With the increase in the prices of commodities and the decrease of the purchasing power of the peso, the question at the forefront of most is: are we in a recession? ACG Founding Chairman and Senior Tax Advisor Mon Abrea answered this question in an article published with the Philippine Daily Inquirer. As part of his studies at the Harvard Kennedy School, Abrea has been studying Recession, Growth and Macroeconomic Policy under Karen Dynan.
According to him, the government appears to have a positive outlook on the economy. However, the opinion of Filipino consumers, data from the PSA, and the soaring inflation rates appear to disagree. He emphasized that addressing this looming recession and stagflation is the reason why addressing high inflation requires a whole-of-government approach.
“Aside from consumers losing purchasing power, which hurts the poor more disproportionately, inflation can cause a painful recession due to sustained increase in interest rates resulting in a slowdown of the economy, thus increasing unemployment and job losses,” Abrea said, explaining the negative impacts of inflation.
He also discussed the policies that the government is implementing to combat inflation – specifically, the increasing of the interest rates by the BSP. However, he emphasized that fighting inflation requires not only the monetary policies of the BSP but also good fiscal policies from Congress and the Department of Finance.
Abrea is set to publish a policy proposal on how to combat inflation.
READ THE FULL ARTICLE HERE: https://tinyurl.com/5n6st5uh