Disburse ‘ayuda’ before poll ban takes effect, solon urges
ALAWMAKER has appealed to government agencies in charge of “ayuda” (aid) to disburse most of the funds before the election spending ban that will come with the Barangay and Sk Elections in October this year.
Deputy Minority Leader Bernadette Herrera said releasing the funds in the 2023 national budget can cushion the impact of inflation not just for the poor and low income families, but also for the small businesses they work for and interact with
“The latest, newly-released inflation figures confirm what we feared a few months ago: that inflation for the whole year is much higher than the forecast for 2022 and that yearend inflation would be quite high. Annualized inflation shot up to 5.8 percent and December inflation rose to 8.1, according to the Philippine Statistics Authority,” she said in a statement during the weekend.
Herrera said this elevated inflation will erode the purchasing power of the entire 2023 budget.
“If inflation stays elevated above 7 percent monthly, that would mean the newly-enacted 2023 budget would lose about 7 percent of its purchasing power or by approximately P368 billion,” she added.
Citing the Bangko Sentral ng Pilipinas (BSP), the lawmaker said the central bank expects “upside risks continue to dominate the inflation outlook up to 2023 while remaining broadly balanced in 2024. The expected upside risks to inflation over the policy horizon stem mainly from elevated international food prices due to high fertilizer prices and supply chain constraints.
On the domestic front, the BSP trade restrictions, increased prices of fruits and vegetables due to weather disturbances, higher sugar prices, pending petitions for transport fare hikes, as well as potential wage adjustments in 2023 could push inflation upwards.
Cushion impact
MEANWHILE, the impact of a weaker-than-expected global economic recovery continues to be the primary downside risk to the outlook, the BSP added.
But Herrera said what the BSP intends to do is raise lending rates, which will mean higher credit card interest rates and business loan interest rates, and housing loan interest rates—all of which will affect low income and middle income families who comprise the midsection population demographic of our country of P109 million Filipinos.
“The 2023 budget has billions for ayuda and other forms of assistance for poor and low income families. Releasing these funds will cushion the impact of inflation not just for the poor and low income families, but also for the small businesses they work for and interact with,” she added.
Earlier, House Committee on Ways and Means Chairman Joey Sarte Salceda said he sees reason to be optimistic, although with some caution, that 2023 will see more acceptable inflation levels than 2022, as December 2022 inflation hit 8.1 percent, leading the annual average to hit 5.8 percent.
“Leading projections indicate a supply surplus starting Q1 [first quarter[ of 2023, as demand slows down and the US and other NONOPEC countries try to undercut the global cartel. [Also] the world seems to have already adapted partly to the Russia-ukraine conflict, with Europe being able to fill their reserves without Russian piped gas. So, oil and energy prices could stabilize,” he said.