Declining inflation and challenges for the economic team

This week saw a number of good reports in public finance and price stabilization published in BusinessWorld: “Government rightsizing bill signed into law” (Aug. 5), “DBM reluctant to reenact ‘most corrupt’ 2025 budget” (Aug. 5), “Philippine wholesale price growth eases to 3% in June” (Aug. 5), “Stocks go up as inflation cools to near 6-year low” (Aug. 5), “Inflation cools further in July to 0.9%” (Aug. 6), “Bank lending jumps to four-month high in June” (Aug. 6).

- BIENVENIDO S.OPLAS, JR.

The “Government Optimization Act,” RA 12231, formerly called the National Government Rightsizing Program, is a long-overdue piece of legislation because the expenditure side of the budget remains the bigger problem than the revenue side, which is why our annual budget deficit and public borrowings remain high — at least P1.5 trillion a year. There is unnecessary redundancy in the bureaucracy that contributes to ever-rising public spending.

Congress and the President should have opted for a large reduction in National Government personnel as programs and personnel in local governments keep expanding too. But the President opted for optimizing the services of those who are already hired. Which should imply that new hires should be kept to a minimum.

Perhaps the biggest positive economic news this year, so far, is the low inflation rate of only 0.9% for July 2025, just a notch higher than the 0.8% in October 2019 and the 0.7% in April 2016.