The Philippines' stagflation risks reflect longstanding structural weaknesses as much as external oil shocks, economists said, challenging a House of Representatives research paper that attributes much of the slowdown to supply disruptions. The paper, reported by BusinessWorld, warns against expansionary government intervention.
Analysts argue that the risks stem from persistent inefficiencies in the economy, including low productivity, infrastructure gaps, and regulatory bottlenecks, which predate the recent oil price surge triggered by geopolitical tensions in Iran. They contend that focusing solely on the oil shock oversimplifies the problem and could lead to misguided policy responses.
The debate underscores a tension between short-term supply-side fixes and longer-term structural reforms. While the House paper cautions against stimulus that might worsen inflation, economists call for deeper measures to address competitiveness and reduce vulnerability to external shocks.