by Jan Michael Carpo, Reporter
The Philippine economy has faced several challenges in 2022, including the ongoing COVID-19 pandemic, rising inflation, and global economic uncertainties. However, the country has shown remarkable resilience, with various indicators pointing to a sustained recovery.
According to the National Economic and Development Authority (NEDA), protecting the purchasing power of Filipinos remains the government’s top priority as domestic and global headwinds continue to be a challenge.
“As part of the 8-point Socioeconomic Agenda of the Marcos Administration and as laid out in the Philippine Development Plan (PDP) 2023-2028, the government will continue to prioritize addressing the impact of inflation as it remains to be a challenge not only in the country but throughout the globe,” said NEDA Secretary Arsenio M. Balisacan in a press statement.
He likewise noted the timely decision of President Ferdinand R. Marcos, Jr. to extend the validity of the reduced import rate duties on various products such as pork, rice, corn, and coal until December 2023.
“Executive Order No. 10, series of 2022 will continue to provide diversified sources of food and agricultural inputs in the short term. The operational intervention, however, is to ensure food security by boosting food production, improving farm-to-market connectivity, and investing in disaster resilience, as well as climate adaptation measures, and coordination mechanisms,” he added.
According to Balisacan, enhancing the value chain through digital technology and the development of climate-smart farm products will also play an essential role in securing food supply and prices.
In a related development, the Philippine Stock Exchange (PSE) index has also shown resilience, with the benchmark index hovering above the 7,000 level despite the challenges facing the country. This suggests that a lot of investors still remain confident in the long-term prospects of the Philippine economy.
However, the country still faces various challenges, particularly with regard to inflation.
Battling COVID-19 and the high inflation rate
In a report released earlier this year, the Philippine Statistics Authority (PSA) revealed that the country’s headline inflation rate has marginally increased from 8.0 per cent in November 2022 to 8.1 per cent in December last year. This brings the full-year 2022 average inflation rate to 5.8 per cent, which is above the government’s inflation target of 2.0-4.0 per cent.
The continued uptrend in the country’s inflation rate in December 2022 was driven by a higher price index for electricity, accounting for 1 percentage point (ppt), followed by vegetables with 0.9 ppt. Restaurant services also accelerated and contributed 0.7 ppt, while private and public transport contributed a total of 1.0 ppt.
Inflation has already reached a nine-year high of 7.2% in October 2022, and the same was said to have been driven by rising food and fuel prices.
The government has been taking various measures to address this issue, including the implementation of price controls and the liberalization of rice imports.
Moreover, the COVID-19 pandemic continues to pose a significant threat to the Philippine economy, particularly with regard to the tourism and hospitality sectors.
The government has since implemented various measures to contain the further spread of the virus and support affected industries, including the establishment of travel corridors and the provision of financial assistance to affected workers and businesses.
The PH government’s efforts to implement economic reforms
In spite of these challenges, the Philippine economy has shown great resilience, aided in part by the effort of past and present administrations.
For instance, the government has implemented the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which aims to attract more foreign investments and support domestic businesses through lower corporate taxes and other incentives.
In addition, the administration of former president Rodrigo Duterte also prioritized the development of infrastructure, with various projects under the “Build, Build, Build” program continuing to move forward.
These projects are expected to create jobs, stimulate economic activity, and improve the country’s competitiveness in the future.
The current administration, meanwhile, has also taken steps to promote greater financial inclusion and support the development of the micro, small, and medium enterprises (MSMEs) sector. These efforts are seen to help further spur greater economic activity and job creation, particularly in rural areas and among marginalized communities.
While inflation and the COVID-19 pandemic continue to pose significant risks, the government’s efforts to implement economic reforms, support affected industries, and promote greater financial inclusion are key to driving sustained growth and development in the long term.