Political Turmoil and External Shocks Hinder Philippine Economy Despite Easing Inflation
Quick Look
- The Philippine economy faces fragility due to internal political turmoil, a corruption scandal, energy shocks, and extreme weather, despite inflation easing to 6.4% in June.
- ING's report highlights ongoing economic pressures, suggesting the central bank may not yet declare victory over inflation.
AI-generated summary
Why It Matters
The Philippine economy is described as fragile, facing internal issues like political turmoil and corruption, alongside external pressures from energy shocks and extreme weather.
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 uncertainties compounded the Philippines’ economic pressures despite inflation easing to 6.4 per cent in June, down from its peak of 7.2 per cent in April following 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.
ING’s study supports analyses from other dim projections for the Philippines’ economic outlook.
Open Questions
- What specific measures will the central bank take next?
- How will political uncertainties be resolved?
- What is the long-term impact of the corruption scandal?
