Inflation Response: Filipinos Were Unhappy

Inflation Response

FILIPINOS are not happy with the government’s performance in managing inflation response and reducing poverty

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Common reasons for discontent with the government’s inflation response might include:

  1. Economic Hardship: High inflation response can result in increased financial strain on households, making it more difficult for people to make ends meet. This can lead to frustration and discontent with the government’s economic policies.
  2. Unemployment: Inflation Response can also be linked to job instability or loss, as businesses may struggle to cope with rising costs. If people perceive that the government is not doing enough to create jobs or stimulate economic growth, they may express dissatisfaction.
  3. Perceived Ineffectiveness: If the government’s policies to combat inflation are perceived as inadequate or ineffective, citizens may lose confidence in their leaders’ ability to address economic challenges.
  4. Social Unrest: High inflation Response can sometimes lead to social unrest and protests, as people seek to draw attention to their economic struggles and demand government action.
  5. Political Factors: Public dissatisfaction with the government’s handling of inflation response can also be influenced by political factors, including opposition parties and media coverage.
Inflation Response

In a recent survey conducted by OCTA Research, the Marcos administration was rated highly for its provision of education and healthcare, response to natural disasters, and protection of overseas Filipino workers. However, the Second Quarter Survey held from July 22 to 26 also indicated that the government’s efforts to reduce poverty and manage inflation response were not as satisfactory, with only 36% and 34% of respondents expressing satisfaction in these areas, respectively.

Conversely, 32% of respondents expressed dissatisfaction with the government’s handling of inflation response, while 26% were dissatisfied with its efforts to reduce poverty. Overall, seven out of 10 respondents expressed satisfaction with the Marcos government’s performance in the aforementioned areas.

In August 2023, the Philippines saw a rise in headline inflation, reaching 5.3%, up from 4.7% in July 2023.

This pushed the average national inflation response for January to August 2023 to 6.6%. In comparison, August 2022 had a slightly higher inflation rate at 6.3%

Factors Driving the Increase in Headline Inflation

The surge in overall inflation response in August 2023 was mainly driven by a significant year-on-year increase in the prices of food and non-alcoholic beverages, which rose to 8.1% from 6.3% the previous month.

Additionally, the transport sector, which saw a 0.2% increase during the month, rebounded from a 4.7% annual decline in July 2023. Furthermore, the recreation, sport, and culture index recorded a 4.9% annual increase during the month, up from 4.7% in July 2023.

Food inflation in August 2023 rose to 8.2%, up from 6.3% in July 2023, although it was lower than the 6.5% recorded in August 2022.

Key Factors Behind the Food Inflation Trend

The surge in food inflation during August 2023 was primarily driven by a significant year-on-year growth in rice prices, which escalated to 8.7% from 4.2% in July 2023. This was closely followed by vegetables, tubers, plantains, cooking bananas, and pulses, which experienced an inflation rate of 31.9% during the month, up from 21.8% in July 2023. Additionally, there were faster annual increments noted in fish and other seafood, with a 6.9% increase in August 2023 compared to 4.5% in the previous month, and fruits and nuts, which exhibited a 9.6% rise during the month, up from 8.4% in July 2023.

In contrast, the indices for meat and other parts of slaughtered land animals showed a slower annual decrease of -0.1% in August 2023, compared to -1.7% in the previous month.

Furthermore, when compared to their inflation rates from the previous month, lower annual growth rates were observed in the indices of flour, bread, and other bakery products, pasta products, and other cereals, which decreased to 9.0% from 10.1%. Similarly, milk, other dairy products, and eggs dropped to 7.8% from 9.7%, sugar, confectionery, and desserts reduced to 13.2% from 21.4%, and ready-made food and other food products not elsewhere classified decreased to 7.3% from 7.8%.

The corn index registered an annual drop of -0.9% during the month, compared to a 5.8% annual increase in the previous month, while the index of oils and fats recorded a zero percent annual rate in August 2023, down from a 2.0% annual growth rate in July 2023.

As per State Of the Nation Adress of President Ferdinand “BONGBONG” Marcos Jr. said “Last year, we underscored the significant challenges we faced, alongside the rest of the world, in our efforts to recover from the pandemic and revitalize our economy. The most pressing issue we encountered was inflation,” stated the President.

Marcos outlined global factors contributing to inflation, such as the ongoing conflict in Ukraine and the lingering impact of the COVID-19 pandemic.

“One year ago today, I stood before you, outlining our comprehensive plans to bolster the economy, generate employment opportunities for our citizens, streamline business operations, adapt our educational system to the evolving economy, reduce and rationalize energy expenses, stimulate agricultural production, improve healthcare services, and sustain social programs for the disadvantaged and vulnerable,” he articulated in his opening remarks.

“Now, I would like to provide the public with an update on the achievements we can celebrate and the ongoing challenges we confront,” he added.