PHL risks: Low demand, high rates, inflation

economy a consumption-driven one; thus, one vulnerable to infl ation-induced pressure. Balisacan said efforts to keep prices low would be the key to keeping the economy afloat. “Tempering food and energy price increases is an urgent imperative to ensure the sustainability of consumption growth and, perhaps more importantly, protect the welfare of the poor and vulnerable whose consumption baskets are disproportionately constituted by food,” Balisacan said. e IAC, he explained, is tasked to monitor the drivers of infl ation, collect data on supply and demand conditions, and submit reports and timely recommendations to the President to ensure that the government addresses food and energy constraints.

However, Balisacan admitted that the careful balancing act of ensuring sufficient supply and a healthy demand for various products is difficult if there are many groups making opposing claims.

“ e infl ation we are seeing is largely domestic as opposed to the pandemic when that infl ation is largely imported amd we see that its not really the excess demand that is creating that push but the supply, the bottlenecks in the supply chain; that is one but there are also trade and policy issues,” he added.

Balisacan said this is the basis for creating the Inter-Agency Committee on Infl ation and Market Outlook (IAC-IMO). e committee’s creation was approved by the President last March 7 and it is expected to draft measures to keep food and energy infl ation at bay.

Balisacan said the committee’s member agencies are already preparing for the analytical work it will conduct to better guide policies moving forward.

“ e data is clear—infl ation from food and non-alcoholic beverages contributes nearly half to overall infl ation. Infl ation in these essentials, combined with infl ation in other items such as housing, water, electricity, gas, and other fuels and transport, contributes nearly 80 percent to overall infl ation,” Balisacan said. e Philippine Statistics Authority (PSA) said infl ation reached 8.6 percent in February 2023. Infl ation was at 8.7 percent in January and at 3 percent in February 2023. e PSA also said the poorest Filipinos experienced a 9.7-percent infl ation rate in February, higher than the infl ation seen by all Filipino households. is is the fourth consecutive month when infl ation for the Bottom 30 percent of households was above 9 percent.

Earlier, local economists said high commodity prices may continue despite the slowdown in infl ation in February 2023, according to local economists.

However, the month-on-month data showed the rise in infl ation was fl at since infl ation for the poorest households was also at 9.7 percent in January.

University of the Philippines School of Economics head of research Renato E. Reside Jr. told that core infl ation is the indicator to watch as it reached 7.8 percent in February. e PSA said this is the highest since March 1999 when it was at 8.1 percent. ately ban all POGO operations in the country with the end in view of upholding the safety of the Filipino people, and to sustain the path to growth and development consistent with the administration’s economic reforms.” e report further urged the Bureau of Internal Revenue (BIR) to collect the tax liabilities of Pagcor’s third-party auditor, POGO licensees, and their service providers which can be used to fi nance priority development projects of the government.

Core infl ation measures infl ation for commodities that are not volatile and excludes certain food and energy items, according to Reside. e movements also lag those in prices of energy and food.

In the same report, Gatchalian also urged Congress to pass legislation that would separate the functions of regulation from operation in Philippine Amusement and Gaming Corp.’s (Pagcor) charter.

He said a new entity should be created to perform solely regulatory functions, authorization, and licensing of games of chance and other forms of gambling, while Pagcor will continue solely as a gambling operator.

He also urged the Department of Labor and Employment (DOLE) to look for alternative employment placements for Filipino nationals employed by POGOs—estimated in the tens of thousands—taking into account their skills and capabilities with the possibility of being absorbed by other industries such as IT-BPOs and manufacturing through proper coordination.

Last week, Pagcor, citing fraud and other criminal wrongdoing, fi red its third-party auditor after a review that began in September when the new management took over and assessed the contract it inherited from its predecessor.

Meanwhile, Gatchalian also directed the Bureau of Immigration (BI) to cancel and revoke the working visas issued to POGO foreign nationals employed in the POGO industry and implement the deportation of said foreign nationals following immigration rules and regulations.

“Kung susumahin ang lahat ng mga ebidensya at datos na isiniwalat na kaugnay sa operasyon ng POGO, lumalabas na puro perwisyo lamang at walang pakinabang sa bansa ang mga POGO. Panahon na para buwagin ito. [If we put together all the evidence an data that were exposed on POGO operations, it is clear that POGOs have brought us mostly problems and no benefits. It is time to dismantle these],” he concluded.