On Sunday Mr. Duterte’s finance chief announced suspension of a fuel-tax increase scheduled for January, an important source of funding for Mr. Duterte’s $166 billion infrastructure vision.

“This course of action will help anchor inflation expectations for the coming year, allow the public to manage their finances better, and disallow hoarders and profiteers from taking advantage of the situation,” Finance Secretary Carlos Dominguez said.

Mr. Duterte has faced a number of setbacks in recent months, and threatened repeatedly to resign. His war against drugs, while leaving thousands dead, has failed to eliminate narcotics from the streets. Courts and even some allies interfered in his attempt to jail a prominent critic. And in a country that is about 80% Roman Catholic, his comments seen as insulting to God were poorly received.

An investment boom that Mr. Duterte hoped would result from embracing China more closely—risking the traditional U.S. alliance and upsetting the balance of power in Asia—has also failed to materialize. Chinese funding has paid for two bridges in Manila, but flagship projects such as commuter rail have seen little of the promised billions.

While Mr. Duterte’s own satisfaction rating has rebounded since his God comments in June, his administration’s slipped 8 points between June and September, according to pollster Social Weather Stations. A separate survey last month, by local pollster Pulse Asia, found inflation the top national concern of 63% of respondents, and more than half disapproving of the government’s handling of the issue.

Inflation is becoming a global concern as central banks slowly unwind cheap-money policies that have been in place for a decade. The Philippines central bank has raised interest rates four times this year.

Economists said that while economic growth in the Philippines remains strong, inflation has come up faster than expected; this year’s monthly average rate has been 5%, compared with 2.9% in 2017. After playing down the issue, the government is now being forced to act.

“It’s certainly giving policy makers a bit of worry in terms of impact on the ground,” Song Seng Wun, an economist at CIMB Private Bank in Singapore, said Monday.

Price increases from transport to food and beverages have been especially hard on the rural population, for whom life’s staples are in short supply. A government tax overhaul and rice shortages have exacerbated the effect.

The weather hasn’t helped. Hundreds of thousands of tons of rice were destroyed by a typhoon last month, sending prices higher and prompting the president to lift market restrictions and order “unimpeded” imports.

Write to Jake Maxwell Watts at [email protected]

Source: https://www.wsj.com/articles/inflation-weakens-support-for-government-of-philippine-strongman-duterte-1539602046