Attaining economic stability ranks high in the nation’s concerns when the new administration assumes office after the mid-2022 elections. The lingering effects of the coronavirus pandemic continue to cast a huge shadow of uncertainty. Just as the country is steadily treading the path to Alert Level 1, the potential dangers posed by the Omicron variant need to be considered to ensure the people’s health and safety.
Finance Secretary Carlos Dominguez III has called attention to four primary concerns that would likely preoccupy the next administration: government debt, higher consumer prices, income inequalities, and climate change.
Climate change adaptation and mitigation are continuing risks for the country whose vulnerability to strong typhoons is magnified by unabated global warming. Steady strides already made in terms of fortifying the country’s disaster risk reduction and management capabilities need to be advanced further.
Income inequalities pose the most difficult challenge. Involuntary hunger rose significantly, especially during the periods of restrictive lockdowns that also triggered the biggest job losses. Recall the mushrooming of community pantries nationwide in April this year after the first one set up in Quezon City. Hundreds lined up to get their share of rice, milk, vegetables and other staple food items voluntarily contributed by anonymous individuals and families.
Ayuda became a byword; direct cash assistance was mandated by the Bayanihan laws and extended, too, by local government units that could afford to do so.
When pressed to extend more stimulus packages, the government’s economic managers leaned toward ensuring the country’s “fiscal stamina.” Rather than focus on further stimulus programs to address the sluggish economy, Dominguez declared then that the government will stay the course and resume its aggressive Build Build Build program that is its “main strategy to help Filipinos lift themselves from poverty.”
Nevertheless, deficit spending levels increased. Outstanding government debt ballooned from P8.2 trillion in 2019 to P10.2 trillion in 2020 as the state ran big deficits to battle the pandemic. Through the first three quarters of 2021, government debt has increased again to P11.9 trillion.
The proposed P5.024-trillion 2022 national budget shows that outstanding debt next year will further rise from the P11.73 trillion programmed by the end of 2021 to a record P13.42 trillion despite lower gross borrowing in line with the narrower budget deficit program.
Higher level of confidence in managing debt levels underlines the parameters of the government’s 2022 budget that the new administration would have to live with during its first six months in office. The country’s economic managers seek to maintain the country’s hard-earned investment grade credit ratings to ensure long-term stability.
Taming inflation is the fourth imperative. Both the National Economic and Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP) have downplayed the likelihood that election spending could bring on higher consumer prices. The latter’s track record in reining in inflation despite major pandemic-related challenges provides a reasonable measure of assurance.
As Filipinos ponder on their choice of the next President, they would do well to consider the candidates’ capability for managing the economy such that sufficient food on their tables is assured without need for lining up for ayuda from well-meaning community benefactors.