LET us talk about economics a bit.
The Philippine economy is in the doldrums, that’s how President Duterte put it. As expected, one of the country’s economic managers, Budget Secretary Benjamin Diokno objected to that. To paraphrase Diokno, our economy is actually, okay lang. But why the rising prices of goods?
This is not the result of a survey, but is from the Philippine Statistics Authority (PSA). The inflation rate is already at 5.2 percent, the PSA reported the other day. The last time the country’s inflation rate was this high was in October 2011, according to a rappler.com report. That was seven years ago or a little more than a year after Noynoy Aquino took over the presidency from Gloria Macapagal-Arroyo.
The June inflation rate is 0.6 percent higher than the 4.6 percent inflation rate in May, which was then only 4.6 percent. That means effort by the country’s economic managers to put some brakes to the rise in prices of goods failed.
Prices of food and non-alcoholic beverages rose by 6.1 percent from June. Rice prices rose by 4.7 percent and corn by 14.1 percent. Other cereals, flour, cereal preparation, bread, pasta and other bakery products rose by 2.4 percent. Meat prices rose by 5 percent, vegetables by 8.6 percent. Sugar, jam, honey, chocolate and confectionery rose by 3.9 percent and other food products by 3.1 percent.
Others: alcoholic beverages and tobacco (20.8 percent); housing, water, electricity, gas, and other fuels (4.6 percent); furnishing, household equipment and routine maintenance of the house (3 percent); transport (7.1 percent); communication (0.4 percent); and education (4.0 percent).
Consider that the country’s economic managers is aiming to keep the inflation rate from 2018 to 2022 within 2 percent to 4 percent. That was revised to between 4 percent to 4.5 percent. Even then, it now looks like the target would still be missed after the inflation rate reached 5.2 percent in June.
Consider that many of the goods hit by inflation are those affected by the imposition of the Tax Reform for Acceleration and Inclusion (Train) law, the biggest imposition having been the excise tax on oil products. Also hit were sugary products, including juices and beverages.
The tax imposition is meant to generate for the government bigger revenues to fund its ambitious Build, Build, Build program. Obviously, the country is groaning under the said imposition and some politicians like Sen. Bam Aquino are pushing for the suspension of the imposition of the Train law. This, of course, is being opposed by the country’s economic managers, who had before this rise in the inflation rate pushed for the imposition of Train 2.
We won’t say that our officials are mismanaging the economy, even if in the other aspects they also failed miserably. The peso, for example, which was among the best performer in Asia under the Aquino administration, is now the region’s worst performer.
I say the people’s increasing disillusionment with the Duterte administration is rooted in the economic woes the country is in. It’s not caused by any destabilization effort by the enemies of the government. The problem is internal for the Duterte administration, not external.