This is the #NeverForget Diary, a weekly summary of what’s happening in the Philippines under Marcos II. In a time of mangled histories and fragile memories, it’s crucial never to forget. (Note: this post may be clipped in your email inbox. Photo above from Erwin Tulfo on FB.)
Inflation in the Philippines reached 7.7% in October 2022. That’s the highest rate since December 2008, or nearly 14 years ago.
This number falls well within the Bangko Sentral ng Pilipinas (BSP) forecast:
Here’s my full take on the October inflation stats:
Food is the biggest contributor to inflation. Is this a “golden era” of food prices?
Aside from food, rents and electricity expenses are contributing more to inflation. Related to this, a report by Esquire says that apartments in the Philippines are already among the costliest in the region.
Even big companies are reeling form the effects of high inflation:
In response to record high inflation, the BSP said it “strongly urge[s] the timely implementation of non-monetary government interventions to mitigate the impact of persistent supply-side pressures on inflation.”
This is what that really means:
Meanwhile, Socioeconomic Planning Secretary Arsenio Balisacan said:
“the PDP [Philippine Development Plan] 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.”
But should Marcos wait for the PDP (out December 2022) before aggressively addressing inflation?
The Marcos government’s incompetence in the face of record inflation is just glaring. That’s the subject of a Rappler op-ed recently.
In a forum this week, ex-BSP deputy governor Diwa Guinigundo said Marcos Jr.’s economic policy is still unclear—even with 2022 almost over.
Meanwhile, Albay lawmaker Joey Salceda recommended a food security cluster in the cabinet. A tacit admission that Marcos Jr. is not performing well as agriculture secretary?
Is the president on top of inflation and many other problems? Again and again, the president displays his tendency to spew word salad:
This week, the president launched “Kadiwa ng Pasko” as a way to promote local produce and products. The name is strategic: a way to perfume the legacy of martial law since the Kadiwa program was introduced by his father.
By the way, the president didn’t even attend this event, and only recorded a message.
For his part, presidential son and Ilocos lawmaker Sandro Marcos downplayed the recent inflation stats by saying “it’s really a global phenomenon” and “I guess we just have to keep on going and hope that this global phenomenon would work out for all.”
So detached from reality. We can’t just “hope.” The Marcos government can fight inflation or at least abate its worst effects. I wrote about this before:
Also, Sandro Marcos said it’s inflation reached its highest level since December 2018, but in fact it’s December 2008. He was off by 10 years.
Speaking of Sandro, he suggested that rice farmers plant dragon fruit in order to triple their earnings. But how exactly does one plant dragon fruit in rice fields?
Memes surrounding inflation continue to crop up. Here’s how incomes have kept pace with inflation:
And here’s how to dress up for Halloween amid record inflation:
DEFENDING THE PESO
To be sure, rising inflation is indeed a global thing. In the US, there are plenty of misconceptions about inflation.
To fight inflation many central banks are raising interest rates. On November 3, the US Federal Reserve further raised its federal funds rate by 75 basis points.
For its part, the Bangko Sentral said that it will match this Fed rate hike this month, if only to minimize the distance between the US and Philippine rates. This will be key for easing pressures on the peso to depreciate against the dollar.
We don’t want a weaker peso because it increases our debt. This week, the Bureau of the Treasury said that total debt has already balloon to P13.5 trillion—another record high.
So far, the defense of the peso seems to be working. The peso is holding at around P59/USD. This is on account of the massive selling of dollars by the BSP.
But is the defense of the peso sustainable? Some say yes, and in fact the BSP might have $30 billion more to spare—indicating sufficient reserves.
But there’s still a lot of uncertainty in coming months that may still jeopardize our supply of reserves.
We also need to ask: will the BSP’s higher rates help quell inflation? Data show that borrowing continues to grow robustly despite higher interest rates (monetary policy usually operates with a lag):
All over the world, many economists are reassessing the wisdom of hawkish rate hikes. Yes, inflation must be fought. But at what cost? Will the US tolerate an induced recession just to fight inflation?
The Fed’s chair, Jerome Powell, is proving to be a tough inflation hawk:
Despite rate hikes in the US, credit card debt has risen robustly as well…
…and led to massive costs for existing card holders.
The strength of the USD means that their imports are a lot cheaper. But maybe the effect on inflation is not so large after all.
Inflation targets are key in monetary policy. But new research shows that inflation is salient only at certain levels.
White House economists argue that the current spell of high inflation is more similar to the postwar US economy rather than the oil shocks in the ‘70s.
Europe is in trouble, too. In Europe, inflation has exceeded 10% already.
European Central Bank president Christine Lagarde said recently, “We do not believe that recession will be sufficient to tame inflation.”
Even in Europe, the wisdom of interest rate hikes as a way to fight inflation is being questioned. Inflation rose more in countries with larger interest rate hikes.
Time to rethink the role of the IMF in the global order?
Is the global macroeconomy shifting to a new era?
‘WELCOME TO HOKKAIDO’
Amid rumors surrounding the whereabouts of President Marcos Jr. during the onslaught of Paeng (many guessed that he might be in Japan), Marcos joked at media and said, “Welcome to Hokkaido.”
Many thought this deeply insensitive; 121 died from Paeng.
Meanwhile, some netizens offered this clapback at the photo-ops of the president in the aftermath of Paeng:
This takes the cake as the worst Paeng photo op:
Predictably…
During a plane flight amid Paeng operations, DSWD Secretary Erwin Tulfo also took a photo of himself and the president—seemingly sleeping with wireless earphones on. Unbothered much? (Note as well the LV shades of Tulfo).
This calls to mind a piece by Philstar columnist Boo Chanco this week, where he said Marcos Jr.’s presidency is a “detached presidency.”
In the aftermath of Paeng, the president reiterated his call for more tree-planting as a way to combat climate change:
Even Bongbong’s wife Liza—who was named “Chief Girl Scout” this week—is pushing for more tree-planting. What’s with the Marcoses and tree-planting?
Btw, what Girl Scout values does Liza embody anyway?
Lastly, ex-PCGG commissioner Ruben Carranza compared the relief for typhoon victims and the Marcos ill-gotten wealth yet uncollected:
LULA’S WIN AND THE PH
Lula’s historic and cliffhanger win against Bolsonaro has sent shockwaves worldwide. Celebrations are reminiscent of the Kakampink rallies on this year’s campaign trail.
Lula won by a hairline: 50.9% against Bolsonaro’s 49.1%. His momentous win has prompted discussions on how the Philippines might push back against populist leaders:
#NEVERFORGET
On November 2, family members of human rights victims during martial law met at the Bantayog ng mga Bayani in Quezon City.
The ghosts of martial law haunt the Marcos wherever they go:
More upcoming research on Marcosian historical distortions:
Some academics are pushing to “nuance” martial law narratives. But is this sound?
MISCELLANY
The president finally made it optional to wear masks in schools. But is this backed by science?
At any rate, the learning losses from the pandemic will be long-lasting.
The Quezon City local government set up vaccination areas at select cemeteries. Smart!
Dennis Uy, a crony of ex-president Rodrigo Duterte, is letting go of Conti’s bakeshop and restaurant which he previously acquired:
A throwback to the Duterte-era drug war.
BBM vloggers are disbanded already, as early as now!
Rappler CEO and Nobel Peace Prize laureate Maria Ressa says we’re on the “tail end of our shared reality.”
Did GMA take a swipe at Marcos Jr.’s incompetence with this show?
This was spotted by eagle-eyed netizens on the website of the Office of the President:
#RIP Danny Javier.
Monstrous traffic at the Skyway:
Elon Musk’s takeover of Twitter has led to much chaos:
Among many other things, Musk abruptly halved Twitter’s workforce:
GRAPHS OF NOTE
The PAGASA’s nominal budget over the years:
UP statistics prof Peter Cayton provided the real (inflation-adjusted) figures:
More economists will do well to focus on balance of payments (BOP) data and issues again:
A rejoinder on the viral infographic about CO2 emissions and growth:
Despite sanctions on Russia, it’s able to fund its invasion of Ukraine through other trade channels.
The economic impact of the expansion of higher ed institutions in Vietnam, as studied by Twitter econ memelord Khoa Vu:
The death of Friendster may give clues as to the fate of Twitter and Facebook.
Tea vs chai.
Not really a graph, but a data point: the digital economy was as large as 9.6% of GDP in 2021.
RECOMMENDATIONS
Recommended photo: Sun as a jack-o-lantern.
Speaking of space, here’s a new potential threat to all humanity:
Recommended dessert: The famous ADB crinkles, now available outside of ADB.
Recommended movie: Wendell & Wild on Netflix. ⭐️⭐️⭐️⭐️
Recommended series: Kung Fu Panda: The Dragon Knight on Netflix. ⭐️⭐️⭐️⭐️⭐️ Fast-paced show with an extremely witty screenplay.
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