Inflation, typhoon devastation only temporary setbacks: Pernia

MANILA -- The inflation surge coupled with typhoon devastation are only temporary setbacks for the Philippine economy and its poverty reduction program, Socioeconomic Planning Secretary Ernesto Pernia said Tuesday.

In a press conference during the Philippine Economic Briefing, Pernia said the government has set immediate and short-term measures to resolve price pressures, also being exacerbated by the recent weather disturbances

“Inflation, of course, and also the destruction brought by typhoons are going to be temporary or transient gust of winds that will slow the progress in poverty reduction. But these are temporary,” said Pernia, who is also the director general of National Economic and Development Authority.

He noted that the country is “better than on track” in its goal of becoming an upper-middle income economy, as the Philippines will achieve this income level by next year.

By the World Bank’s definition, upper-middle income economies have gross national income (GNI) per capita between US$3,896 and $12,055.

“We are just below the $3,900,” Pernia said.

“By 2019, even we grow only at 4.4 percent per capita instead of 4.9 percent, which has been the case in the past several years, it will hit over $4,000 per capita by 2019.”

The economic manager added that the Philippine economy continues to increase with growth trajectory on “sharp upward direction”.

He mentioned that the economy now has broader growth base, not just driven by consumption, but also supported by investments and industry. “The administration still has close to four years to go, and still there’s a lot of time for the small setbacks brought by temporary gust of headwinds,” Pernia said.

Inflation rate in August reached 6.4 percent, its highest for nearly a decade. Government data showed that price pressures in the past months were mainly caused by rising prices of food, particularly rice, fish, vegetables, and meat.

Inflation, of course, and also the destruction brought by typhoons are going to be temporary or transient gust of winds that will slow the progress in poverty reduction. But these are temporary.

Socioeconomic Planning Secretary ERNESTO PERNIA