Press Briefing

Press Briefing of Office of the Press Secretary OIC-Usec. Cheloy Garafil with NEDA Secretary Arsenio Balisacan

Event Press Briefing
Location Press Briefing Room, New Executive Building, Malacañang

OIC-USEC. GARAFIL: Good morning, everyone. Gusto ko lang i-announce today that the President has already signed the proclamation declaring October 31 as a special non-working holiday para na rin po mas marami po tayong time kasama ang ating pamilya at para ma-promote na rin po ang ating local tourism.

So ang susunod po natin na makakaharap today, I’m glad that we are joined today by NEDA Secretary Arsenio Balisacan to make some announcements – Sir?

NEDA SEC. BALISACAN: Thank you. OPS OIC-Secretary Cheloy Garafil, members of the Malacañang Press Corps, ladies and gentlemen, good morning.

To better appreciate where the Philippine economy stands, please allow me to explain the recent developments in the global economy.

Essential commodities and inputs for food value chains are experiencing substantial supply constraints. First, the cessation of the Russia-Ukraine conflict remains uncertain. Second, natural calamities have dampened agricultural production in many countries, including the Philippines. As a result, inflation has remained persistently high globally, driven by rapid price increases in food, transportation, and energy. The Philippines and our Asian neighbors are not spared from these trends – major economies in the ASEAN, such as Thailand, Singapore, Indonesia, and Malaysia, have seen their inflation rates accelerate in the past year.

The United States has also been trying to rein in inflation at a 40-year high. The country’s Federal Reserve has engaged in aggressive monetary tightening, and it appears ready to continue to do so even at the expense of a recession. It has raised interest rates to slow down spending and demand for goods and services to reduce inflationary pressures.

These developments have given rise to predictions of slowdowns or possible recessions in major developed economies and trading partners such as the United States, members of the European Union, and China. Recessions in our major trading partners entail weaker external demand (exports, investment, and tourism). Meanwhile, global supply disruptions have made our imports, including essential inputs for food production, more expensive, contributing to widening trade deficits.

As a small, open economy, the Philippines cannot escape the effects of these global headwinds. The Marcos Administration is indeed mindful of these challenges. We are particularly concerned about higher inflation. Our analysis shows that sustained increases in inflation in 2022 and 2023 will cause a slowdown in our economic growth, translating into a GDP level lower by 0.6 percent in 2023 than its expected level had there been no sustained inflation shock. While we expect our poverty situation to improve as we continue our recovery, inflation and rising interest rate will mute this improvement.

However, we expect the rise in inflation to be temporary, as it is expected to slow down and return to the medium-term target of 2% to 4%. We maintain that the country’s economic prospects remain bright as we get our priorities straight and our acts right. This outlook is borne out by the World Bank’s recently released October forecast for 2022 and 2023: it expects the Philippines to grow by 6.5% in 2022, second only to Vietnam among major ASEAN economies, and by 5.8% in 2023 – again faster than Indonesia, Malaysia, and Thailand. Similarly, ADB and ASEAN+3 Macroeconomic Research Office (AMRO) project Philippine economic growth to remain robust in 2022 and 2023, with the economy expected to grow by 6.5% to 6.9% in 2022 and 6.3% in 2023. Our employment statistics are also encouraging: the unemployment rate has fallen to 5.3% in August 2022 from 8.1% in August 2021, while the labor force participation rate rose to 66.1% from 63.6% – an indication that the reopening of the economy is having its intended effects.

The Marcos administration assures the Filipino people of its vigilance and steadfast commitment to monitoring and managing these risks. Through the Medium-Term Fiscal Program and Philippine Development Plan or PDP framed by the 8-Point Socioeconomic Agenda, we have developed a program of interventions, including critical policy and legislative priorities, to address the economy’s short-term and medium-term issues – in the next six years. The PDP’s targeted completion before the end of the year assures us that we will have a robust roadmap for navigating short-term challenges and uncertainties. At the same time, we are laying the groundwork for faster, more inclusive growth that generates high-quality employment to reduce poverty rapidly.

The plan shall include measures to strengthen the economy’s foundation for more and higher-quality job creation by addressing the most binding constraints to business investment and expansion in growth drivers such as manufacturing and agriculture, tourism, IT-BPOs, construction, and the creative industries. In particular, the PDP contains strategic actions to quickly address constraints in our food, energy, and transportation systems. These actions will mitigate inflationary pressures, protect the poor and most vulnerable in society through targeted assistance, and manage the socioeconomic scarring, especially for students and MSMEs, to hasten our recovery.

We believe we are on the right track with the right plans and policies. With your trust and our government’s greater sense of urgency, we are confident that we can weather today’s economic challenges.

Thank you, and I look forward to answering your questions.

IVAN MAYRINA/GMA7: Secretary, good morning. Puwede hong malaman kung ano iyong pinag-usapan ng economic team ngayong umaga with President Marcos?

NEDA SEC. BALISACAN: This morning?

IVAN MAYRINA/GMA7: Yeah. I understand you had a meeting with—

NEDA SEC. BALISACAN: Yes, we did and we tackled the short term challenges that we have discussed and this pertain to the current inflation, the exchange rate and interest rates and what we need to do to assure our people that we are on track and we are not detracted by these developments in achieving our short-term and medium-term goals.

IVAN MAYRINA/GMA7: [Off mic] …Secretary. Mayroon po bang napag-usapang options kasi in the last two weeks, halos sampung piso po ang tinaas, halimbawa, sa presyo ng kada litro ng diesel. I understand that transport sectors are asking for some sort of reprieve – fuel subsidy or the calls for suspension of excise tax or VAT on petroleum products. Are these on the table, sir? I mean are these options that we are considering at this time?

NEDA SEC. BALISACAN: Of course we are looking at the short-term issues, the continuing inflation and ensuring that as we address these short-term issues, we are mindful that we’ll not abandon the medium-term goals ‘no and we will make sure that we are on track toward economic recovery. So, yes, the intention is to address this particularly providing assistance to the most vulnerable and poverty groups by continuing the subsidy programs, for example, that are currently extended by DSWD – our cash subsidy programs, our assistance for farmers and fisherfolk, to our drivers and so on. But most importantly we are monitoring also the developments closely so that we can deploy our monetary tools like the interest rate for example and how we can intervene in the financial market to tame, including the depreciation of the peso. But again as we do seek for solutions to the short-term challenges, we are very careful that we do not compromise our medium-term goals. We just have to put the economy to a higher growth trajectory so that we can achieve more jobs, high quality jobs and reduce poverty rapidly.  That’s the overall architecture of the plan.

PIA GUTIERREZ: Hi, sir. Magandang umaga po. Sir, doon sa meeting, napag-usapan din po ba iyong POGOs and whether it is economically viable to stop its operations, given na marami pong mga calls for them to stop their operations in the Philippines?

NEDA SEC. BALISACAN: No, we did not. We just focused on the very crucial issue on inflation where majority of our farmers, our population, are facing.

PIA GUTIERREZ: All right, sir. Thank you po.

KATRINA DOMINGO: Sir, good morning. Sir, several investment pledges were made during the three state visits. May we know if there have been confirmed ones or some that have already materialized even if it is just in the initial stages?

NEDA SEC. BALISACAN: Of course, as has been earlier reported, there are many of those intentions and pledges. But you know investment, major investments usually take time to materialize. It’s actually fast if you get those investments in one year because you know when people/investors go to a country or expand their operation in a country, they do their work and to ensure that their investment will deliver them the returns.

So as usually the case, you don’t expect that when they promise they will come in, you know, the next day they are here. That’s not the real order.

KATRINA DOMINGO: All right. Sir, just a follow up question: Figures have been reported about investment pledges with regard to the President’s state visits to Indonesia, Singapore, and also his visit to the United States. But may we know how much investment pledges the President got during his F1 weekend in Singapore?

NEDA SEC. BALISACAN: I don’t have the number; I was not privy to that, to its numbers but I think that those were shared already earlier. But again, let me emphasize that a big part of the efforts to bring in investment to the country is really kind of a courtship that you have to keep pitching for the attractiveness of the Philippines as an investment destination. So, it’s not enough, often, that you talk once with them – you talk twice. It has to be a frequent follow up and ensure them that the issues that they raised the first time – for example during the visit of the President and meetings with investors and CEOs in industry countries – the investors raised a number of issues, concerns which we have to address and when we came back, we started discussing/addressing these issues particularly on logistics, infrastructure and even such things as airports.

USEC. EUGENIO: Okay. Maraming salamat po, NEDA Secretary Arsenio Balisacan. Maraming salamat po, OPS-OIC Atty. Cheloy Velicaria-Garafil. Maraming salamat, Malacañang Press Corps.

 

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SOURCE: OPS-NIB (News and Information Bureau – Transcription Section)