Time to Tighten the Purse Strings? (Lysch Gotao)

I am sure that those reading this entry at this moment have purchased at least one kind of product in their entire lives, whether it be coffee, shampoo or rolls of toilet paper. As consumers, we are all quite sensitive to the price changes of certain goods. In my experience, after undergoing the Junior Term Abroad program and living in a foreign country for almost half a year, I have become more mindful of the products I consume, specifically their prices, in order to minimize costs. It was definitely different from the life I was used to. Furthermore, living on a budget forced me to become more economical about the purchases I made.

You might be wondering…what point is this girl trying to make? Well, if you are up to date on current events (or at least read the newspapers' headlines once in awhile), you would have noticed that oil prices have increased significantly the past months. As oil prices soar, prices of consumer goods also follow suit. Moreover, the recent decline in the United States’ crude oil inventories has hit the European and Asian stock markets as well. If the supply of oil decreases, its price goes up which would mean higher input costs for firms that produce consumer goods. These higher input costs translate to a surge in the prices of their products, which in the end, directly affects us consumers and our budgets. Inflation has always been a pain in the neck. No more McDonald’s french fries for me then. Furthermore, the country is experiencing a shortage in the supply of rice and it now has to deal with the price increase of consumer goods, which of course includes rice. I am no economist, but it looks like this is going to pose a real problem for us Filipinos.

The more obvious effect caused by the oil price increase is (or will be) the rise in transportation costs. I just recently added gasoline to my car a few days ago and a full tank cost me 2,000 PHP. The last time I did that, which I admit was quite some time ago, it cost me around 1,400-1,600 PHP! The 400-600 peso increase would have bought me at least 15 large sized packs of french fries from McDonalds! Additionally, if you are planning a trip abroad, it might be a good idea to start booking your tickets as early as now to avoid dealing with the increase in fares.

Actually, in times of soaring prices, we really do not have the luxury of spending our money on unnecessary items since the purchasing power of our money is weakened. We then try to adjust our consumption of goods, depending on the quantity that we need/want and its price, as well as our budgets. Bottom line here is that as prices of oil, consumer products, and more or less everything else escalate, the consumers are left to deal with their lower purchasing power and increased cost of living. And for the Philippines, it looks like we may be in for a wild ride in the coming future.