Marcos says inflation is still Philippines’ ‘greatest problem’

Philippine President Ferdinand R. Marcos, Jr. on Wednesday said inflation remains a major concern for his government.

“It remains unfortunately our greatest problem that is brought by forces that we cannot control,” Mr. Marcos said at an annual Independence Day reception for diplomats at the Presidential Palace.

Headline inflation hit a six-month high of 3.9% in May amid rising utility and transport costs alongside increasing food prices. It was higher than April’s 3.8% but slower than 6.1% in the same month last year.

This brought the five-month average inflation to 3.5%, within the Bangko Sentral ng Pilipinas’ 2-4% target range.

“Despite the woes brought about by global inflation, the Philippines has still managed to curb inflation to a reasonable, almost manageable level,” Mr. Marcos said.

The Philippines is still reeling from the El Niño weather phenomenon, which has caused PHP 9.89 billion in agricultural losses as of this week.

Inflation remained manageable due to the combined effects of the fiscal and monetary policies,” said John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc. 

“Prudence in policy making also helped in tempering a threat to macroeconomic stability,” he said in a Facebook Messenger chat.

The Monetary Board has kept the policy rate steady at a 17-year high of 6.5% since October 2023 to tame inflation.

Mr. Marcos also on Wednesday emphasized the Philippines has continued to enjoy a “favorable” credit rating.

“We are credited with a ‘stable’ outlook, which signals growth momentum in the medium term,” he said, hoping that it would translate to more accessible financing for government programs.

Fitch Ratings has kept the Philippines’ “BBB” credit rating with a “stable” outlook. A “BBB” rating indicates low default risk and reflects the economy’s adequate capacity to pay debt. Meanwhile, a “stable” outlook means it is likely to be maintained rather than lowered or upgraded over the next 18-24 months.

“So, we will maintain that status and we will try to improve that and across all major regional and international debt [rating] agencies,” Mr. Marcos said.

The government is targeting to achieve an “A” level rating by 2028 or the end of the Marcos administration. — Kyle Aristophere T. Atienza