It’s said that in some cases, it doesn’t matter whether reality points in one direction, for as long as your feelings point in another. Thus, I hereby present a social media post I saw last week, in which some guy claims that the Philippine economy is now under a recession.
Of course, we aren’t. A recession only happens when a country’s gross domestic product shows negative growth for two consecutive quarters. That happened to the Philippines in 2020, at the onset of the COVID-19 pandemic. That has not happened this year, although our GDP growth has slowed to 2.8% in the first quarter of this year, and then to an even slower 2.3% in the second quarter.
But one supposes we can forgive that guy for saying what he said. He may not be correct in claiming that we are in a recession, but our economic indicators have not been good. Inflation is at 7.2% as of last month. The value of the peso against the US dollar is continuing to plumb new lows, and economists are saying there is no “realistic” way for the peso to return to where it was at the beginning of the year. And it’s safe to assume that there wouldn’t be any relief when we get new inflation figures later this week, or new GDP figures next week. No wonder there has been this feeling of gloom upon us in the past few weeks – or maybe it’s my particular social media algorithm. It feels like, like last year, nobody will be in a festive mood over Christmas.
What’s disappointing about this is that we really could have been spared the worst. It is true that many of our current economic woes are down to external forces, primarily that ego-driven war in Iran. It is true that we were caught flat-footed, and many of the solutions are ones that don’t happen in an instant, like expanding our oil stockpile, or exploring alternative energy sources (which has, in the case of nuclear power, once again fallen victim to NIMBY-ism). But it is also true that critical mistakes were made that could have eased the burdens of Filipino consumers. I have talked about the excise tax on fuel and how suspending or removing it is not, as the government asserts, something “for the rich”. It’s easy to trace runaway inflation to high fuel costs – and no amount of “targeted assistance” would fix it.
Oh, right, our truckers aren’t even getting those subsidies, right.
As I sit here, I wonder if there are any reasons to be hopeful in the coming months. I know, it’s probably an inappropriate question to ask. The supply chain industry can’t trade on vibes like these; if we stop, everything stops. But we are also at the frontlines of consumer sentiment, and we will see first hand how lively – or otherwise – Filipinos feel when they spend for groceries, or perhaps Christmas gifts, in the coming weeks.
Well, for one, the government is starting to take seriously recent concerns of the logistics sector, particularly on the movement of containers both laden and empty. Too bad it had to take a port holiday for them to take notice, but better late than never – and one hopes the conversations made over the last few weeks would result in changes that would not only apply to the current holiday rush, but also beyond. Logistical delays add up to costs – and with fuel prices still unpredictable, any reassurance that shipments will make it on time, and that truckers will be able to complete trips, are very much welcome.
But in the grand scheme of things, that is small fry. The government should stop being jittery when it comes to public investment again. There is a balance to be struck between reviewing all contracts for any whiff of corruption and impropriety, and stopping everything to the detriment of the communities that need new public infrastructure as well associal facilities. But the government’s failure to invest much in the past year means there are even fewer cogs turning in our economy, and contributes to unemployment and a lower quality of life.
One hopes that in 2027, the government realizes it has to do more to jumpstart the economy again, rather than rely entirely on the private sector, as it tends to do. Alas, the 2027 national budget seems to be gearing itself for 2028, with more emphasis on “ayuda” – err, “targeted assistance” – rather than long-term initiatives like infrastructure. Sometimes, it does feel that our elected officials’ personal interest is the biggest roadblock to us realizing our full potential. No wonder it’s easy for some to wrongly toss around terms like “recession” – because if one feels there’s no hope left, then, well, what is left to do?
2026 Asian Logistics, Maritime and Aviation Conference: SCMAP once again supports the annual thought leadership event co-organized by the Hong Kong Trade Development Council, happening on November 16-17 at the Hong Kong Convention and Exhibition Centre. Learn more about this year’s event at almac.hk.
Henrik Batallones is the marketing and communications director of SCMAP, and editor-in-chief of its official publication, Supply Chain Philippines. More information about SCMAP is available at scmap.org.
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