The Role of Media Paradox in Philippine Inflation
Hi there folks. Thanks for constantly dropping by. We're back and I can't wait to post some interesting insights about us, beautiful, wonderful and smart consumers and how we survive in the maddening world of consumerism.
Our lesson for today is all about the CPI, or Consumer Price Index. Wait, don't get on tab mode just yet. Sure, who wants percentages, ratios, year-on-year comparisons and more inflation lessons on your net time. Unless you're some underpaid, domain (non-) writer for a BPO company based in India or the Philippines, you have no choice. But for free spirits out there, gee, no thanks!
However, what I would like to point out in this entry is the surprising relation between mundane tidbits of business news and the everyday Pinoy's spending (and selling) habits.
The hard facts:
1. February 2009 Inflation rate (the increase in the prices of goods and services) was up at 7.3% year-on-year (as against February 2008, which was 5.4%).
2. The uptick was attributed to the inevitable increase in food, beverages and tobacco index coupled with some drastic increases in the price of utilities services (light, water and fuel).
3. The National Statistical Coordination Board (NSCB) where the quarterly inflation report comes from, specifically pointed out the increase "was mainly due to the upward price adjustments in the heavily weighted food items particularly rice, meat, corn and eggs. Moreover, higher prices of LPG in many regions including NCR and increased prices of charcoal in some regions were also observed during the month."
Spices to the noodle, as business reporters refer to data below, include:
4. Higher annual inflation was also noted in the corn index at 27.4 percent from 25.3 percent; eggs, 7.3 percent from 7.2 percent; fruits and vegetables, 4.9 percent from 4.2 percent; and meat, 10.5 percent from 10.2 percent.
5. The annual inflation in the cereal preparations index slowed to 14.7 percent in February from 16.9 percent in January; dairy products, 10.1 percent from 11.7 percent; fish, 7.8 percent from 9.5 percent; and miscellaneous foods, 7.2 percent from 8.3 percent.
Indeed, pre-and post-February 2009 saw us, independent consumers complaining about the sudden increase in the price of rice. Sometime January, I bought a few kilos of the P28 per kilo rice variety from the neighborhood rice retailer. There was the lowest-priced P26 per kilo variant which had slightly smaller grains, but other than that, the contents of the two bins looked the same to me.
A mid-priced variety was P38, P10 more than my preferred variant and was remarkably whiter, smoother and larger in grain-size. The highest variant was priced at P42 a kilo.
On that same night, a primetime news program ran an item about the possibility of a slight increase in the price of rice due to distribution backlogs brought about by the recent storms and nasty weathers.
The reporter gave some nice editing guides to the video editor, with the lead smoothly segueing to the profile of some eager-beaver undersecretary and, with accompanying natsot and sound bite, made a promise that the increase will not be permanent as everything is expected to get back to normal once the distribution channels are in place again.
The next morning, on the way to work, freshly pentel-penned cardboard price tags were half-buried in my neighborhood store's rice bins. Gone was the P26 rice variant yesterday afternoon. Instead, the same bin where the P26 was placed now sports a red P28, while the next bin bear P32 (for the rice that had the P28 tag the night before). Similarly, gone was the P38, and in its place glared a shocking P42. Consequently, the highest priced variety that was just P42 last night was now P46.
Who can solve the mystery of the changing price tags
in rice retailer bins?
Indeed, talk about media hype. Looking back at my reckless reporter days, I thought how story submission deadlines, beat assignments and random business quotes can alter price tag colors and their bin locations as well as the purchasing power and rice variant option for the average Filipino.
A smile ran across my face when I suddenly remembered those reckless reporter days, when young, eager and so full of angles for even the most mundane of stories, I would submit reports about "impending" occurrences brought about by current situations whose links are gladly conceived and justified by some editorial authority figure with the least manipulation on my end. The next day, my story would bear earth-shattering headlines like "Heads to Roll in the ______ Department," "Panic in Compact Car Compartments," or "Bluetooth Embarrassed Antenna Toters."
You see, I have long observed and pondered that story submissions by reporters, coupled with (or the lack of) a creative headline that can only come from he most brilliant editorial minds in the newspaper or the TV network, has something to do with how the world turns and why events (including boring ones like CPI and inflation) behave the way they do.
The paradox involving media and CPI is that whenever the media made a disclaimer, like the rice story I retold above, that "everything is expected to return to normal once the disruptive factor (in our rice story case, it's the distribution channels) has been calmed and soothed," the reverse happens.
Since that morning of the case of the missing P26 price tag in the neighborhood retail rice bin, up to this very day, nothing has changed. I figured that just like wage security, price tags, especially in neighborhood retail rice bins, cannot go lower sans "return to normal" signals are up.
Save for some basic commodities guarded by consumer watchdogs like petroleum, LPG and fuel, there is always an effect when a news broadcast programming accommodates an "impending price increase" of this and that commodity, either to fill a vacant 30-seconder vacuum in the final gap, or have something, finally, to present as a "business news" and put those business banner graphics, downstreams and upstreams to use.
I therefore conclude that: the price increase of some basic commodities are directly proportional to the media mileage a random business quote gets in a primetime news program.
Now, there's a new, fresh and intuitive insight (if I can say so myself) that NSCB analysts can add to the CPI narrative analysis template that always accompany the quarterly CPI and inflation report.
Again, that is just my opinion. But as Simon Cowell puts it, I'm always right.
Hehehe.....
