Why is Philippine inflation still high? NEDA explains
MANILA, Philippines — Since the pandemic struck, inflation—the rising cost of basic necessities—has consistently topped Filipinos’ list of concerns in various surveys.
As a result, many Filipinos continue to question: why is inflation so aggressive? The National Economic Development Authority (NEDA) points to the uneven pace of post-pandemic recovery across different sectors.
“We would still [recognize] that the prices are still stubbornly high, yes. And the reason for that is, we saw that there are sectors that have not fully recovered their pre-COVID levels,” NEDA Undersecretary Rosemarie Edillon.
During the height of the pandemic—from 2020 to early 2022—demand was low, leading to lower prices and a subdued inflation rate, Edillon explained.
However, when President Ferdinand Marcos Jr.’s administration fully reopened the Philippine economy in October 2022, those who had savings and a steady income during the pandemic engaged in “revenge spending.”
“You have uneven recovery across the sectors and across the regions,” she said.
Micro and small businesses have yet to stabilize their balance sheets, preventing a full post-pandemic rebound.
Meanwhile, some sectors had excess money but faced a shortage of goods, further driving up prices.
Inflation surged in 2022, peaking in 2023. While it has begun to ease in 2024, prices remain elevated.
That’s because inflation measures the year-on-year growth of prices. Even with a lower rate, a positive inflation rate still means prices are rising, just at a slower pace.
Some industries still struggling post-pandemic include real estate, mining and quarrying.
The slowdown in real estate is largely due to changing work arrangements after the pandemic, while weaker global demand has affected the mining sector.
“Until you have all these bits and pieces, nuts and bolts actually getting into place again, then we will have that fully functioning,” she said.
As a result, Edillon explained that the government needs to step up efforts to protect those most affected by inflation.
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