Philippines economic strains weigh on Marcos approval as inflation concerns intensify

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Philippines inflation and Marcos approval

Highlights

Philippine peso falls past P64-per-dollar to record lows, prompting government to deploy FX reserves and a P10-billion aid program for agriculture.
A Pulse Asia Research survey finds 81% disapprove of Marcos' inflation response as 71% of Filipinos cite inflation as the nation’s top issue.
Social Weather Stations data show Marcos' net satisfaction drops to negative 11 in September as inflation projected at 7.1%-8.1% for October.

Inflation pressure and peso weakness test government response

As reported by BusinessWorld Online, analysts say rising living costs and the peso's slide are reinforcing public discontent, even as the administration argues that external pressures such as higher oil prices and a stronger U.S. dollar are driving the downturn.

Marcos says the government has the tools and foreign exchange reserves needed to defend the currency after the peso breaches the P64-per-dollar level for the first time and posts record-low closes. Palace Press Officer Clarissa A. Castro also says the pressure on the peso is not unique to the Philippines, pointing to global oil prices, U.S. interest rates, geopolitical conflict and investor behavior.

Anthony Lawrence A. Borja, an associate professor of political science at De La Salle University, says Filipinos tend to hold national leaders responsible for economic difficulties regardless of the cause. He adds that while inflation pressures stem partly from external factors, structural weaknesses such as the lack of strong domestic industries and agrarian industrialization leave households more exposed to price shocks.

Malacañang says the government and the Bangko Sentral ng Pilipinas are implementing measures to cushion the impact of peso depreciation, including faster infrastructure spending, a P10-billion aid program for farmers and fisherfolk, fuel subsidies for public transport operators and efforts to stabilize prices of basic goods.

Poll data points to broader political and household impact

A Pulse Asia Research survey released on Oct. 15 shows 71% of Filipinos view inflation as the country's most urgent issue, ahead of corruption and wage increases. The same survey shows 81% disapprove of the administration's handling of inflation, underscoring the scale of the political challenge.

The Philippine Statistics Authority is set to release October inflation data on Nov. 5, while the Bangko Sentral ng Pilipinas expects inflation at 7.1% to 8.1%, compared with 7.2% in September, because of continued pressure from fuel, transport and electricity costs.

A third-quarter Social Weather Stations survey shows Marcos' net satisfaction rating falls four points to negative 11 in September from June. Thirty-five percent of adults say they are satisfied with his performance, while 46% say they are dissatisfied.

Martin R. Racza, secretary-general of the August Twenty-One Movement, says economic hardship is fueling anger as more Filipinos seek work overseas to support their families. Both he and Borja say the administration's communication strategy is becoming central, with calls for clearer engagement with the public, visible progress on State of the Nation Address pledges and more credible action on corruption.

In our earlier article on the Philippine stock market rebound amid a record-low peso, we noted that bargain hunting lifted the PSEi after early weakness even as the currency slid to a fresh all-time low versus the U.S. dollar. We also highlighted how foreign buying returned after several sessions of outflows, while investors stayed cautious and closely watched peso movements and wider macro conditions.

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