No Philippines stagflation, high Vietnam industrialization

MANILA, Philippines — Recently, disinformation like the Philippines is in “stagflation” has been coming out more frequently. I say disinformation because people who use it do not really understand the term, much less can quantify the term.

Here I will clarify the definition, quantify the term and cite numbers to erase subjective and emotional claims.

Stagflation: definition and numbers

Definitions: (a) “stagflation” is bad combination of economic stagnation plus high unemployment plus high inflation; (b) “stagnation” is little or no growth; (c) “high unemployment” can vary across countries but double-digit and even above eight percent is considered high and (d) “high inflation” can vary across countries but for the Philippines, a five percent or higher is considered high.

The Philippines over the last 45 years, 1980-2025

A. Economic stagnation. We experienced GDP contraction five times: -7.3 percent in 1984 and 1985 (last two years under Marcos Sr. before his downfall in 1986), -0.4 percent in 1991 (Mt. Pinatubo eruption, big earthquake in Luzon in 1990 and almost daily blackouts), -0.5 percent in 1998 (Asian financial crisis) and -9.5 percent in 2020 (lockdown dictatorship).

We have little growth of 0.4 percent in 1992 (aftermath of the big earthquake then Pinatubo eruption, daily blackouts) and 1.4 percent in 2009 (global financial crisis that started in the US).

Our average GDP growth over the last two decades (2005-2025) was five percent. Therefore, GDP growth that is negative, zero or below 1.5 percent may be considered a form of economic stagnation

B. High unemployment. From 1985-2005, we experienced double-digit unemployment in 11 out of 21 years. From 2006-2025, we experienced double digit only in 2020 during the lockdown dictatorship. Our average unemployment over the last 10 years, 2015-2025, is 5.8 percent. A six percent or higher can be considered as “high unemployment” in the Philippines.

C. High inflation. Over the last 45 years, we experienced double-digit inflation nine times, all between 1980 and 1994. The highest inflation was 46.7 percent in 1984 and 23.2 percent in 1985.

Over the past 30 years, 1995-2025, we had single digit inflation only. The highest rates were 8.3 percent in 1996, 8.2 percent in 2008, 6.9 percent in 1995, 6.6 percent in 2005 and 6.5 percent in 2000. Our average inflation in the last 15 years, 2010-2025, was only 3.3 percent.

So, “stagnation” is GDP growth of 1.5 percent or lower, “high inflation” is six percent or higher and “high inflation” is five percent or higher.

Philippines growth, unemployment and inflation, 2023-2026

Our GDP growth from 2023-2025 and Q1 2026 in percent are as follows: 5.5, 5.7, 4.4 and 2.8. All above 1.9 threshold and hence, there is no stagnation.

Our unemployment from 2023-2025 and average January-April 2026 in percent are as follows: 5.2, 4.8, 4.7 and 5.2 – all below the six percent threshold and hence, there is no stagnation.

Our inflation from 2023-2025 and average January-May 2026 in percent are as follows: six, 3.2, 1.7 and six. Our numbers in 2026 would qualify as “high inflation.”

To summarize, the Philippines has no stagflation. High inflation, yes, but economic stagnation or high unemployment, no. To continue calling our economic state as “stagflation” is just emotionalism and disinformation.

Vietnam industrialization and power generation

Between 2026 and 2030, Vietnam will invest at least $248 billion in airports, seaports,  energy, highways, railways and urban development. The largest infra projects would be the $67-billion North-South High-Speed Railway and the $22-billion Ninh Thuan Nuclear Power Project (Source: The International Investor substack).

I envy Vietnam. Soon they will have trains with top speed of 300 kph. This will require abundant electricity supply. In power generation in terawatt-hours (TWH), the Philippines had 56.6 in 2005 while Vietnam had only 52.1. In 2025, we had 126.4 while they had 322.8 or 2.6 times larger than ours. And some 47 percent of their total generation is from coal alone – 149 TWH which is larger than our total generation.

Meanwhile, Meralco, Meralco PowerGen Corp. (MGEN) and Vietnam-based VinEnergo Energy Joint Stock Company have signed a Memorandum of Understanding to explore potential collaboration in advancing energy security, power generation development, system adequacy and reliability and deployment of emerging energy technologies in the Philippines.

VinEnergo is a sister company of Vinfast, part of the Vingroup conglomerate and a leading power developer in Vietnam. Aside from developing solar-wind, Vinergo is the lead developer of a huge 4,800 MW Hai Phong LNG power plant, to become the largest LNG thermal plant in Vietnam.

MGEN is the largest LNG developer in the Philippines with two large LNG plants in Batangas (SPPC and EERI) in partnership with Aboitiz Power via Chromite Gas Holdings and SMC. It also has a big 930 MW LNG plant in Singapore, the Pacific Light Plant which is an MGEN subsidiary. So I think this is a beautiful partnership by MGEN and VinEnergo.

Philippines electronics modernization

In a site visit and speech at Texas Instruments Phlippines in Clark, Pampanga last June 19, Executive Secretary Ralph Recto noted that “semiconductors and electronics remain the country’s largest export sector, accounting for nearly 60 percent of our commodity exports… provided  three million jobs for Filipinos… President Marcos has made the development of our semiconductor and electronics industry a national priority.”

Yes, our electronics exports are larger today than in previous years but still small compared to electronics exports of our neighbors in the ASEAN like Vietnam and Singapore. We need more semiconductors and electronics factories here, other manufacturing facilities and factories.

Four things we need to prioritize: more manufacturing-skilled manpower, more modern infrastructures like seaports, airports and highways, abundant energy supply especially thermal power plants and less business bureaucracies and taxes.