Benign

The Philippine Statistics Authority puts the August inflation rate at 2.4 percent. That is certainly within target range and that is certainly benign.

The latest inflation number sees a deceleration from the July inflation rate of 2.7 percent. While our inflation rate is near the median range for the ASEAN economies, it is below the BSP projection. Our monetary authorities attribute the much lower rate to the tightening of quarantines in the first half of August.

The stronger peso might also be a factor explaining the benign inflation number – although weak consumer demand due to continuing restrictions on movement is certainly a major cause.

Food prices held steady even as the quarantines caused some disruption in the flow of farm produce. For the 16th straight month, rice prices decelerated. This is testimony to the wisdom of shifting from quantitative restrictions to tariffs in rice trading. The revenue from tariffs, in turn, enables investments in modernizing our agriculture.

Our agriculture turned in a remarkable performance in an economy beleaguered by a pandemic. Even as all other sectors contracted and shed jobs in the second quarter, our agriculture continued expanding. The forward-looking policies of Agriculture Secretary William Dar are beginning to produce results.

Even during the weeks when the community quarantines were at their most restrictive, no area of the country suffered food shortages. That is major relief. Nothing compounds fighting a pandemic more than having food shortages at the same instance.

Factors that normally drive up inflation are muted at this time. Oil prices are holding steady at low levels. The currency is actually appreciating, but this is due to a sharp drop in importations. A sharp rise in unemployment means consumer demand will weaken.

The low inflation rate creates some headroom for monetary intervention. We could further lower interest rates without fearing an inflationary backlash -- although the BSP has signaled this is not the optimal recourse for the moment.

There is a downside to the low inflation number, of course. It suggests the economy is in the doldrums. Our industries are not stocking up on raw materials. Our retail sector is not piling up inventories. Consumers are hesitant to spend.

If the inflation number goes any lower, it could signal a period of stagnation. That could create inertia difficult to break.

Government’s strategy to prevent the economy settling into a low-growth episode is to aggressively invest in modernizing our infrastructure. We have the financing in place for the major projects. The funding comes from multilateral financing institutions and friendly governments. The ODA easily converts into fuel for stimulating domestic economic activity.

The Build, Build, Build program will be complemented by private sector investments in new infra.

San Miguel’s Ramon Ang, for instance, announced the conglomerate would push through with the Bulacan airport project, the Pasig River toll road and the South Luzon expressway leading up to Bicol.  These are big-ticket investments that will create jobs immediately and prepare our economy for future growth.

This is the sort of attitude we need to break out of what could be a debilitating post-pandemic spiral.

Unrewarded

When the pandemic descended upon us, we relied on the grit and dedication of our health workers to save the day. Many of them paid with their lives in the valiant effort to hold our fragile health system together before the onslaught of infections.

We called our health workers heroes. We celebrated them in streamers and in song. But no one apologized for the way their work was left unrewarded for too long.

The anecdotes are abundant. Nurses were paid starvation wages. Before they could deserve that pay, they actually paid hospitals to work for free to earn accreditation.

During the height of the public health emergency, our health workers had to walk for hours to get to their posts. Some were lucky enough to find bicycles – although two nurses were killed by reckless motorists. At the hospitals, they slept on floors and stayed on duty for days on end. Some were expelled from boarding houses by landlords fearful they carried the virus with them.

Because of the great demand for health workers, the authorities banned nurses from leaving the country even if they had work contracts ready. They could have filed a constitutional case over infringement of their right to travel and work where they please. But they did not.

One recent report said our health workers were the lowest paid in Asia. Now we have the actual numbers.

A fairly senior Filipino nurse in a major health facility gets paid P40,380 a month. In Singapore, the same work commands a pay check of P236,000 a month.

It is understandable that all our nurses aspire to bring their talents abroad.

We have great schools that train more health workers than we need. But then, we have also become a major exporter of nurses and medical technologists.

If we do build up our health system as promised, we will probably face a shortage of personnel to man the new facilities. Today, in the midst of the pandemic, we hear of doctors and nurses quitting their jobs because the risks simply outstrip the rewards.

If we do build a health system comparable to global benchmarks, we will need to reward our professionals better. We will have new hospitals deficient in medical staff.

We have tried compulsion: making our doctors serve locally for a few years after graduation. It is time we used tried and tested market methods, such as paying them better rather than making hollow appeals to “patriotism.”