Forget About Open FDI, Let's Open #SahodItaasPresyoIbaba Stores Instead

A really disastrous decision! Before the Buwan ng Wika ends, I want to write about those who have been demanding "Sahod itaas! Presyo ibaba!" (Raise salaries, lower prices). Back in 2022, I wrote an article discussing why the demands for higher salaries, lower prices of goods, and handouts for all are a recipe for disaster . I could laugh at people who believed in the promise of PHP 20.00 per kilo of rice promise of Philippine President Ferdinand R. Marcos Jr. Before that, people had been demanding #SahodItaasPresyoIbaba during the reigns of the late former president Benigno Simeon C. Aquino III and former president Rodrigo R. Duterte. Image by Sabrina Jiang © Investopedia 2020 I did explain why the model doesn't work. In the cost of production, you need to account for everything that happens including salaries . Raising salaries during inflation can actually worsen the situation . It's because sticky inflation happens with cost-push factors (ex. cost of gasoline, co...