The inflation crisis under the Marcos economy
By Diana G. Mendoza
Manila—The Philippines’ problem with onions and their record-high costs became conspicuous at the World Economic Forum in Switzerland, where Filipino journalists covering the event noticed that the bulb vegetable in the European country cost less than a third of its price in the Philippines.
President Ferdinand Marcos Jr. attended the global forum held in the ski resort town of Davos, with a startling entourage of 70 government officials, legislators, business tycoons and their family members. It was his eighth foreign trip since assuming office last year.
Back home, Filipinos were still reeling from spending the holidays with high food prices amid the country’s steep inflation rate at a 14-year high of 8.1 percent as of December 2022. Filipinos are confronted with the rising costs of other basic goods vis-a-vis wage rates that have remained stagnant since before the pandemic.
According to news reports, Davos groceries were selling onions at 1.40 Swiss francs per half a kilo, which is equivalent to 83 pesos, or 166 pesos per kilo. In the Philippines, onions cost as much as 600 pesos per kilo – the most expensive in the history of the country’s staple vegetable.
Filipinos complained that the world’s most expensive onion can be found in their country, where it costs more than beef and chicken.
The unreasonably abrupt rise in costs started in August 2022. Consumers noticed a fivefold increase in the prices of goods in both the wet markets and groceries. Food establishment owners also complained about the almost tenfold price increase from suppliers.
As Filipino prepared for the holidays by early December, the cost of onions spiked to 650 pesos per kilo, prompting the government to impose a lower retail price and set up government-subsidized stores that sell cheaper onions.
At the onset of 2023, the government released to the markets smuggled and confiscated onions while, at the same time, importing more than 20,000 metric tons of onions from neighboring countries.
Marcos, who also appointed himself as secretary of the Department of Agriculture, blamed hoarding, smuggling, unscrupulous trading, production shortfall and supply shortage for the crisis, but offered no specific and direct solutions. Agriculture officials couldn’t explain the unrealistic prices of onion.
Opposition Sen. Risa Hontiveros described the onion importation as the government’s “unforgivable error” because it is hurtful to farmers, who stand to lose against big traders and importers due to the timing of the importation during the harvest season.
Pulitzer Prize-winning journalist Manny Mogato said Marcos’ seven months at the farm department was a complete disaster. “He could not feed a starving nation with his slogan of unity,” he said, referring to Marcos’ election campaign platform.
“The onion crisis should be a wake-up call for Marcos. It was a problem that could have been prevented. But he allowed it to happen,” Mogato stated in an article on PressOne. “It’s time for Marcos Jr. to give up his position as agriculture secretary. He is a big failure.”
In more than seven months in office, Mogato said Marcos has not regularly visited the agriculture offices to see the farm situation. He spends more time traveling abroad, attending parties and watching a car race in Singapore at the start of his term.
At the economic forum, Marcos promoted the sovereign wealth fund, a legislative measure proposed by his allies— including his cousin and son— in Philippine Congress. Also known as the Maharlika Investment Fund, the sovereign wealth fund is a means of raising funds and directing investments toward high-cost infrastructure projects. The proposal has yet to be discussed thoroughly in the Senate.
Critics castigated Marcos for promoting the questionable wealth fund instead of taking action to reduce food prices and address the difficulties of the agriculture sector.
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