Inflation tamed by 2024, Marcos’ team vows

DAVOS, Switzerland —President Marcos sees the Philippines unlocking demographic dividends from its young workforce and supporting strong growth for the long haul as his economic team affirmed that the country’s inflation rate, currently at a 14-year high, could be tamed by next year.

“We are convinced that this year, the inflation will be around 4.5 percent, and by next year it will be within that 2 to 4 percent [target range]. We’re very confident,” Finance Secretary Benjamin Diokno said in a press briefing on the sidelines of the World Economic Forum (WEF) annual meeting on Wednesday.

He was referring to the range set by the inflation-targeting Bangko Sentral ng Pilipinas (BSP), an institution which Diokno used to head before he was picked by Mr. Marcos to lead the finance department last year.

As of December last year, the country’s annual inflation rate hit a 14-year high of 8.1 percent. This brought full-year inflation average to 5.8 percent, rising from 4.5 percent in 2021. Thus, consumer prices in the country have risen faster than the BSP’s targeted pace for two years and will remain so for a third year this 2023.

“It’s a very much transitory issue because it’s coming from the supply side, meaning there are certain factors that affected our production system in agriculture like the typhoons that damaged the crops, the Avian flu,” added Economic Planning Secretary Arsenio Balisacan in the same briefing.

“And so once we get those, I think that we are getting there, this inflation should no longer be a problem,” he said.

Recently, the Philippines was forced to import more onions to address the unprecedented spike in the prices of this basic cooking ingredient, which is now costlier than beef in the Philippines.

Last year, a shortfall in sugar also became the big issue while there was a big debate on whether to import more. Mr. Marcos has since then ordered that a two-month buffer stock for sugar be maintained to prevent price speculation. He has likewise vowed to run after smugglers and hoarders.

On his WEF debut as head of state, Mr. Marcos expressed high hopes for the country’s continued growth, banking on the country’s current demographic sweet spot, referring to the period when it has a vast pool of human resources in the working age.