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The Philippines
This Week in AsiaEconomics

Is it all economic doom and gloom for the Philippines?

The energy crisis and turmoil in the Senate are among factors threatening the Philippine economy’s recovery, observers warn

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A vendor carries bottles of cooking oil to sell at a market in Quezon City, the Philippines, on July 7. Photo: EPA
Sam Beltran
A potent cocktail of domestic and international political headwinds continues to weigh on the Philippines’ economic recovery, even as inflation eased in June.

Economists point to turmoil in the Senate and a recent corruption scandal that rocked the nation as internal shackles holding back an already fragile economy reeling from energy shocks and extreme weather.

Dutch financial think tank ING said in a recent report that political uncertainty was compounding the Philippines’ economic pressures, despite inflation easing to 6.4 per cent in June from a peak of 7.2 per cent in April amid the US-Israel war on Iran.

“Headline inflation eased in June for a second month in a row, as global oil prices corrected further, resulting in some easing in retail fuel prices. However, we don’t believe the central bank has enough evidence yet to declare victory on inflation,” Deepali Bhargava, ING’s regional head of research for Asia-Pacific, wrote in the report published on July 13.

“Rising political uncertainty following the vice-president’s impeachment is weighing on investor sentiment, potentially delaying reforms, slowing the growth recovery, and maintaining downward pressure on the peso,” she added, referring to the trial of Sara Duterte-Carpio.
A vessel at the Strait of Hormuz, as seen from Musandam, Oman, on Thursday. Photo: Reuters
A vessel at the Strait of Hormuz, as seen from Musandam, Oman, on Thursday. Photo: Reuters

ING’s findings align with other gloomy projections for the Philippines’ economic outlook.

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