November 16th, 2021
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that the economic managers’ growth target of 5 to 6 percent of real GDP for 2021 is “becoming increasingly attainable” as the country’s economy reopens and as economic prospects brighten.
“Second quarter GDP growth was 12 percent, immediately followed by a 7.1 percent growth in the third quarter. I am strongly convinced that, if nothing goes dramatically wrong in the final quarter, we will reach our annual growth targets for this year,” Salceda said.
Salceda cited declining aggregate COVID-19 numbers, accelerated vaccination, and adjustments in the workplace as signs that the economy is ready to rebound.
“Our worst fears of stagflation are probably over. We will not stagnate in 2022 and 2023, it looks like.
Fight inflation
Salceda cautioned however that “with a recovering economy, prices tend to go upward. That could be a problem, because employment and wage recovery tend to come much later than actual growth. So in the meantime, prices will bear down struggling families.”
Salceda says he is confident that the monetary policy tools to stave off inflation are there, but adds that supply issues might hamper the stabilization of prices.
“I am confident in Governor Diokno having the tools to manage matters on the monetary side, but there is little that monetary authorities can do if the problem is on the supply side.”
“That is why, I appeal to the Department of Agriculture, Department of Transportation, Department of Public Works and Highways, and the Department of Interior and Local Government to ensure that there is no congestion of ports, expressways, airports, and other conduit points for supply as demand begins to pick up.”
“I would even suggest a Task Force Supply Chain Management, along with the Department of Trade and Industry, to anticipate and prevent supply congestion. Additionally, do we have enough drivers to transport food and other goods, especially during the Christmas season? These are questions that a Task Force like that may be able to answer.”
The Bangko Sentral ng Pilipinas projects annual inflation to settle at 4.3% for 2021. Salceda, however, warns that December inflation could be “significantly above the annual average given the sudden pickup in demand that will unlikely be met by proportional adjustment in supply. Unless we do something, of course.”
“I suggest a five-point plan to ensure that inflation does not pick up in this final month. First, we must secure and decongest ports, airports, expressways, and other throughfares. Second, the DA must expand efforts to facilitate markets for farmers that are expected to harvest their products this month and prevent spoilage. Third, Customs must be ready to expedite the processing of papers for imports of food. Fourth, the DTI must ramp up consumer protection and price monitoring actions. Fifth, we must lower the price of input goods such as oil.”
“Congress is already working on the fuel excise tax suspension for six months. Thankfully, crude prices abroad are also starting to stabilize.”
“Recovery is starting to come. Inflation will be the next enemy.”