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Rising prices amid national growth

Economic news was very much in public discussions last week. They came from two opposite directions – one very positive for the country as a whole vs. one so very negative for many people.

In its June, 2018, Global Economic Prospects report, the World Bank listed the Philippines among the fastest growing economies in East Asia. It said the country’s Gross Domestic Product (GDP) is expected to grow by 6.7 percent in 2018, after Cambodia’s 6.9 percent and Vietnam’s 6.8 percent – although behind India’s 7.3 percent.

These growth projections are higher than those for China, 6.5 percent; East Asia as a whole, 6.3 percent; and the world, 3.1 percent. “Growth in the Philippines and Vietnam remains robust, but capacity constraints limit further acceleration, especially in the Philippines,” the World Bank said. Capacity constraints that could hold back growth could be in inadequate infrastructure, manpower, and utilities.

In another report, the Philippines was said to have improved to become the fourth largest recipient of Foreign Direct Investments (FDI) – $10 billion – among the six largest economies in Southeast Asia. It is still well behind Singapore’s $63 billion, Indonesia’s $22 billion, and Vietnam’s $14 billion, according to the American Chamber of Commerce of the Philippines report, but we are now ahead of Thailand, $9 billion, and Malaysia, also $9 billion.

Against all these positive reports on the Philippine economy, however, last week’s media also carried reports of inflation – rising prices – blamed by some on the new Tax Reform for Acceleration and Inclusion (TRAIN) law, which took effect just as global fuel prices started to rise in the world market.

One official of the National Economic and Development Authority (NEDA) cited the effect of the high inflation rate on a sample budget of R50,000 for a family of five. Critics pounced on the statement, saying no family of five could live on R10,000 a month, and assailed the statement “for brazenly downplaying the harsh effects of the TRAIN law on the prices of goods and services.” They said the NEDA, the Department of Finance, and the Department of Budget and Management make all the projections and plans, but they are not the ones who experience the burden of high prices.

We are indeed in the middle of difficult economic times for many people, particularly the poorer sectors of the population, but we can take heart that the nation as a whole is on the right economic track as seen in the reports of the World Bank and the American Chamber of Commerce. We hope that the government officials concerned will be constantly on the watch and take needed action, so that the interests of common ordinary folk will be safeguarded in the overall drive for national economic growth.

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