By MAE SINGUAY
The continuing conflict between Israel and Iran could result in hyperinflation, or the uncontrollable rise in prices of goods and services over a defined period, which could also affect the Philippines’ economic growth, the Metro Bacolod Chamber of Commerce and Industry (MBCCI) said.
“In other words, hyperinflation is extremely rapid inflation when the rate grows at more than 50 percent a month,” Frank Carbon, MBCCI vice president for government affairs, said.
Economists say hyperinflation often leads to a severe loss of purchasing power and can destabilize the entire economy.
Carbon said the closure of the Strait of Hormuz — the only sea passage from the Middle East, and one of the world’s most strategically important choke points — due to the conflict between Israel and Iran will aggravate the supply of fuel and make survival plans imperative.
“Fuel prices will start to rise. And also food prices, which are already on the high side, will move further upward,” Carbon said.
“And all other costs — power, water, transportation — will follow,” he pointed out.
The MBCCI advised households and small businesses on how to keep afloat amid the possible hyperinflation.
“Buy budget or downsized packs to avoid wasteful consumption. Prepare your plans and ‘don’t sit in the sheepfold,’” Carbon said.
Be on the lookout for expenses that can be deferred when the budget is tight, he advised.
“Prepare a detailed list of weekly expenses. Review the list line by line,” Carbon said.
Earlier, the General Alliance of Workers Association (GAWA) warned that the expected rise in petroleum prices, driven by the escalating conflict between Israel and Iran, will trigger a chain reaction, raising the cost of goods and services and tightening already strained household budgets.
“This is a period of economic strangulation for our workers,” GAWA Secretary General Wennie Sancho said in a statement.
“The cost of living continues to rise, and yet workers are left without meaningful wage adjustments. They are fighting a battle on two fronts,” Sancho added.
He emphasized that the rising cost of fuel will have a ripple effect, making it even more difficult for workers and their families to afford the things they need.
Sancho said Congress’ inaction on wage hike proposals could have offered much-needed relief to struggling workers.
Without the proposal, their purchasing power would continue to weaken.
“The Congress should listen to the voices of the workers and take action to address their economic struggle,” Sancho said.
“In times of peace or crisis, workers remain the country’s primary economic drivers. They deserve better,” he said.
GAWA said workers will “soon collapse if too heavy economic load will be piled upon their shoulders.”
“Extreme economic adversities would lead to widespread hunger and poverty when the purchasing power of the workers collapses,” Sancho said.
Israel launched sweeping military strikes against Iran on June 13, targeting its nuclear program and long-range missile capabilities in Natanz, as its “leading nuclear scientists worked on the Iranian bomb” and Iran’s ballistic missile program.
Earlier this week, Israel agreed to a United States-brokered bilateral ceasefire with Iran but warned it will “respond forcefully to any violation.”/MS, WDJ