In Philippines, tingi thrives amid COVID pandemic, spiraling prices

By Diego Gabriel C. Robles

MA. MICHELLINE L. REYES, 55, operates a mom-and-pop store that sells shampoo in sachets, coffee in packets and other odds and ends in Marikina City near the Philippine capital.

For most of her neighbors with a limited budget, buying small amounts of just about anything is a big help amid spiraling prices and a looming global food crisis.

“Smokers typically buy five sticks of cigarettes, not the whole pack,” Ms. Reyes said in a text message. “It’s the same with eggs. Nobody buys a tray.”

The practice of buying tingi, or in really small amounts, shows just how little money Filipinos have in their pockets, hence the saying “Isang kahig, isang tuka” (One scratch, one peck).

“It’s not an exclusively Filipino thing since it’s essentially borne of poverty and poverty is certainly a universal experience,” Louie C. Montemar, a professor of sociology and political science and a fellow at the Stratbase ADR Institute said in an e-mail.

“It just so happens that we have a rather ‘cute’ and specific term in our national language for what could be roughly translated to English as ‘retail culture,’” he added.

“The term ‘tingi culture’ was apparently coined by Filipino author Nicomedes ‘Nick’ M. Joaquin, who saw it rather condescendingly as a ‘heritage of smallness.’”

In his book Culture and History, the late author faulted the Filipino’s habit of buying and selling small as an indication of a nation’s humble economic and commercial ambitions.

“What most astonishes foreigners in the Philippines is that this is a country, perhaps the only one in the world, where people buy and sell one stick of cigarette, half a head of garlic, a dab of pomade, part of the contents of a can or bottle, one single egg, one single banana,” he said.

“I would rather see it as a manifestation of our people’s ability to adapt to poverty,” Mr. Montemar said. “It shows Filipino resilience, innovativeness, creativity and entrepreneurship.”

The lack of income forces households to buy things in small packets especially amid spiraling prices, according to Ateneo de Manila University economics professor Leonardo A. Lanzona.

Filipinos’ retail culture “can be considered a coping mechanism for poor individuals and households, as well as a marketing strategy of companies to tap the latent purchasing power of the bottom of the pyramid,” Cid L. Terosa, a senior economist at the University of Asia and the Pacific, said in an e-mail.

“It became more intense and apparent in 2020 to 2021 because the coronavirus pandemic gravely decapitated their purchasing power,” he added.

The average income of Filipino households fell by 2% year on year to P307,190 in 2021 from three years earlier, according to data from the local statistics agency. About 20 million Filipinos or 18% of the population were living in poverty as of end-2021.

Between 2018 and 2021, the income of 2.32 million more people fell below the per capita threshold, with many of them having been forced to work fewer hours amid coronavirus lockdowns. About 3.5 million Filipinos from 492,000 families fell into poverty.

The amount needed by an average Filipino to meet his monthly basic needs increased to P2,406 last year from P2,151 in 2018. For a family of five, the amount rose to P12,030 from P10,756 a month.

Small entrepreneurs are also suffering amid rising prices. An Asian Development Bank (ADB) study found that the sales of 82.7% of informal businesses dove, though more than three-quarters of these managed to stay open.

Ms. Reyes said her sales were halved at the height of the pandemic after she was forced to close amid strict lockdowns that were one of the longest and strictest in the world.

Filipinos are unlikely to shake off buying sachets — blamed for pollution caused by plastic wastes — any time soon, said Samuel Cabbuag, assistant professor at the University of the Philippines Department of Sociology.

“They will not go to supermarkets and wholesale stores to buy the bigger version of those goods because many of them still could not afford it,” he said. “While prices of these sachet goods are increasing, many people still buy them. At the end of the day, consumption is social.”

Inflation eased to 6.3% in August, bringing the eight-month average to 4.9%, still above the Philippine central bank’s 2-4% target.

The index for food and nonalcoholic beverages that accounts for 38% of the consumer price index slowed to 6.3% from 6.4% a month earlier. While the food index eased to 6.5% from 7.1%, the inflation in sugar, confectionary and desserts quickened to 26% from 17.6%.

Ms. Reyes said small bottled soft drinks, whose prices have risen amid tight sugar supply, are the most popular among her customers.

Core inflation, which disregards the prices of food and fuel, rose to 4.6% last months from 3.9% in July and 2.8% a year earlier.

“The fact that even prices of sachet items increased due to inflation speaks a lot about how limited the resources can be for those who are struggling,” Mr. Cabbuag said.

FINTECH
Ms. Reyes said she only needed P10,000 in capital when she started her mom-and-pop store in 2009. “Before, P10,000 meant more stocks for my store. Now, with the same amount, the supply is lacking.”

Like most sellers, she also had to raise her prices to survive, while making use of digital payment platforms such as GCash to adapt to the times.

“Many customers have been asking if I accept GCash,” she said. “As many as five of 10 customers prefer to pay through that.”

The ADB study found that one of 10 informal businesses in Philippine cities used digital payments in 2020 at the height of the pandemic, when online shopping became the norm.

It added that 17.3% of unregistered household-based businesses accepted digital payments, while 5.8% paid their suppliers digitally. Both were higher than household-based registered companies at 14.3% and 3.6%.

Still, financial technology adoption by these Philippine businesses was lower than their peers in the region at about a quarter for both registered and unregistered household-based companies for customer payments, and between 13.8% and 18.1% when it came to paying their suppliers.

“The key point here is that the sari-sari store links the formal sector to the informal sector, which in turn is linked to poor households,” Mr. Lanzona said. “It plays an important role in the economy.”

The practice of buying and selling products in sachets may not be unique to the Philippines as a developing country, Mr. Montemar said. “But clearly, multinational corporations have adjusted to our tingi culture by developing more products in smaller packages.”

“It is a sign of inefficiency for the whole economy,” Mr. Lanzona said. “For a country that’s aiming to achieve a higher middle-income status, the prevalence of this practice is a clear sign that the goal is a long way off.”

Ms. Reyes, the mom-and-pop store owner, said her business is a big help to her family.

“I managed to eventually invest in a water station,” she said. “I pay the household bills and buying maintenance medicines is not a problem.”