As inflation slid to its lowest level in four years, the Philippines' chief economist is looking forward to more Filipinos lifted out of poverty.
"With inflation dropping from its high levels last year and early this year, together with the continuing robust labor market, we expect poverty to fall,” National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan told Manila Bulletin on Friday, Oct. 4.
Balisacan said that with this inflation slowdown, people will feel more confident about spending more, which can help businesses grow and expand.
This is Balisacan's sentiment after the Philippine Statistics Authority (PSA) reported the country's consumer price growth fell further to 1.9 percent in September, the slowest since May 2020's 1.6 percent rate.
National Statistician and PSA Undersecretary Claire Dennis S. Mapa said prices for all goods went up more slowly in September, down from 3.3 percent recorded in August this year.
"High consumer prices reduce household incomes' purchasing power," Balisacan noted in a text message.
As such, the state planning agency NEDA believes that this inflation downtrend will give some financial relief to poor Filipino families.
According to the PSA, the slowdown in September inflation was driven by slower price increases in food and non-alcoholic beverages, a huge decrease in transport costs, and a reduced inflation rate for housing and utilities.
"Easing food prices will relieve low-income households, enabling them to allocate more to other essential needs such as education and health," Balisacan said in a statement, stressing further that the government "will sustain the momentum as we assure the public that we will continue to pursue and carry out strategies to maintain stable prices of food and other commodities."
When it comes to the poorest FIlipino households, the inflation rate decreased to 2.5 percent in September from 4.7 percent in August.
Although this is the lowest inflation rate for the bottom 30-percent income households since May 2020, they still spent more on the prices of goods compared to the higher-income groups.
The poor continue to feel the strain, spending more on everyday goods than the rest of the population. The burden of rising prices, although slower, weighs heavily on their pockets.
With the government's confidence in the reduction of poverty, Balisacan noted that the impact on poverty levels will not be confirmed until the next poverty data is available in 2025, following the release of the PSA's Family Income and Expenditures Survey (FIES)
Latest data from the PSA showed a drop in the country's poverty incidence to 10.9 percent in 2023, down from 13.2 percent in 2022 — aligning with the government's goal to reduce poverty to single digits by 2028.
Also in 2023, around 15.5 percent of the population, or 17.54 million people, were classified as poor, meaning their incomes were insufficient to meet basic food and non-food needs. (Derco Rosal)