interest Rates.  This reduces borrowing and hopefully inflation rates follow.  There is a balance point where lowering interest rates will reduce inflation but that is dependent on what your immediate trade partners are doing and if your country can build industry better than they can.  This is also a short term solution in most cases.

 

The number of steps required to start a business has nothing to do with if business start but rather how the government is set up to register and record the business.  Each and every country will tell you that if you don't want to do the steps required of you, then you won't be starting a business there.  Simplifying the number of steps required can only be accomplished by changing the way the government is set up - and I don't think they are going to do it because somebody said it was too hard to start a business.

 

We are getting way beyond the scope of the forum in this discussion so I am just going to end my side of it here.  

[Thomas]

Inflation means the costs and thus the prices go up.  The salary of the poor never goes up enough to cover the difference - if it goes up at all.

Well. Normaly true, but it don't have to be that way.. 

(E g Sweden have a strong labour union. Now and then they have managed to raise salary more than the inflation.)

 

Inflation means the cost of your exports goes up - now nobody wants to buy as much of them.  And that isn't good when you are a developing country.

But inflation is a lowering factor for the currency value too, so it DON'T need to mean less export. Most (pre-agreed) export deals are done in US dollars anyway, so the important is how much the US dollar is worth compared to your own currency.

It has been a commonly used "solution" to volontaringly value DOWN the own currency, when the own country want to export more, perhaps some less common since Euro started. 

Traditional management of inflation is to raise Interest Rates.  This reduces borrowing and hopefully inflation rates follow.  There is a balance point where lowering interest rates will reduce inflation but that is dependent on what your immediate trade partners are doing and if your country can build industry better than they can.

But raising interests REDUCE business investments normaly.

The number of steps required to start a business has nothing to do with if business start but rather how the government is set up to register and record the business.

What?! Of course less want to try to start own business, if it's to hard work to get it started. 

And the rule about demanding renewing permits every year, in a corrupt country, add a big business risk, because of the risk a competitor can kill your business by bribe to NOT give you the extended business ...   :(

 

(Compare: In Sweden it's easy to start business,

NEVER any demand of renewing of permit for almost all businesses (there are a few exceptions)

BUT very much rules concerning employing the FIRST, which make many prefering staying without employees, although they could have got enough work for more. (It's a very small difference in administration work between having 1 or 100 employed, I know, I have had both 0, few and over 100.) So it's very much more admin work per employed if having 1. (=Other part of rules is a big obstacle for exbanding small businesses.)

 

---

To make it some back to topic  :)

it's some similarity concerning employing people in the Philippines.

I have just checked the Phili employment rules some, but I know some employers use the rules in a bad way for the employed. It seem many employers have put in system to give employed only short contracts and then get new employed UNDEPENDING of if they are good or bad, because in shorter employments the employer don't need to pay some of the fees!!! so some don't let the good workers stay because of that   :(

Edited February 6, 2013 by Thomas

[kaku]

Sadly the least reliable entity for measuring inflation is a government agency.  They have a vested interest in under reporting the real rate.  Most unaffiliated economists estimate Philippine inflation at closer to 5%+.  What this means is every 16 years or so prices on most things (not all) double.  People living on a fixed budget will be hurt the most.  This is something to consider if your prime reason for moving to the Philiipines is cost savings.  Bear in mind there are no safety nets in the Philippines (food stamps , welfare, food banks, etc.).

 

Some government economists utilize a scheme called "substitution" to keep inflation numbers lower.  What this means is, if a manufacturer (like China) makes a product comparable to another one at a lower price it is used to calculate the inflation rate.  The fact that this new product may be substantially inferior to the one it is replacing is irrelevant.

Edited February 6, 2013 by kaku

[BrettGC]

Sadly the least reliable entity for measuring inflation is a government agency.  They have a vested interest in under reporting the real rate.  Most unaffiliated economists estimate Philippine inflation at closer to 5%+.  What this means is every 16 years or so prices on most things (not all) double.  People living on a fixed budget will be hurt the most.  This is something to consider if your prime reason for moving to the Philiipines is cost savings.  Bear in mind there are no safety nets in the Philippines (food stamps , welfare, food banks, etc.).

 

Some government economists utilize a scheme called "substitution" to keep inflation numbers lower.  What this means is, if a manufacturer (like China) makes a product comparable to another one at a lower price it is used to calculate the inflation rate.  The fact that this new product may be substantially inferior to the one it is replacing is irrelevant.

 

Thankfully my navy pension is tied to the CPI here in Australia and is reviewed twice a year - hasn't failed to go up by the CPI in over 5 years.  Whilst the inflation rate here is artificially lowered do the emphasis and weighting (over) of home loan interest rates in the way it's calculated here it's still better than a kick in the teeth.

[twostrokes]

In comparing life in the 60's, 70's 80's there are also a lot of factors that come into play. There were few things to spend money on in the 60's. TV was new..and in very few areas so you didn't have to buy one. This also eliminated 90% of advertising which ment that what you didn't know existed, you didn't miss or want. Most of the country did not have electricity so, no appliances to buy few knew what aircond was and no one missed it. There was a much higher percentage of people that would be considered middle class.

 

In the 70's areas that had power started being pressured to buy TV's and appliances with little increase in salaries, so all of a sudden they felt poor if they could not afford to buy...The more they realized was available through TV advertisements the more they missed and wanted. Watching TV mostly featured US shows (say rich) or wealthy filipino soap operas. Again, made people unhappy because they could not afford all the nice things. Women discovered bras, fancy clothes and expensive makeup...all cost a lot. Result feel poor.

 

The 80's was worse, The entire country now pretty much had power...They also expected telephones, VCR's for their TV's daily movie rentals, and private jeeps. The more they felt everyone should have, the more poor they discovered they were, or felt. The bottom line is that people were much much happier back in the 60's because a few clothes, a roof over their head and food on the table were all that was required to feel well off. The super rich had cars and appliances because they lived in big cities.

 

The 90's just added more of the same, except now you had shopping malls, imports everywhere, cell phones, the internet all things that take away from basic necessities like food and housing. I wonder how life would be if you took away phones, cars, TV, internet, cable, beauty salons and makeup, high heels and fancy clothes, how much problem would it be to get by. Of course it couldn't be done because once people have had a taste of things they can't give it up and still be happy.

 

I don't know what it is like now as I have not been back in 20 years. But, my guess is the desire to want more is driving the unhappiness of feeling/being poor.

[Mike S]

Women discovered bras,

I wonder how life would be if you took away

 

Ah ha ......  a man after my own heart ...... Now that is something we could do without ....... I think we should start a burn your bra rally ..... Kuya Jake volunteers to help with the removing of said clothing and starting the bonfire ....  :thumbsup:  :mocking: 

 

But seriously I believe you have pointed out some very truthful reasons for why people here feel the way they do ...... couple that with an institution (sorry NOT the government) that wants to keep them dummied up and broke by various ways  (again NOT the government) and you can see why this is happening today ...... and I'm afraid until people quit letting them pull the wool over their eyes it will continue to happen ..... JMHO ..... :thumbsup: :cheersty:

[dalidali]

When I was in Mindoro earlier this year, I helped out a GF by doing a remodel of her bathroom.

Installed a electric hot water heater and tiled the floor and walls with new fixtures.

 

The man who did this work was a jack of all trades kinda guy and did electric, carpentry and tile work.

 

I fell off the chair when he said his daily labor rate was 350p...a DAY!!

That amounted to less than $9 bucks USD a DAY!!