THERE was a time when millionaires honestly thought they would outlive their wealth, but that is no longer true today when everybody can earn a million pesos and still be poor.
An ordinary employee earning P500 per day would collect P15,000 a month for a total of P180,000 a year. By the end of the sixth year, he would have made more than a million pesos.
But he would not have that much because he would have spent most or all of it by that time due to increasingly higher cost of living.
In other words, if you are given one million pesos in cash today, that would no longer be enough for the next six years – no thanks to inflation or the gradual increases in prices of the same goods.
On the other hand, if you had a million pesos in 1960, you would think you had saved enough for a lifetime. That would hold true even for more than a lifetime if the value of money had remained steady. I know because I remember how it was when I was a 10 year-old kid.
In 1960, to illustrate, the minimum wage was P120 a month or P1,440 in one year. If you were earning that much, you would presumably need P144,000 to live comfortably in 100 years. A millionaire had the distinction of being an exceptional tycoon who had much more than enough to spend in a lifetime.
I was 12 years old and a freshman in high school in 1962 when I became aware of the loss of the buying power of money. In that year, the price of soft drinks jumped from 10 centavos to 15 centavos per bottle.
Alas, today’s millionaire would no longer expect a lifetime of wealth because the value of his million has plummeted. Simply put, today’s one peso is weaker than one centavo which could buy a piece of candy in the 1950s.
We Filipinos of today have much more money now than we had half a century ago, but it could buy lesser goods. Today, if your wallet contains a thousand pesos, it could melt in a single visit to a mall. But the same amount could feed a family for six months or more in the 1950s and even in the early ‘60s!
I was 10 years young in 1960 when our parents took us four kids to Quezon City for a two-month summer vacation. Our two-hundred-peso baon took care of the house rental, food and shopping expenses. The rental rate for the two-storey apartment we occupied on 23-A Dapitan St. was only P60 per month. But by sharing the same house with another family, that much was good for our two-month rental.
In the 1970s, even when President Ferdinand Marcos had already declared martial law, price increases were still infrequent and would be met with salary increases. With a wife and a baby boy, I made both ends meet on an average monthly income of P700.
In 1981 when I relocated to Iloilo City to edit the then fledgling weekly Panay News, the so-called PUs (small Minica taxi cabs) were charging a flat rate of P10 for a ride anywhere within the city ride. An overnight stay at Hotel del Rio cost P120.
Times have changed since then. While much more money has gone into circulation, the average income earner – more or less P15,000/month – can no longer cope with galloping prices.
The key to beat inflation is not to save more money but to earn much more. As to how, kanya-kanyang diskarte na ‘yan. (hvego31@gmail.com/PN)
