Economists’ warning: Inflation could outpace growth
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NFLATION could outpace economic growth this year, especially if no steps are taken to mitigate supply side constraints, according to local economists. In a presentation at the ADR Stratbase Economic Outlook for 2023 virtual forum on Thursday, Ateneo de Manila University Department of Economics Chairperson Alvin P. Ang said inflation could remain elevated at above 7 percent this year if supply side issues are left unchecked. Ang added that these efforts to address supply side issues should be trained on the agriculture sector. At business as usual, doubling
the growth of the agriculture sector would take 66 years or 11 administrations. “Interest rates are not really used to fight inflation basically because our inflation is supply driven. So it’s really more of an executive function rather than the monetary working on it. It’s complimentary, but it’s more a local domestic challenge of supply,” Ang said in his presentation. In the same forum, Managing Director of eManagement for Business and Marketing Services, Jonathan Ravelas said he is concerned that the inflation expectations of Ang had basis, given that developments
also lead him to believe that the risks point to his worst-case scenario. Ravelas said his inflation scenario has a base case of 5.3 percent. The best-case scenario is for inflation to cool to 4.5 percent this year while the worst-case scenario could be 5.6 percent. However, just like Ang, Ravelas has not adjusted his inflation forecasts to take into consideration the 8.7 percent posted in January. He said it was still too early to adjust. Nonetheless, Ravelas told BusinessMirror in a phone interview that inflation would also be affected by what is happening in the jobs sector.
What could happen is what is called the Phillips Cur ve. This was created by New Zealand-born economist Bill Phillips in the 1950s and illustrated an inverse relationship between inflation and unemployment. This meant that when inflation is high, unemployment is low and when inflation is low, unemployment is high. This assumes that when more people are employed, there is greater demand for goods, thus, higher prices; and when few are employed, demand is dampened and prices remain low. See “Economists,” A2
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PHL FACTORY OUTPUT SLOWS TO 15.2% IN ‘22 www.businessmirror.com.ph
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Friday, February 10, 2023 Vol. 18 No. 118
By Cai U. Ordinario
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Mom-and-pop stores create jobs, but offer little wages
@caiordinario
HE country’s manufacturing output slowed to 15.2 percent in 2022 as bumps in the recovery from the pandemic put the brakes on expansion, according to the latest Production Index and Net Sales Index of the Philippine Statistics Authority (PSA).
PSA data showed the Volume of Production Index (VoPI) was slower than the 52.6-percent growth— numbers attributed to base effects —posted in 2021. In December, the VoPI posted a growth of 4.8 percent, the 6th highest for the whole year of 2022, PSA told the BusinessMirror. The lowest VoPI was recorded in April 2022, a contraction of 1 percent. “The continued growth in manufacturing, though slower year-onyear amid some normalization of denominator/base effects, may be largely attributed to the further reopening of the economy towards greater normalcy,” Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort said.
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President Ferdinand Marcos Jr. and his wife Louise Araneta-Marcos meet Japan’s Emperor Naruhito and Empress Masako at the Imperial Palace in Tokyo, Thursday, February 9, 2023, shortly after meeting with Japanese Prime Minister Fumio Kishida at the prime minister's official residence in Tokyo. Marcos is visiting Japan soon after he and US Secretary of Defense Lloyd Austin reached agreements on allowing the United States greater access to Philippine military bases to keep in check China’s territorial ambitions. Stories from Marcos’s Tokyo visit on pages A1, A2, A16. Imperial Household Agency of Japan via AP
OM-AND-POP stores in communities nationwide are the ones creating new job opportunities for Filipinos after the pandemic, but the wages and salaries they offer may not be enough for their daily needs, according to an economist. In a presentation at the ADR Stratbase Economic Outlook for 2023 virtual forum on Thursday, Ateneo de Manila University Department of Economics Chairperson Alvin P. Ang said these community businesses are all under “Other Services.” These community services include neighborhood parlors and barber shops, laundry services, funeral services, household repair services, and computer and mobile phone repair services, among others.
“People services like barber shops, laundry services, even funeral services, repairs of goods and computer equipment, among others. So this is really community-based job opportunities that are being generated. But the question is, they may not be quality jobs. Are the wages high enough to sustain increased economic growth?” Ang said. Citing data from the Philippine Statistics Authority (PSA), Ang said these establishments created some 148,000 jobs between December 2021 and March 2022; and another 148,000 jobs in March to June 2022. More than half or 59.3 percent of these jobs are composed of personal services for wellness, See “Mom-and-pop,” A2
JAPANESE FIRM DANGLES ‘STABLE LNG’ By Samuel P. Medenilla
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JAPANESE power generation company has committed to provide the country a “stable” supply of liquefied natural gas (LNG) to help it transition from using fossil fuels to renewable energy. JERA Co. Inc. president Satoshi Onoda gave the assurance during his meeting with President Ferdinand R. Marcos Jr. on Thursday in Tokyo, Japan. “I may have mentioned this back in June as well, however,
we are procuring more than 30 million tons of LNG per year. Therefore, we will be able to contribute to the Philippines in the supply of LNG as transition fuel,” Satoshi said. JERA is also currently coordinating with Aboitiz group to develop the LNG technology from using ammonia to “green” hydrogen instead. “We will be working on co-firing ammonia technology as well. Therefore, we would like to be able to provide this technology as well in a timely manner. We would like to utilize the various technologies in order to contrib-
ute to the economic growth as well as decarbonization in the Philippines,” Satoshi said. Marcos welcomed the development, which will help the country reduce dependence on coal and oil for power production. “I suppose now they really have been discussing the interim—what we are doing in the interim until renewables can take the whole—can be able to provide rather the entire demand of the Philippines and beyond,” Marcos said. See “Japanese,” A2
See “PHL,” A2
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