Marcos confident Philippines can avoid recession despite high inflation

In a video address to the Philippine people, President Ferdinand Marcos Jr. expressed confidence that the nation would avoid a recession because, he said, his administration was prioritizing job creation despite the inflation rate climbing to 8 percent last month.

Marcos said the government was looking for ways to cushion the impact of rising prices on ordinary Filipinos, adding an increase in the workforce has offset the inflation rate. 

“Somehow, we are confident that we will not have a recession here in the Philippines because the unemployment rate is very low,” Marcos said in the message he delivered late Thursday. The transcript in Tagalog was released Friday. 

The president noted that the country’s unemployment rate had dropped to 4.5 percent in October, compared to 7.4 percent the previous year.

“If you remember, at the start of my administration we were talking of prioritizing job creation. That is what is happening. We will continue with that,” he said.

On Tuesday, the Philippine Statistics Authority reported that the 8 percent inflation rate in November had increased from the previous month’s 7.7 percent. 

The latest figure has forced the government to revise its yearly inflation target to 5.8 percent, from the previous assumption of 4.5 percent to 5.5 percent. 

Devastating typhoons and rising prices for farm inputs led to higher prices for vegetables, fruits and rice – the country’s food staples – officials said. In addition, sugar production was hit hard by recent bad weather. 

The president gave his speech days after Marcos family members and supporters in the House proposed creating a sovereign wealth fund by tapping money from state pension funds. Widespread criticism forced the president’s allies to amend the proposal and seek other sources of funding. 

Positive outlook 

Earlier this week, the socioeconomic planning secretary said the government would continue helping millions of Filipinos to make ends meet.

“The government is continuously implementing targeted subsidies and discounts to allay the impact of the higher prices of essential goods, especially for the vulnerable sectors and low-income earners of our society,” Arsenio M. Balisacan said. 

“To ease price pressures, we continue to implement measures to boost food production and reduce the cost of bringing farm produce to the market,” he said.

Balisacan said about 5.2 billion pesos (U.S. $93.9 million) had been allotted for disbursement to nearly 10 million people directly affected by rising commodity prices. 

“We need to provide assistance, particularly to vulnerable groups, especially in times of high inflation,” Balisacan said. 

Meanwhile, the president of the Employers Confederation of the Philippines told a state television audience that inflation could be managed.

“Well, I will not say that the inflation is out of control. It is high, but still manageable,” Sergio Ortiz-Luis Jr. said. “Our economy is on a continued growth track.”

Previously, the Philippine economy grew by 5.6 percent in 2021 after a COVID-induced recession saw it fall by 9.6 percent the previous year.

In April, the Manila-based Asian Development Bank (ADB) forecast national economic growth at 6 percent for 2022 and by 6.3 percent next year. 

Jojo Riñoza and Luis Liwanag in Manila contributed to this report.