$1:P61.59

The peso continues to be under strong pressure. Our currency has fallen to its lowest level yet at $1:P61.59.

The market consensus is we have not found the bottom yet. A couple of months back, one international bank forecast the peso falling to the $1:P62 level.

We thought this was a bit alarmist. Today, such a rate appears entirely possible.

Last month, the BSP reversed its dovish course and hiked interest rates by 25 basis points. The expectation is that our monetary authorities will follow this up with as much as a 50-basis point rise.

Tighter money policies will rein in economic growth. For the first quarter of this year, our GDP growth rate was recorded at 2.8 percent. This is substantially lower than expectation. It is certainly lower than the five to six percent growth officially projected.

It is expected that our growth rate could fall further as the year wears on. The nightmare scenario is that our economic growth falls to match our population growth rate, which is at 1.9 percent. Should that happen, our economy will be definitively stagnant.

These are not just numbers. The social costs they imply will be immense. Instead of declining, our poverty rate will be rising. Children will be pulled from education. Caloric intake will fall. Criminality could rise.

Our ability to sustain our public debt will be affected. The borrowings we incurred was premised on robust domestic growth. The hope is that healthy economic expansion will enable us to outrun our debt. That hope is losing its basis.

It is convenient to blame external factors for our current economic weakness. Vietnam, which is subject to the same external factors, is expected to grow its economy by 7.5 percent this year.

One Vietnamese province accepts more international tourists than our total 2025 arrivals. We wasted so much opportunities by keeping for too long a tourism secretary who seemed more interested in having her photographs plastered on all our tourism promotion materials. Instead of selling our destinations, we were marketing her face.

It is not only in tourism where we are falling behind. For the first quarter of this year, our rice production declined by 6.3 percent to only 4.4 million tons. This means we will have to import more of the staple crop – very likely from Vietnam, whose agriculture has been roaring.

The inflation projections are not encouraging either. Our inflation rate for April jumped up to 7.2 percent even as government maintains its target at between two and four percent. The same bank economists who estimate a weaker peso also anticipate inflation will hit double digits later in the year.

In an effort to tame inflation, the BSP will rely even more on raising interest rates. But at present rates, changes in consumer spending are evident. Retailers report lesser discretionary spending as wage earners focus on food and other essentials.

The property sector is feeling the pinch. A major property developer announced the cancellation of projects as our stock of unsold condominium units has run up to 80 months. This is a consequence of higher mortgage rates.

Businesses are adjusting the best they can in the face of evident signs of stagflation. Many small businesses are not expecting to survive in this environment.

While the economy slides into stagflation – and possibly, into recession – our people are looking to government for relief. We are in a condition that demands economic statesmanship at the highest level.

But the political elite does not seem inclined to do the economic statesmanship the present crisis demands.

These days, I try to avoid political commentary. Our politics descended into something utterly banal. What passes for political discourse hardly rises above mere heckling. Armies of paid trolls wander across all media, reducing everything to the plainly partisan.

We find ourselves in the maelstrom of burlesque politics.

Impeachment has been depreciated into a mere partisan weapon, no longer a solemn sovereign act. It is a drone swirling in the air, ready to shoot down rivals and ignore electoral mandates.

This week has been particularly distasteful. A power struggle erupted in the Senate. A “sealed” arrest warrant was unveiled and a particularly clumsy attempt was made to arrest a sitting senator of the Republic.

The attempt by the PNP and the NBI to arrest Senator de la Rosa outshines the Keystone Cops by a mile. Shots were fired at the august chamber Wednesday night. Hours later, de la Rosa quietly slips out of a building that was supposed to be locked down by the police. He is back in hiding.

The chaotic episode made it to the international media. It was an embarrassing episode for the whole of government. We learn nothing from it apart from the depth of official incompetence we are heir to.

Unfortunately, the burlesque politics that has erupted in all its glory the past few days distracts us from contemplating the real crisis that haunts our daily lives. All the sideshows divert us from addressing the real issues centered on rescuing our distressed economy from a deepening crisis.

The ease with which political sideshows so easily distract us speaks of a deeper malaise: a state that exhibits all the symptoms of failing.

We have become a banana republic where the elite is consumed by partisan warfare while the masses suffer without meaningful leadership.