By Kyle Aristophere T. Atienza, Reporter
SPIRALING prices were the top concern of most Filipinos in the last month of a year that saw inflation hit a 14-year high due to surging food costs, according to a poll released by Octa Research on Monday amid expectations of elevated costs of transport and electricity.
The survey of 1,200 adult Filipinos from Dec. 10-14 also showed that the push to amend the country’s 36-year-old Charter does not have popular support.
In the poll, 73% of Filipinos said the government should focus on controlling the increase in the prices of basic goods and services.
Runaway inflation forced global central banks to drive up interest rates to the fastest in decades last year, with the Philippines’ rate hitting a peak of 8.7% year on year in the first month of 2023.
Headline inflation last month declined to 3.9%, but the full-year average for 2023 hit 6.0%, breaching the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% target.
Top concern over inflation was seen in the southern Philippine region of Mindanao, where 82% of adult Filipinos said inflation was the most pressing issue, surpassing all other major regions.
Higher prices have significantly eroded the purchasing power of households and businesses, Michael M. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Facebook Messenger chat.
He cited the continuing impacts of Russia’s invasion of Ukraine, which started nearly two years ago, on the global prices of oil and other basic commodities.
“Higher prices/inflation had the greatest adverse effect on the poorest of the poor or those with limited budgets,” Mr. Ricafort said.
“The problem is that government has no response to addressing inflation other than to decrease aggregate demand,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said via Messenger chat.
Heavily relying on rate hikes decreases inflation “at the expense of higher growth and jobs.”
“At the bottom of all of these difficulties is a decline in human capital investments which can only come from fiscal consolidation,” he added.
Food inflation stood at 10.0% in December, with rice driving the increase as the commodity’s prices increased by 17.9%, the fastest since it hit 22.9% in March 2009.
The fact that the concern for inflation persists “raises a question on the leadership of the incumbent administration and their capacity to listen to and solve pressing problems of the nation given that we are approaching the middle of the term,” Kabataan Party-list Rep. Raoul Danniel Manuel said in a statement.
“For multiple surveys now, high prices and fees remain to be among the most urgent concern of Filipinos,” he said.
President Ferdinand R. Marcos, Jr. earlier this month said his administration will pursue non-monetary measures including plugging supply gaps to stabilize prices this year.
Economists have also cited the impact of El Niño on food and utilities, higher global oil prices, potential increases in transport fares as key risks to the inflation outlook this year.
Mr. Marcos said the El Niño weather pattern, which will likely extend up to the second half of this year, and geopolitical risks could “trample” the optimistic growth outlook for the Philippines, which grew by 5.9% in the third quarter last year.
“Abroad, escalating geopolitical tensions could dampen global trade, tighten global financing, as well as trigger fuel and food shocks that could tow inflation back up,” he said after appointing a new Finance chief, who has been ordered to work with other officials in devising strategies that will tame inflation.
In the Octa survey, controlling inflation was followed by the need to boost people’s access to affordable food (45%), create more jobs (36%), increase wages (34%), and reduce poverty (32%).
There were 1.83 million jobless Filipinos in November last year, down from 2.09 million a month earlier and 2.18 million in November 2022, according to government data.
The Philippines’ poverty rate stood at 22.4% in the first half of 2023, lower than the 23.7% from a year earlier. This was equivalent to a poor population of 25.242 million.
But it was still above pre-pandemic levels “after a year and a half of the economy reopening and despite growth hyped as among the fastest in Asia, Ibon Foundation Executive Director Sonny A. Africa had said.
The government is hoping to bring the poverty rate to single-digit levels by 2028.
Ibon has been citing the need to boost the quality of local jobs by boosting the country’s manufacturing base and agriculture sector.
The need to reduce poverty was followed by the need to enforce the law on all (7%), and reduce the amount of taxes (6%). These were followed by the need to protect overseas Filipino workers, prepare to counter terrorist threats, and stop the abuse of the environment with 4% each.
‘CHA-CHA’ NOT A MAJOR CONCERN
In the OCTA survey, amending the 1987 Constitution was not seen as a major concern, with only 1% of adult Filipinos believing Charter change (Cha-cha) was an urgent issue.
Mr. Marcos’ allies in Congress are again pushing for cha-cha, which is typically revived by lawmakers every year, with Senate President Juan Miguel F. Zubiri proposing amendments to Articles 12, 14 and 16 of the Constitution.
All the while, a people’s initiative pushing for “Cha-cha” has been tainted with vote-buying allegations, and lawmakers have already filed resolutions seeking an inquiry.
“With numerous reports from the ground of manipulative campaigning where ayuda, money, false promises and threats are used to garner signatures, this survey is damning evidence that there is no real public clamor behind the petition drive for cha-cha,” Mr. Manuel, the party-list lawmaker, said.
“This is indeed a politician’s initiative, not of the people.”
Mr. Marcos last month said efforts were underway to revisit the economic provisions of the 1987 Constitution and domestic laws as his administration seeks to make the country “an investment-friendly place.”
Bernardo M. Villegas, one of the framers of the 1987 Constitution and professor emeritus at University of Asia and the Pacific, earlier told BusinessWorld that “Cha-cha” is no longer necessary to attract foreign direct investments since the country already revised its Commonwealth-era Public Service Act (PSA) to allow full foreign ownership in key domestic sectors.
Mr. Villegas, who had supported moves to amend the Constitution before the passage of the amended PSA, noted that the remaining sectors not allowed for full foreign ownership such as education, media and advertising, are “not vital to high economic growth today.”
The Philippines continues to limit land ownership to Filipino citizens and corporations that are at least 60% Filipino-owned as enshrined in the Constitution.
But Mr. Villegas said foreign investors who are considering large-scale agribusiness investments “do not need to own land.”
“They can lease the land long term as in the nucleus estate model of palm oil in Malaysia and Indonesia.”
In Congress, Albay Rep. Jose Ma. Clemente S. Salceda said Charter change would help address the Philippines’ food security problem.
“The key to boosting food production and reducing food prices in the Philippines is investment in agriculture. The flow of capital to the agriculture sector has been tightly strangled by restrictions in the Constitution and the resulting restrictions in our laws,” he said in a statement in reaction to the Octa poll.
“These restrictions cover ownership, lease, transfer, and even foreign management – leaving foreign investors very little room for involvement in local agriculture,” Mr. Salceda, who also heads the House Ways and Means Committee, added. — with a report from Beatriz Marie D. Cruz
