If one would ask what most of the Filipinos’ primary economic concern in 2022 was, it would most probably be “inflation.”
The Philippine Statistics Authority reported an 8.1-percent inflation rate in December 2022, the highest since November 2008. This rate was driven primarily by the increase in the prices of food and non-alcoholic beverages.
If there is anything people would want to happen now, it would be for prices to go down and the economy to improve.
To determine the country’s economic prospects for 2023, let us look at the variables that impact the economy.
For the givens, we have a new national administration in place that I believe has all the intentions of making the economy grow. There is a good economic team. The Philippine Development Plan 2023-2028 has been released. It is supposed to be “a plan for deep economic and social transformation to reinvigorate jobs creation and accelerate poverty reduction by steering the economy back on a high-growth path.”
Despite the problems in the global economy, OFW remittances grew last year and are forecast to continue to grow in 2023.
This growth must be inclusive, building an environment that provides equal opportunities to all Filipinos, and equipping them with skills to participate fully in an innovative and globally competitive economy.”
We also have several major private sector initiatives underway that should create jobs, make life easier for Filipinos, and contribute significantly to our economic growth.
Despite the problems in the global economy, OFW remittances grew last year and are forecast to continue to grow in 2023.
For the variables not within our control, there are the effects of the Russian invasion of Ukraine that directly or indirectly impact the Philippine economy. Despite the belief of many that the worst of the Covid crisis is over, there is no real certainty about this. There is growing concern about the rise of Covid cases in China and how this may affect us.
Given the facts, the controllable and uncontrollable variables, we forecast that inflation will unfortunately still be a problem in 2023. Though we have no questions about the plans and good intentions of those in the highest echelons of government for the economy, it is the implementation of these plans that is the real challenge.
The private sector initiatives, whether they be from large corporations or micro, small and medium-sized enterprises, will definitely boost the economy. However, the government must give its full support by ensuring that the two major problems of the private sector in dealing with the government — corruption and red tape— will be effectively curtailed.
For the uncontrollable variables — the Russian invasion of Ukraine and its effects, the threat of a resurgence of Covid in the country — these are matters where government must take the lead. It should look at all scenarios, be proactive in preventing crises, and take the necessary steps to advance not only the economy but all other interests of the country.
The country has many things going for it this year that should help boost the economy. But it also faces real threats and challenges. How the economy will perform, as in any business, will be dependent on its management. In the case of the national economy, it is my belief that its performance will be heavily dependent on how the government will implement its economic plans and how it will assist the business sector in its undertakings.
It is good public governance that will be the primary driver for a good economy in 2023.