"Such statements provide further fuel for resentment against a government that citizens now consider callous."
The managers of the Philippine economy have been under increasingly intense pressure from for the inflation that has been hitting the economy since the beginning of 2018. Since they hold the levers of economic policy making power in this country, it is only fair that the economic managers explain to Juan de la Cruz why, his peso lost 6.8 percent of its purchasing power during the year’s first eight months.
There were two approaches that the economic managers could have taken toward complying with the people’s request. The first was to simply meet the issue head-on, telling the people that, yes, there was a serious problem and proceeding to detail the steps that the government was taking to deal with it.
The second approach was to strike a comparison with past about with inflation, and, to say, in effect, that the people of this country are better off today than they would have been in past inflationary periods.
The most prominent user of the second approach is the Secretary of Budget and Management. In response to a questions thrown at him during a recent ambush interview, Dr. Benjamin Diokno suggested that the inflation sufferers are better off than the inflation sufferers of yesteryears. “We’ve had worse inflations, the (DBM) Department of Budget Management chief said. He then invited his interviewers to cast their minds back to the inflationary episode of 2008-2009.
I don’t know if Dr. Diokno has had any feedback on his “worse inflation” remark. If he hasn’t, I‘lll give him some.
One reaction said that Dr. Diokno reminded him of France’s ill-fated Queen Marie Antoinette. Dr. Diokno seemed to be saying “If the Filipino people don’t have bread, let them eat past inflation.” Another reactor said that the DBM head aded insult to injury: first Duterte administration economic policy takes away some of their purchasing power then they are asked to consider themselves fortunate because past inflation rates were higher. Still another reactor suggested that Dr. Diokno go to her market and try to pay for food items with a graph containing a comparison of the last two decades inflation rates.
I’ll be kinder to Ben Diokno. As a fellow economist, I know where he’s coming from. If I were in his place, I would probably have been temped to get out of my bind by resorting to a comparison with past economic episodes. But I’m certain that I would have been able to resist that temptation, not because I’m a better practitioner of economics than Dr. Diokno but because the comparison that he struck is essentially irrelevant. There is no practical point to it.
Granted, Dr. Diokno that the bad 2008-2009 and earlier inflations did take place and that the sufferers of those inflations were worse off than today’s inflation sufferers. But knowing those things does absolutely nothing to assuage the economic pain of today’s inflation victims. Higher for Diokno perhaps be thinking that, by trotting out his comparison, he will emerge looking better in their eyes? I sure hope not, because he won’t.
My unsolicited advice to Dr. Diokno is this: Stop making comparisons between the current inflation and past inflationary episodes. Such comparisons are irrelevant to the economic pain that today’s inflation sufferers. Sheets of paper containing graphs of past consumer price movements cannot be use to pay for groceries at the supermarket checkout counter. And they provide further fuel for resentment against a government that citizens now consider callous.”‹