What’s the plan to tame price hikes, Mr. President?

President Ferdinand Marcos Jr.

MANILA, Philippines — Making ends meet had not been easy in the past 12 months for Bianca Briones, a 23-year-old virtual assistant. She blames inflation.

“I’m lucky enough to have someone help me pay the bills because we all know how high the prices of necessities can be these days,” Briones said.

Briones is just one of the millions of Filipinos who will listen to President Ferdinand Marcos Jr. deliver his third State of the Nation Address (Sona) today.

They’ll hear the President speak of his accomplishments for sure. But amid the rising cost of living, perhaps the public would be more interested to know how he will soothe the Filipinos’ economic pain.

READ: Marcos ‘fine tuning’ Sona 2024 speech

Long hurting from the consequences of high food prices on their overall living conditions, many of them find the government measures to address the problem still sorely wanting.

According to the 2024 Pulse Asia survey conducted last June, 76 percent of Filipinos disapprove of how the administration is addressing inflation, while another poll conducted by the Social Weather Stations in the same month shows that 58 percent or nearly 16 million Filipino families rate themselves as poor.

Even the latest report from the National Nutrition Council says that one in three households still experience food insecurity, or the fear of having nothing to eat.

The economy in past year

In the past 12 months, Marcos had to tackle serious economic issues that damaged his popularity.

Inflation hovered above the government’s 2- to 4-percent target band for most part of the second half of 2023, before finally easing back to that range by the end of last year. But a flare-up is seen again this year due to high energy prices and the El Niñ0 onslaught, although price growth had remained within the state’s target range. In the first six months of 2024, inflation averaged 3.5 percent.

To tame inflation, the Bangko Sentral ng Pilipinas hiked interest rates to bring demand in line with limited supply.

However, high borrowing costs hit Filipino consumers and businesses. Consumption alone historically accounts for more than 70 percent of the country’s gross domestic product (GDP).

MARKET SENTIMENT The price of rice has become an unofficial barometer of the Marcos administration’s economic performance. —Grig C. Montegrande

The tight financial conditions, in turn, held back economic growth to 5.7 percent in the first quarter, below market expectations and falling short of the Marcos administration’s 6 to 7 percent growth target.

At the same time, the President will have to address the inflation woes while dealing with a tight fiscal space that’s forcing the government to control its spending on much-needed programs, and keep on borrowing from domestic and foreign creditors.

This year, economic managers are projecting a budget deficit that is equivalent to 5.6 percent of GDP, or still above the prepandemic level.

Critical issue

That said, Robert Dan Roces, chief economist at Security Bank, believes that tackling inflation should be Marcos’ top priority in the next 12 months.

“This is typically a critical issue for any administration as it directly affects citizens’ daily lives, especially those at the margins, and overall economic stability,” Roces points out.

For Leonardo Lanzona, economist at Ateneo de Manila University, the President’s plan to create quality jobs that pay enough amid hard times will be something that Filipinos would want to hear at his Sona.

“The government has been able to finally bounce back from the pandemic in terms of employment and economic growth. In fact, new jobs have been created recently. The problem, however, is the question of quality,” Lanzona notes.

“Most of the jobs created are mostly in the nature of self-employment and mostly short-term or contractual in nature,” he adds.

With legislators from both houses of Congress set to gather today, Anthony Lawrence Borja, political science professor at De La Salle University, says Mr. Marcos’ economic message must include a convincing call to lawmakers to pass his legislative wish list, including measures meant to boost growth and reduce poverty.

Such a call, Borja says, must be clear enough to reach aspiring lawmakers in the 2025 midterm elections.

“This is an opportunity for him to lay down a wish list that prospective members of his administration’s slate could appeal to in their respective campaigns,” he emphasizes. —with a report from Czasshaine Mai T. Abella

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BY THE NUMBERS

58 – Percentage of Filipino families who rate themselves as poor, according to the Social Weather Stations survey conducted from June 23 to July 1, 2024, an increase from the recorded 46 percent in March 2024. It’s the highest self-poverty rate since the 59 percent recorded in June 2008.

1,174,699 – Number of beneficiaries who received financial aid and farm inputs amounting to P9.23 billion from the government to mitigate the effects of El Niño on the agriculture sector, as of June 2024

P9.8 billion – Estimated worth of the farm damage or losses from El Niño as of June 2024

434 – Number of cities and municipalities placed under a state of calamity due to El Niño

183,455 – Farmers and fisherfolk whose livelihood were affected by El Niño in 13 regions as of June 2024

P29 – Price per kilo of rice sold by the Department of Agriculture through certain Kadiwa centers in Metro Manila in May 2024

2 million – Estimated number of households in the country that still live without electricity as of March 2024

P72 billion – Estimated budget needed to energize these remaining households before the end of President Marcos’ term in 2028

2.11 million – Jobless Filipinos as of May 2024, according to the Philippine Statistics Authority (PSA)

4.1 percent – Unemployment rate in the Philippines as of May 2024, according to the PSA

190,000 – Shortage of health-care workers in the country, according to the Department of Health, as of May 2024

300,000 – Beneficiaries of the Department of Social Welfare and Development’s (DSWD) Food Stamp Program once it goes into full implementation. Under the program, a beneficiary will receive an electronic benefit transfer card loaded with P3,000 worth of food credits every month that can be used to purchase certain commodities from DSWD-accredited retailers.

200,000 – Jobs expected to be generated from the investments as a result of the President Marcos’ foreign trips, according to the Department of Labor and Employment in July 2024

1 million – Target number of housing units to be built by the government every year until Marcos ends his term in 2028. In June 2024, according to Speaker Martin Romualdez, the national government remained on track to meet the target closing a housing backlog of 6.5 million units.

Sources: Inquirer Archives, sws.org.ph, pna.gov.ph, pco.gov.ph