Marcos: Inflation ‘biggest problem,’ but prices now stabilizing

Inflation has been the “biggest problem” encountered in the past year but the government is now moving to stabilize prices of critical commodities, President Ferdinand “Bongbong” Marcos Jr. said Monday.

In his second State of the Nation Address (SONA), Marcos cited the deceleration of inflation in the past five months, even as it continues to be above the government target of 2.0% to 4.0%.

“Last year we emphasized certain strong headwinds that were confronting us along with the rest of the world in our post-pandemic economic recovery, and the biggest problem that we encountered was inflation,” he said.

Inflation eased to 5.4% in June, down from 6.1% in May and the fifth straight month of deceleration from the 8.7% peak in January. It is also the lowest since April 2022’s 4.9%.

“Inflation rate is moving in the right direction. From 8.7% in January, our inflation rate, inspite of all the difficulties, we are transforming the economy. We are stabilizing the prices of all critical commodities,” Marcos said.

The Bangko Sentral ng Pilipinas (BSP) said inflation is expected to be above the target range for most of 2023, before falling within the higher end by October this year.

It is expected to average 5.4% this year before stabilizing to 2.9% in 2024, and 3.2% in 2025.

Growth 'highest in 46 years'

Marcos also cited the 7.6% economic expansion in 2022, which he touted as  the highest in 46 years. This came as the country gradually reopened its borders and eased COVID-19. The economy expanded by 5.7% in 2021, after the economy contracted by 9.5% in 2020.

“We are still considered to be among the fastest growing economies in the ASEAN and in the world. It is a testament to our strong macroeconomic fundamental systems,” he said.

The Philippine economy grew by 6.1% in the first quarter of 2023, slower than the 8.0% growth in the same quarter last year and the 7.1% expansion in the last quarter of 2022. Second-quarter figures have yet to be released.

The latest figures show that while the Philippines is among the top in Southeast Asia, it is slower than other areas in Asia alone — Macau with 38.0%, and Armenia with 12.1%.—LDF, GMA Integrated News