Pricele #75: Big Mac in Philippines 🇵🇭

The Big Mac is the most-quoted price in economics. The Economist started publishing its Big Mac Index in 1986 as a light-hearted way to test purchasing-power parity, the theory that a currency should buy the same basket of goods anywhere. Because the burger is close to identical everywhere it is sold, the gap between what it costs in two countries is a rough read on whether a currency is over- or undervalued.

Of the 45 countries priced for big mac, Philippines ranks #42 from the top at $2.84, 49% below the median of $5.53.

The Philippines pays for its geography. Moving goods between more than seven thousand islands adds a freight cost to almost everything, and it lands on top of a 12% VAT. Electricity is the sharpest case: generation is privately owned, largely coal-fired and largely imported, and there is no household subsidy, which leaves Filipino households paying among the highest power tariffs in Asia in dollar terms, and far more than that measured against local wages. Rice is the countervailing example, managed through tariffs and an import fund precisely because it is politically impossible to let it float.

See the full table for big mac in every country or everything priced in Philippines.