Philippine Economy: Much Work Has to be Done
President Ferdinand Marcos Jr. is one chief executive who does not sit back and rest on his laurels. The Philippine economy may have grown by 7.6 percent in 2022, the fastest in nearly four decades, but with the still high inflation rate across the nation, President Marcos knows too well that not everybody is enjoying the benefits of the economic recovery.
Just like his predecessor, former President Rodrigo Duterte, President Marcos is aware of the gut issues of the day. Every political leader must be sensitive to the plight of the hard working common man. The high inflation rate is one factor that hits the pocket of every consumer. High prices erode their purchasing power.
A confluence of global and local supply shocks has driven food prices higher. Rising petroleum prices also led to significant increases in fertilizer and farming costs.
Local newspaper headlines and radio and television news programs, meanwhile, have screamed about the sharp spike in onion prices for weeks. And for good reason. Onion is one of the basic vegetables used in cooking Filipino dishes. It is also commercially grown in the country and one wonders why onion prices shot up.
President Marcos wisely ordered onion imports to either fill in a supply gap or offset the anomaly in the trading of the vegetable item to stop a spike in prices. Fortunately, the imports lowered onion prices from a high of over P700 a kilo to about P180 or less last week.
It is President Marcos’ job to stabilize agricultural prices. I am sure our chief executive was already briefed about the intricacies of local onion trading and ways to stabilize its prices to about P170 a kilo, or even to as low as P80 a kilo in certain months or during the harvest season.
The onion shortage and its high prices are a reflection of the lack of post-harvest facilities in the Philippines. Our farmers are often left at the mercy of traders due to the absence of these facilities, where they can temporarily store their crops for a longer time. Not enough agricultural products actually reach the market also due to the lack of post-harvest facilities. As result, farmers incur post-harvest losses that tend to drive up prices of vegetables and other agricultural crops.
The high cost of food, vegetable and meat, along with unpredictable crude oil prices in the world market following Russia’s invasion of Ukraine, is one of the challenges faced by the Philippine economy this year. President Marcos, to his credit, is very honest about the inflation menace. He admitted that he had been “losing sleep” over the high inflation rate.
His worries hopefully should dissipate early this year. His economic team assured him that the inflation rate would go down to 4 percent by the third or fourth quarter of 2023, after hitting a high of 8.1 percent in December last year.
President Marcos, though, was not all glum on the Philippine economy. In fact, he was high-spirited after learning about the gross domestic product results. Says President Marcos: “We are happy to receive the news that our growth rate for the year 2022 exceeded all expectations even by the estimates of the international financing institutions and we are holding at 7.6 percent.”
His decision to resume face-to-case classes and lift more Covid-19 restrictions revitalized the economy further and resulted in more revenge spending on malls, restaurants and travel. It allowed the economy to generate more jobs and restored the confidence of consumers.
The Philippines’s growth story is a perfect attraction for foreign investors. We need more foreign investments to sustain economic growth. President Marcos’s investment pitch in his recent foreign sorties is timely given the impressive growth we registered last year.
As I’ve written in my previous column, the 7.6-percent expansion will draw the attention of foreign investors. President Marcos actively promoted the Philippines as a promising investment destination in his meetings abroad. In his own words, the Philippines must maintain the growth rate through foreign investments.
Much work has to be done, however. The Philippines faced several challenges during the pandemic years. Yet, we survived and persevered with determination.