Zoilo “Bingo” P. Dejaresco III l August 8, 2023 l Manila Bulletin
Filipinos do not expect their sitting presidents to indulge in pessimism during his “State of the Nation” (SONA) address but would, instead, rally the nation to greater heights. As President Bongbong Marcos did.
But at the end of the day, ordinary Filipinos, most of all, care largely about inflation- the cost of goods and services here- to keep their body and soul together.
Inflation hit 8.7% in January and tapered down to 5.4% in June. But this inflation has been the highest in the last 14 years starting from 2010. Inflation could average out at 6% for the full year 2023.
The GDP growth rate for 2023 is projected to hit about 6%, alright, but if the “average” inflation here is also 6%, then there is no improvement in Juan Dela Cruz’s well-being. It is akin to him -exhausting himself on a treadmill-exerting emasculating effort without really getting anywhere.
The government says it has licked unemployment by bringing it down from 5.7 percent in April last year to 4.5 percent today and aims for 5.3 to 6.4 percent for 2023.
But if the economy is really growing as fast and unemployment licked- why is it that the recent self-rating poverty survey done by the Social Weather Station (SWS)- from March to May this year (2023)- showed that about 50% of Filipinos rate themselves as poor with a lot of food insecurity.
This is affirmed by an ADB (Asian Development Bank ) report that said that according to the United Nations Food and Agriculture Organization (FAO), about 43.8% of Filipinos suffer from food insecurity with 5.2 % of the population and 26.7% of children (below 5 years old) being malnourished.
Our own Philippine Statistics Authority tags the poor rural fisherfolk, farmers and individuals as the nation’s poorest- 14 million of them with 10 million of those children.
The reason behind this seeming irony is the wide financial gap between the rich and the poor in the country. When GDP grows, the growth is skewed in favor of the rich- thus, contributing even more to the ever-widening chasm between the haves and have-nots every time GDP grows.
Mathematically, it can be argued, therefore, that the formula of computing the Per Capita GDP by dividing Gross National Product by the population, is at best inaccurate and at worst, misleading.
Likewise, inflation cannot be viewed in just one narrow perspective. It has to be measured against the wages and capacity to earn of Filipinos to be able to hack the inflationary pressures. But when wages are at starvation levels and his capacity to earn nil, and faced with high prices of goods and services, the Filipino is caught in the proverbial “devil and the deep blue sea”. Talking about high power costs, water rationing, and horrendous traffic due to poor infrastructure and transportation facilities, one begins to understand why over 10 million Filipinos have gone abroad to seek better livelihoods.
Meantime, as the American Federal Reserves continue to raise interest rates in the USA 11 times in their 12 meetings and are set to perhaps raise it further in September (to contain their own inflation), within the last year the Peso-Dollar exchange rate once breached P59:$1. This is never good for us since our core inflation is largely food and energy driven and both are imported in a massive way.
Meantime, the total national debt had scaled nearing a record P15-Trillion with a significant part of the incremental debt foreign-currency-denominated, exacerbating currency pressures.
Of course, the President has promised to wage battle against agricultural smugglers and cartels but this has been a long time coming. We are watching if any of these economic saboteurs do, in fact, get collared soon and jailed.
His aspirational target of P20/kilo of rice is far from reality today. Given the natural limitations of our agriculture sector, it will take an enormous amount of government subsidy to drop the price of rice to the P20/kilo level. But if there is so much government subsidy, it almost amounts to next to nothing (in net gain) since the Filipinos will eventually have to shoulder the pain of those subsidies.
The resurrected KADIWA stores, on the other hand, are reportedly not that pervasive and benefit only 1.8 million families which is only 7% of the total Philippine population. Inflation will, therefore, likely stay with us like an unwanted pimple or acne, for some time.
In fact, according to statistics gathered by J. Punongbayan of the University of the Philippines, from June 2022 (when BBM took over) to June 2023 (one year after) most prices except for “financial services” and “transportation” have gone up.
These statistics, note well, were compiled from the government-operated Philippine Statistics Authority (PSA).
On a positive note, the fiscal and monetary management of the nation has been well taken care of -leading to an upgrade by the renowned rating agency Fitch International from “negative” to “stable” which is well and good.
But we must all keep in mind that regardless of what these other considerations are, the worry of Juan Dela Cruz tonight is only ONE thing: where will I get my food tomorrow for my family and if we get sick does the government have enough “safety nets: to rescue us?
That is the real gut SONA issue for the poor.
*** (Bingo Dejaresco, a former banker, is a financial consultant and media practitioner. He is a Life and Media member of Finex. His views here, however, are personal and do not necessarily reflect those of Finex and Manila Bulletin. Dejarescobingo@yahoo.com)