WHILE the economy is not as vulnerable to shocks compared to 10 to 20 years ago, the government cannot resort to making reckless decisions to respond to shocks, according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Arsenio M. Balisacan recently told reporters that addressing shocks remains a priority for the government.
However, responding to these shocks does not mean raising spending and watching the budget deficit skyrocket. Balisacan said the government wants to “achieve more with less.”
“We keep in mind always what we have been calling the good fundamentals, the fundamentals of economic development, particularly for medium-term to long-term development,” Balisacan said.
“So you don’t act recklessly by, for example, unduly increasing your spending to the extent that the debt and the deficits will skyrocket. We [can’t] do that. So you have to find ways of addressing the issues,” he added.
Among these shocks is the recent decision of India to extend its rice export ban and the impact on oil prices should the conflict of Israel and Hamas escalate. Balisacan said the government is closely monitoring these developments. It is also working toward expediting projects such as the food stamp program in order to protect the most vulnerable Filipinos.
He added that efforts are under way to strengthen the government’s targeted subsidy programs. This means addressing leakages and other problems observed in earlier government programs.
“If there is a rise in food prices, then the best we can do is to ensure that the most vulnerable are protected, and we have to use the limited resources in ways that reach those people,” Balisacan said.
“[We have to] strengthen [these programs] so that we can achieve more with less. That’s the objective. Achieve more with less,” the Neda Chief added.
Earlier, local economists said Filipinos may not be able to see price increases slow next year, especially with the recent decision of India to extend its rice export ban to 2024.
Rice, the country’s food staple, could remain expensive next year given the ban on exports of the commodities. The ban imposed by India could increase the international prices of rice, at least by the middle of 2024.
Philippine Institute for Development Studies (PIDS) Senior Research Fellow Roehlano Briones said, however, that this is not considered a major shock since current prices have already incorporated this.
Monetary Board Member Bruce J. Tolentino noted that elections in India are within the April-May period in 2024. He expects that once the election blows over, the ban could be lifted, and international rice prices could ease.
Tolentino said, however, that the ban is not a total ban. He said the Government of India decided to honor its existing contracts. This includes government-to-government discussions that it has had with its partners.
Image credits: Roy Domingo