The Filipino Purchasing Power in the Scheme of Inclusive Growth

If Philippine economic growth is to be inclusive, it must be able to sustain an empowered Filipino consumer by boosting their purchasing power.

This concept not only redounds to a strong currency, but a healthy financial and economic system as well that is the result of a holistic approach to growth.

Purchasing power refers to the extent to which one's peso can cover all of one's basic needs, as well as leave enough disposable income for non-necessities such as recreation.

To create a Filipino with extensive purchasing power, government must be able to manage through sound monetary policy the inflation rate, which, if held at reasonable levels, would keep basic necessities within the reach of the ordinary Filipino.

Filipinos must be engaged in wealth creation activities as well, which thrives well in a meritocratic economic system, where effort and talent are justly rewarded. To achieve such, the economic ecosystem must be well disposed towards encouraging the entrepreneurial spirit, not just the mere securing of a job after college graduation. Filipinos must get into the mindset that they should engage in enterprise not only to enrich their own pockets, but to help society as a whole as well. With enterprises come more jobs, which benefits local communities, and with them they are able to jumpstart wealth creation activities where not only the entrepreneur benefits.

Observe the average Filipino microenterprise. There are those who sell food to their co-workers, buy scrap materials from their bosses for up cycling or recycling, cooperatives or informal financial services such as hulugan and paluwagan are initiated. Enterprises create an interdependent ecosystem that allows its participants to improve their lives based on their willingness to work hard or harder for their families.

Thus, government must keep looking at its portfolio of services on how better to serve the small and medium enterprise market with incentives  and disintermediated or automated services that do not necessitate under the table deals or patronage economics, which are counterproductive to enterprise growth.

Apart from keeping prices at reasonable levels, and wealth creation, government and private sector should work together to make it easier for the ordinary Juan Dela Cruz to have access to and own assets that could be used to propel wealth creation.

For instance, real estate should be easier to secure than it is in the current system. Government must be more assiduous in addressing the issue of informal settlers. On informal settlers, they should be given assistance, but not outright dole outs to own decent houses in decent communities that lend dignity to their existence. Squatting perpetrates the mindset that one can live off  the fire in one's belly and not much else, because most of the amenities here come with only the price tag of angas and kapal ng mukha. Electricity here comes from jumper connections, water is illegally tapped and they build on land that is not their own.

If informal settlers are given a chance to own a decent home, one that would make them feel dignified, they would own up to the responsibility of owning a home--of paying bills and taxes and taking care of maintenance matters. Home ownership teaches values and skills that prepares Filipinos for a more dignified existence, one that predisposes them to active and confident participation in formal economic and social activities.

With a home, real property, an asset, comes the opportunity to get into the formal economic system as an entrepreneur. Real property can be used as collateral to get a loan to start a small enterprise with, and with such access to capital, potential is tapped and the possibilities seem endless.

But what about those who have not yet the capacity to own assets? Microfinance could be the answer to this conundrum. The Grameen Bank is a proven model, and with technological innovations almost seemingly limitless, it can be delivered more efficiently to a wider user base with lower risk. The Globe BanKo platform seems to be an ideal jump off point for this service, with issues seen in credit risk management and assessment. 

How else do you boost purchasing power? Win over the heart and mind of the Filipino. Teach him he can be anything he wants to be, that whatever he dreams of is within reach. Nothing is impossible. Countries that are the bedrock of innovation today are founded by fathers from the past who took courage in both hands, started businesses with it, and never looked back.