The Marcos, Jr. administration overcame one of its biggest challenges in 2023—elevated inflation due in part to the disrupted global markets that resulted in supply chain bottlenecks—through carefully crafted inflation mitigation measures anchored on mitigating the impact on vulnerable populations.

From a high of 8.7 percent in January 2023, inflation decelerated to 4.1 percent in November 2023, well within the Bangko Sentral ng Pilipinas (BSP)’s forecast of 4.0 to 4.8 percent for last month.

This brings the year-to-date (YTD) inflation rate to 6.2 percent, aligned with the Development Budget Coordination Committee (DBCC)’s assumption of 6.0 percent for full year 2023.

“The slower inflation for the month of November is a testament to the Marcos, Jr. administration’s whole-of-government effort to moderate rising commodity prices while protecting the most vulnerable sectors from its effects,” Finance Secretary Benjamin E. Diokno said in an earlier statement.

The national government created the Inter-agency Committee on Inflation and Market Outlook (IAC-IMO) in May under Executive Order (EO) No. 28 as a proactive measure to fight inflation.

Co-chaired by the Secretaries of the Department of Finance (DOF) and the National Economic and Development Authority (NEDA), the IAC-IMO serves as an advisory body to the Economic Development Group (EDG) on measures that will keep inflation, particularly on food and energy, within the government’s target range.

The IAC-IMO is committed to promoting the modernization of agriculture and improving its productivity to help manage inflation and ensure food security for the country, considering the looming threat of the ongoing El Niño. This is partnered by the implementation of specific measures in the El Niño Mitigation and Adaptation Plan and the expedition of government’s responses to mitigate the impact of calamities and natural disasters.

To regulate food inflation, President Ferdinand R. Marcos, Jr. issued EO 39 in September, imposing a price cap on rice. The price cap was geared at addressing non-competitive practices by some market players and complemented by measures to discourage hoarding, thereby reducing the price of rice. The price ceiling was a short-term measure and was subsequently lifted after a month.

In December 2022, the President issued EO 10 which extended the reduced Most Favored Nation (MFN) tariff rates on rice as well as corn and pork to reduce inflationary pressures on domestic food prices. The lower tariff rates were further extended under EO 50, issued on December 22, 2023, to mitigate the impact of the ongoing strong El Niño on domestic food prices.

The President also signed EO 13 in January 2023 to extend the lowered MFN tariff rates for mechanically deboned meat of chicken and turkey until December 31, 2024 to help ensure a continued supply of essential food products at affordable prices, diversity in market sources, and help businesses in processed meat products recover and sustain their operations.

The government redoubled efforts on warehouse investigations and forfeiture procedures, filing of charges against market players on alleged reports of anti-competitive practices, and strict price monitoring of imported rice in the logistics chain to ensure that the lowered tariff rates do not translate to higher profit margins for importers, traders, and middlemen.

The government has also begun working on a rice importation agreement with India, while the IAC-IMO is continuously coordinating with the concerned agencies in the streamlining of guidelines and processes of importation through reviews of past issuances on import processes, and the possible expansion of Unilateral Minimum Access Volume (MAV) of select commodities, in consultation with stakeholders.

On non-food inflation, the government has implemented and monitored various demand and supply management measures for key commodities (i.e. energy and water), wage and fare hike petitions, and the suspension of pass-through fees for delivery trucks as enforced under EO 41.

To alleviate inflationary pressures on vulnerable sectors, the Marcos, Jr. administration has distributed financial assistance through the third tranche of the Targeted Cash Transfer (TCT) Program (PHP 7.6 billion); the Pantawid Pasada Program (PHP 3 billion) for drivers and operators of various modes of public transportation and delivery services; and its fuel subsidy program (PHP 500 million) for farmers and fisherfolk.

The International Monetary Fund (IMF) lauded this targeted strategy as opposed to generalized subsidies.

Just recently, the President issued EO 44, establishing the government’s flagship program of “Walang Gutom 2027: Food Stamp Program.” The program aims to provide monetary-based assistance to low-income households through electronic transfer cards that can be used to purchase food items in partner establishments.

“As we enter the new year, you can count on the government to mobilize all efforts toward addressing inflationary pressures. The IAC-IMO recognizes the pertinent upside risks that need to be addressed in the near term. Keeping the inflation rate within manageable levels to protect the Filipino people’s purchasing power and maintaining macroeconomic stability shall remain our top priority,” Secretary Diokno said.

With the implementation of the Medium-Term Fiscal Framework (MTFF), the government’s commitment to a fiscal consolidation path allows monetary and fiscal policies to be in sync in containing inflation pressures.

In March, the BSP had raised its policy rate successively by 425 basis points (bps) since May 2022 until it reached 6.25 percent. Thereafter, the Monetary Board has kept its benchmark interest rates unchanged for four straight meetings until September.

In October, the BSP delivered an off-cycle 25 bps rate hike to re-anchor inflation expectations, bringing the policy rate to 6.50 percent.

The Development Budget Coordination Committee (DBCC) expects the inflation rate to return to the target range of 2.0 to 4.0 percent in 2024 until 2028.