When the below-target gross domestic product (GDP) increase of 4.3 percent for the second quarter of the year was announced by the National Statistician in mid-August, the administration’s economic team reassured Congress leaders – at the presentation of the proposed 2024 national budget – that accelerated government spending through a well-executed catch-up plan would, among other upside factors, still bring about the attainment of the lower end of the forecasted  6.0 percent GDP growth.

Last week, the Philippine Statistics Authority (PSA) announced that overall inflation increased to 5.3 percent in August from 4.7 percent in July, coming off a six-month decline. This raised the national average inflation from January to August 2023 to 6.6 percent. The PSA explained the main drivers to the upward trend:

“The uptrend in the overall inflation in August 2023 was primarily influenced by the higher year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 8.1 percent during the month from 6.3 percent in the previous month. The annual growth of transport at 0.2 percent during the month, from an annual decline of -4.7 percent in July 2023, also contributed to the uptrend. In addition, the recreation, sport and culture index recorded an annual increase of 4.9 percent during the month from 4.7 percent in July 2023.”

These three categories make up 80 percent of overall inflation. The national statistician highlights: The acceleration of food inflation in August 2023 was mainly brought about by the higher year-on-year growth rate observed in rice at 8.7 percent from 4.2 percent in July 2023.

In a briefing last week, Finance Secretary Benjamin E. Diokno affirmed that the economic team supports the imposition by President Ferdinand R. Marcos, Jr. of price ceilings on rice – even as he disclosed that they were not consulted before the decision was announced. He echoed that the justification was the apparent misbehavior of certain market players engaged in hoarding and manipulation of prices of rice and basic commodities such as rice, onion, garlic and tomatoes.

Meantime, the PSA also announced that, compared to year-ago levels, total unemployment in the country decreased to 4.8 percent in July 2023 from 5.2 percent in the same month last year. But compared to April 2023, there was an increase in unemployment, from 4.5 percent to 4.8 percent.  Only 44.630 million were recorded as being employed in July 2023, compared to 48.842 million in June 2023. From February to June 2023, total employment had been steadily increasing at the 48 million mark.

The most recent month-on-month data shows a decrease of 2.212 million in the estimated number of employed persons in the agriculture sector from 23.8 million in June 2023 to 21.5 million in July 2023 – accounting for more than 54 percent of the decrease in employment.

These twin developments – increasing inflation and decreasing employment – bear closer watching. The government must ensure that the economy’s continuing recovery is sustained amid rising challenges that affect the well-being of millions of Filipinos still struggling to achieve sufficiency in basic means.