Staying the course amidst headwinds
THE Philippines faces a daunting economic landscape in 2024, with higher-for-longer US interest rates, stubbornly high inflation, and the risk of spiking oil prices due to geopolitical turmoil. These challenges threaten to undermine the country’s growth trajectory, which international observers still project to be among the fastest in Asia this year. Socioeconomic Planning Secretary Arsenio M. Balisacan says that despite these concerns, international observers remain optimistic about the country’s economic performance. (Read the Businessmirror report: “Government keeping growth goals despite risks,” April 24, 2024).
The chief economist rightly notes that the major development institutions—the IMF, ADB, and World Bank—all forecast the Philippines to achieve growth of around 6 percent or better in 2024 and 2025. This would cement the country’s status as a regional outperformer, even if the pace slows from the administration’s initial targets
Balisacan’s pragmatism is commendable. He acknowledges the Bangko Sentral’s hawkish monetary policy stance as a given, recognizing that cooling inflation remains the priority. And he is realistic that only a “very drastic” global shock, such as a major Middle East conflict, could derail the positive outlook.
The government’s resolve must be applauded. Faced with daunting external headwinds, it is choosing to stay the course rather than capitulate to pessimism. This steadfast approach is crucial, as the country’s sustained economic momentum is essential for lifting millions out of poverty.
To be sure, the headwinds are formidable. Geopolitical tensions threaten to drive oil and food prices skyward, undoing hard-won gains against inflation. And the BSP’S battle to tame price pressures may constrain growth, even as the economy’s fundamentals remain solid.
Yet, the administration’s economic team appears undaunted. They are banking on factors like the waning of the El Niño weather pattern to ease food price pressures, and are closely monitoring the situation in the Middle East. Their unwavering commitment to the growth agenda, despite the challenges, deserves recognition.
The success of the government’s economic agenda hinges on its ability to navigate these turbulent waters. It must remain flexible and adaptable, while also ensuring that the benefits of economic growth are shared equitably among all Filipinos.
The country’s economic expansion should not only focus on numbers but also prioritize equitable growth that benefits all segments of society, especially the poor. As millions of Filipinos hope for inclusive economic progress, the government must remain committed to implementing effective measures and policies that address these challenges. This will require a concerted effort to address the needs of the most vulnerable populations, invest in infrastructure and education, and promote a more inclusive and sustainable development model.
Ultimately, the country’s economic resilience will be tested in the coming year, and the road ahead will be challenging. With the right policies and measures in place, the Philippines can continue to be one of the fastest-growing economies in Asia.
As the country marches towards its ambitious growth targets, it would do well for the government to ensure that the benefits of economic expansion reach the most vulnerable segments of society. By prioritizing inclusive development and addressing the concerns of the poor and marginalized, the Marcos administration can cement its legacy as a champion of progress and social justice.