How can we combat inflation?

[froshie1]

As an ordinary citizen how can we combat inflation?

Can we tame it by regularly saving money in the bank? Building businesses?

[venn123]

siguro we can start posting names of supermarket/stores which sells the lowest in term of price. for example where to get the cheapest rice, bangus etc ... (this needs to be updated everyday).

Ang purpose is for people to see where they can buy the cheapest. The premise is if the store/supermarket is near your place patronize yun the sells the products at a good price.

Soon hopefully, the others will follow also since more customers. mabilis ang turnover maganda sa business.

[Hulk]

We could always stop spending, and if we sustain it long enough, it could lead to... recession! :lol:


:frank:

[woofers]

The government can stop printing money or freeze prices and wages.

[spindoctor]

Originally posted by venn123
siguro we can start posting names of supermarket/stores which sells the lowest in term of price. for example where to get the cheapest rice, bangus etc ... (this needs to be updated everyday).

Ang purpose is for people to see where they can buy the cheapest. The premise is if the store/supermarket is near your place patronize yun the sells the products at a good price.

Soon hopefully, the others will follow also since more customers. mabilis ang turnover maganda sa business.
The law of supply and demand dictates that as demand grows, so will the price of goods. Thus, you're back where you started.

[froshie1]

How about regularly saving money in the bank? If we do it as a nation will it help?

[KuyaDanny]

To the extent that you save money you would otherwise spend, of course it will help. It's not a cure-all, though, and might give rise to other problems, such as what Hulk has said.

[ichi]

The problem you can also look at is the unequal distribution of wealth....

[SILENTMAX]

mining!!!!!

the philiphines is so rich in gold all we need is to mine all our gold

gold i tell ya gold!!!

muahhahahhahahahhahaha




on a serious note. you cant beat inflation. and puting money in a bank at what 4 percent interest? inflation is now at 6-7 percent per year depending on whom you ask.

if you put your 7 hamburgers in a bank and wait a couple of years chances are you end up with only 4 due to inflation. omg im turning into a bear waaaaaa



convert your peso to euro or yuan screw the dollar

(disclaimer dont listen to me im insane)

[froshie1]

Sige ibahin natin, combat not in the sense na mabubura na inflation. But do you think if we save money/invest/create business as a whole nation eh mararamdaman natin ito ng sobra sobra?

[tennisace]

question:

what are the exact inflation numbers anyway?

if we're looking to develop a financial strategy designed to "combat" or outpace inflation and at the very least preserve principal, we have to know what inflation figures we're up against in order to plan accordingly.

[froshie1]

Originally posted by tennisace
question:

what are the exact inflation numbers anyway?

if we're looking to develop a financial strategy designed to "combat" or outpace inflation and at the very least preserve principal, we have to know what inflation figures we're up against in order to plan accordingly.

hindi ko alam exact inflation numbers. question ko ay general and kung meron man makakapagbigay ng mga matataas na paliwanag na maiintindihan ng isang non-financial person like me eh magbigay lang kayo :-) hehehe

[so_obVIOS]

Originally posted by venn123
siguro we can start posting names of supermarket/stores which sells the lowest in term of price. for example where to get the cheapest rice, bangus etc ... (this needs to be updated everyday).

Ang purpose is for people to see where they can buy the cheapest. The premise is if the store/supermarket is near your place patronize yun the sells the products at a good price.

Soon hopefully, the others will follow also since more customers. mabilis ang turnover maganda sa business.
In real life what would happen here is that the "cheap supermarket" will raise it's prices too. Demand drives prices up.

[so_obVIOS]

Inflation is always there. As the economy expands, people get more money, and want to buy more things. Since people want to buy more things, sellers would raise their prices to get more profit. Then there would come a time when products become too expensive so people ask for more money. Wages are then raised to give people more money so people want to buy more stuff again...and then we go through the same thing over and over.

Sucks right? But that's life. It's human nature to be greedy. People want to buy more and more, sellers want to profit more and more.

Ever notice why in rich countries the cost of living is incredibly high? It's because their fast moving economy has gone through this cycle a multitude of times. This type of inflation is controlled. Though many common tao and war-freak activists (the KMU, Bayan, etc types) would disagree, this is not bad in a strictly economic sense.

What hurts is if inflation goes out of control. Inflation can go out of control due to calamities (can bring shortage of food so prices jump high up), a war somewhere (can bring shortage of oil so prices jump high up too), epidemics (can bring shortage of anything you can think of...) and others more.

[tennisace]

Originally posted by froshie1
hindi ko alam exact inflation numbers. question ko ay general and kung meron man makakapagbigay ng mga matataas na paliwanag na maiintindihan ng isang non-financial person like me eh magbigay lang kayo :-) hehehe

The core inflation rate for 2004 averaged 5.5%.

Inflation in it of itself is neither good nor bad. Inflation is an indication of a growing economy; on the other hand, no inflation can be a sign of a weakening economy. When inflation is anticipated, certain economic measures are put into place to compensate. This is similar to the "cycle" that the previous forumer described above. I would disagree, however, on the premise that this "cycle" is perpetrated by greed. Unanticipated inflation such as those caused by unforeseen circumstances (tsunami) or consumer uncertainty is obviously detrimental. Generally-speaking, supply and demand and the costs of producing goods or services weigh heavily on the inflation rate.

Inflation obviously affects different people in different ways. Unfortunately, those of meager and/or fixed income bear the brunt of rising costs. But, this is true of any economy. I suppose the easiest way to stretch one's finances is to practice fiscal restraint and discipline. Ultimately, however, it is the "one-day millionaire" and "bahala na" attitudes that gets the best of our financial judgments.

"We" cannot combat inflation. It is an integral part of an economy. We can, however, attempt to mitigate and even outpace it with prudent financial planning. Of course, it is a problem when there are no finances to plan with. But that's another story.

In the end, it is your elected officials responsibility and obligation to practice fiscal responsibility in government in order to mitigate the ill-effects of inflation. Corruption, the inability of certain government officials to keep their filthy fingers away from public funds, and the inability of the public at large to disengage from corrupt practices certainly does not help in this regard.

[so_obVIOS]

^ Well said tennisace *okay*. It seems you know this by heart :handsdown: Okay, maybe "greed" was too harsh a word. It's more like an "insatiable want" :shy:.

Are you a Masters Degree holder, or even a Ph.D. in Economics? :)

[tennisace]

Hahahaha! I like that - insatiable want. Speaking of which, it seems to me that the temptation of putting "wants" over "needs" is a common thread that runs thru all of us regardless of economic background. And this all points to the pandemic that afflicts even the best of us: a disease known as STATUS.

What is status, anyway? My definition of it is (and I've mentioned it quite often in these forums):

Buying things you don't need with money you don't have to impress people you don't like.

I'm flattered by your kind remarks, but I don't hold a Masters Degree or a Ph.D. I'm am just an entrepreneur like so many good folks in this thread.

Practice fiscal discipline and restraint. At the very least, you can have some measure of control over your "personal inflation". If everyone did this, perhaps inflation wouldn't be as bad. But then again, that would be wishful thinking.

This year, don't look for the inflation rate to go below 5.5%. The best case scenario is that it would remain at the 5.5% average, but experts believe that it would certainly rise by a couple of ticks at least.

In that case, better start stretching your cash.

[froshie1]

Nice idea Tennisace!

Baket kaya ang gobyerno hindi i-promote sa mga minds ng mga Noypi ang mag impok? May nabasa ako tungkol sa Korea (Fwd email) kung paano sila hanggang ngayon eh maayos ang buhay. Baket kaya hindi gawin ng gov't natin na maghikayat na makapag impok tayo? Siguro meron ng efforts pero hindi naman consistent.

[so_obVIOS]

Originally posted by tennisace
I'm flattered by your kind remarks, but I don't hold a Masters Degree or a Ph.D. I'm am just an entrepreneur like so many good folks in this thread.
You still have my admiration. I'm economics graduate, but what I know I only learned from the few instances I was attentive in class :glee:. You're an entrepreneur, and you guys learn this from your everyday life :handsdown:

[Hulk]

Actually the available figures for inflation are inflation and core inflation. For you newbies, inflation is computed based on the price increase of a given basket of goods over time. The basket includes items such as food, fuel, clothing, etc. Now if you think about it, the inflation figure that they are presenting may not be applicable to everyone. Why? Simply because we have different consumption patterns.

I've heard in one investment luncheon that there is such a thing as "Cost of Living Well!" How does it differ from your normal inflation figure? Well the items in the basket contains such items/services as the cost of a helicopter ride, the cost of a horse, and the cost of a college education in an Ivy League university, which obviously the rich could only afford. They presented that this inflation index far outpaced the normal inflation figures.

How does this apply to us? Well yung items that the basket represents as measured by inflation may not necessarily represent our own consumption patterns. For example, I like expensive rice, I like signature clothes and I spend more on gasoline than the average person. Therefore, the inflation that applies to me is far different than the one presented by government.

Hehe! I don't even think the inflation basket has been adjusted for the increase in communication spending of the Filipino.


:frank:

[Jonga]

someone told me that the best way to fight inflation is to KILL people....

she said that inflation grows when more people are using money....

[tennisace]

Originally posted by so_obVIOS
You still have my admiration. I'm economics graduate, but what I know I only learned from the few instances I was attentive in class :glee:. You're an entrepreneur, and you guys learn this from your everyday life :handsdown:


Hahaha! At least you were attentive even for a few instances. I never was. Most of my college profs were entrepreneurs, actually. Back then, it cost me 50 bucks for a midterm and 100 bucks for finals. I didn't quite get the laws of Thermodynamics, but I sure did learn a lot about being an entrepreneur! Waaaaahahaha!

But I appreciate the props. Why not be an entrepreneur yourself?

[tennisace]

Originally posted by Jonga
someone told me that the best way to fight inflation is to KILL people....

she said that inflation grows when more people are using money....


Kill people? That's asinine. Human resources are more valuable than money. Intead of killing people, why not just get rid of money?:D

[Japorms09]

Originally posted by froshie1
Nice idea Tennisace!

Baket kaya ang gobyerno hindi i-promote sa mga minds ng mga Noypi ang mag impok? May nabasa ako tungkol sa Korea (Fwd email) kung paano sila hanggang ngayon eh maayos ang buhay. Baket kaya hindi gawin ng gov't natin na maghikayat na makapag impok tayo? Siguro meron ng efforts pero hindi naman consistent.

You can't tell someone who does'nt have money to save.

The minimum wage is not even enough. They really don't have anything to save. Combating inflation is the job of the Central Bank. If you ask me the real inflation is more than the 7% they are talking about. Inflation is not the real problem here, inflation is the result of improper economic policy and business policy of arroyo. Her lack of political will and vision drags the economy down. They are saying that there are more investors registered at BOI, this is a hoax, that's registration. Its a different issue whethere they really invested their money. In fact, our total FDI have decline to only hundred millions from billions from the previous years.

The Philippine economy is getting worst every year, the only thing thats saving it is the spending of our consumers and some export.

If our government continues to little or nothing at all. I fear that we have no future.

[snop]

Originally posted by tennisace
Hahahaha! I like that - insatiable want. Speaking of which, it seems to me that the temptation of putting "wants" over "needs" is a common thread that runs thru all of us regardless of economic background. And this all points to the pandemic that afflicts even the best of us: a disease known as STATUS.

What is status, anyway? My definition of it is (and I've mentioned it quite often in these forums):

Buying things you don't need with money you don't have to impress people you don't like.

I'm flattered by your kind remarks, but I don't hold a Masters Degree or a Ph.D. I'm am just an entrepreneur like so many good folks in this thread.

Practice fiscal discipline and restraint. At the very least, you can have some measure of control over your "personal inflation". If everyone did this, perhaps inflation wouldn't be as bad. But then again, that would be wishful thinking.

This year, don't look for the inflation rate to go below 5.5%. The best case scenario is that it would remain at the 5.5% average, but experts believe that it would certainly rise by a couple of ticks at least.

In that case, better start stretching your cash.

Well written, tennisace - as usual! Let me re-iterate: Discipline on "Living Within Our Means" is one sure way to stretch our pesos.

Originally posted by Hulk
Actually the available figures for inflation are inflation and core inflation. For you newbies, inflation is computed based on the price increase of a given basket of goods over time. The basket includes items such as food, fuel, clothing, etc. Now if you think about it, the inflation figure that they are presenting may not be applicable to everyone. Why? Simply because we have different consumption patterns.

I agree!

I've heard in one investment luncheon that there is such a thing as "Cost of Living Well!" How does it differ from your normal inflation figure? Well the items in the basket contains such items/services as the cost of a helicopter ride, the cost of a horse, and the cost of a college education in an Ivy League university, which obviously the rich could only afford. They presented that this inflation index far outpaced the normal inflation figures.

Or the cost of a BMW?

How does this apply to us? Well yung items that the basket represents as measured by inflation may not necessarily represent our own consumption patterns. For example, I like expensive rice, I like signature clothes and I spend more on gasoline than the average person. Therefore, the inflation that applies to me is far different than the one presented by government.

Hehe! I don't even think the inflation basket has been adjusted for the increase in communication spending of the Filipino.

Hmmm?

hulk, In my basket, tilapia is still between 65-70 pesos per kilo since 2000. But I get your point!

Excellent analogies, guys!

:*)

[snop]

Originally posted by Japorms09
You can't tell someone who does'nt have money to save.

The minimum wage is not even enough. They really don't have anything to save. Combating inflation is the job of the Central Bank. If you ask me the real inflation is more than the 7% they are talking about. Inflation is not the real problem here, inflation is the result of improper economic policy and business policy of arroyo. Her lack of political will and vision drags the economy down. They are saying that there are more investors registered at BOI, this is a hoax, that's registration. Its a different issue whethere they really invested their money. In fact, our total FDI have decline to only hundred millions from billions from the previous years.

The Philippine economy is getting worst every year, the only thing thats saving it is the spending of our consumers and some export.

If our government continues to little or nothing at all. I fear that we have no future.

Sad but true, isn't it? There are countless millions of our own brethrens who are so poor that they can't even afford to be frugal!

:(

[so_obVIOS]

OMG! When was the last time I heard "basket of goods"? 4 years ago? :lol: Nice to know there's no monopoly of knowledge here.

Hulk: Yeah, I agree. But economics has never been an exact science anyway. Heck, I'd even dare call it inaccurate. But at least the inflation rate shows how prices are rising in general. And our current condition? There's no denying it's hurting everyone, even Jollibee has raised the price of their budget meals. :glee:

Jongga: Then you'll have an economy that's literally contracting. :lol:

tennisace: Why didn't I become an entrepreneur? Maybe in the future I will be. Why not now? Far too many reasons :)

Japorms09: Yeah, you can't save what you don't have. Technically though, savings is an economic leak. Burying money on the ground wouldn't help this country, and inflation will spank you in the future. So if you have the money, then invest. Money needs to move around to get the economy going.

snop: Maybe tilapia still costs the same, but you would now have to pay more to get to the palengke :D And if it's possible, we should live below our means, and invest the extra money.

Keep this thread alive, it's nice to be in the company of such knowledgeable people *okay*

[Hulk]

Actually, a partial answer to inflation is technology improvements in the supply side. If one was to compare the cost of a computer now and 20 years ago, there's really no difference in the price, but the power of our computers have geometrically improved.

However, technology usually falls short when it comes to non-renewable resources and services.


:frank:

[ajoeroooo]

food security & 'buy philippines' could be the best answer!!! yung mga farmers dapat hwag iabandon *** farmlands nila, then we as a consumer should buy more local produce kahit mas mura imported....otherwise, mahirap na talaga magcombat

[so_obVIOS]

Originally posted by ajoeroooo
food security & 'buy philippines' could be the best answer!!! yung mga farmers dapat hwag iabandon *** farmlands nila, then we as a consumer should buy more local produce kahit mas mura imported....otherwise, mahirap na talaga magcombat
I can't seem to connect lowering inflation with letting the farmers stay on the field. It has it's own merits though.

1) Since their primary skill is really farming, they should be more productive in the field rather than in doing menial jobs in cities (given the right support like access to credit, irrigation, etc.). In turn this helps overall productivity.

2) Letting them stay on the field would help relieve our stinking congested cities.

Buying local produce even if expensive? It generates employment, promotes local industry and helps our productivity too. Buying expensive things though isn't exactly fighting inflation :glee: Well, well.....there's a trade-off for everything.

But then again economics was never an exact science so this is all open for bashing :lol:

[Hulk]

^ I agree that "buy" Philippines has nothing to do with reducing inflation. If ever the Philippine govt. adopts such a stance, it would further increase inflation because we cannot compete with the cost structure of foreign imports.

Buying local produce even if expensive? Well I don't agree with the general concept of protectionism so I will act like any consumer and buy the one less expensive.


:frank:

[ajoeroooo]

^ I agree that "buy" Philippines has nothing to do with reducing inflation. If ever the Philippine govt. adopts such a stance, it would further increase inflation because we cannot compete with the cost structure of foreign imports.

Buying local produce even if expensive? Well I don't agree with the general concept of protectionism so I will act like any consumer and buy the one less expensive.


:frank:

well i dont wana cause any controversy here, but how can u say as such, when in fact, if u buy local goods, then u are actually helping our industries to be more competitive, & therefore, more productvity equates to more income & stability. that would even somehow lower the prices coz of the increased demand.

i never promoted protectionism here, nor the general concept of it 4 that matter. we live in a globalized world where the concern is always on quality & competition. but buying those less expensive imported goods doesnt mean ur buying 'quality' goods either...& besides, i never said "buy philippines" & forget the imported ones!!!...if u want to contribute to the growth of ur country, then try patronizing local products & not the other way around...

we are lookin for long-term ways to combat inflation, not 4 ways on how to trim down the prices coz what the market dictates is always right, or as being assumed so...

[Krayon]

ajoeroooo: prices will fall because of greater productivity and supply (remember, when demand shifts out, prices will rise, not fall)

In my opinion, we can only do two things: Make sure we have a good government and pay taxes. Fighting inflation is not our job.

Moreover, I don't really think inflation is our worst problem here in the Philippines.

[Carlitos]

Personally, one thing that could help me fight the rising inflation is through financial planning ...

Instead of putting my money on a savings account, I'd rather put it in a fixed income based Mutual Fund where it can yield higher interests and probably lesser tax (or none at all).

Inflation eats a lot on money being saved in a bank because of lower interest rates and higher holding tax ... You could end up losing some money, in a way, because of inflation.

[criduchat]

Stop borrowing from banks and avoid excessive spending..

if not

the government can always restrict the quantity of currency floating around and mandatory increase in interest rates for loans...

[froshie1]

Personally, one thing that could help me fight the rising inflation is through financial planning ...

Instead of putting my money on a savings account, I'd rather put it in a fixed income based Mutual Fund where it can yield higher interests and probably lesser tax (or none at all).

Inflation eats a lot on money being saved in a bank because of lower interest rates and higher holding tax ... You could end up losing some money, in a way, because of inflation.


what financial institutions have mutual funds? and what is the minimum placement for these?

[Hulk]

well i dont wana cause any controversy here, but how can u say as such, when in fact, if u buy local goods, then u are actually helping our industries to be more competitive, & therefore, more productvity equates to more income & stability. that would even somehow lower the prices coz of the increased demand.

i never promoted protectionism here, nor the general concept of it 4 that matter. we live in a globalized world where the concern is always on quality & competition. but buying those less expensive imported goods doesnt mean ur buying 'quality' goods either...& besides, i never said "buy philippines" & forget the imported ones!!!...if u want to contribute to the growth of ur country, then try patronizing local products & not the other way around...

we are lookin for long-term ways to combat inflation, not 4 ways on how to trim down the prices coz what the market dictates is always right, or as being assumed so...

Man! Your economics professor must have been a whacko!

Patronizing something more expensive will not help to lower prices either in the short-term or long-term. :eyecrazy:

Here's how the real market works: Kung ikaw nagbebenta ka ng fishball ng P10/stick while your nearby competitor sells it at P5/stick, but since all your friends are loyal to you they continue to patronize your more expensive balls.
Question, will you lower your price? OF COURSE NOT!!! You will continue your milking your friends.

Will it make you more efficient? NO!!!

Is there a compelling, urgent reason for you to improve? NO!!! You will be satisfied with your profits.

Sure you may scrimp a little on the oil and sticks but it won't compel you to do something drastic to be competitive. If you don't want to believe me, just ask yourself who are the most inefficient companies in the country... MONOPOLISTS!!!

Now if your friends suddenly come to their senses and buy from the other vendor, then you will be forced to compete or die! Competing doesn't simply being more efficient by cutting a little cost here and there, it means having the competitive advantage that could knock your opponent out of the market.


:frank: