APD | Philippine economic managers report inflation slowed down to 4.4 percent in January

By APD writer Melo M. Acuna

MANILA, Feb. 6 (APD) – The country’s economic managers composed of the secretaries of the Departments of Finance and Budget and Management and National Economic and Development Authority reported that the inflation rate for January further slowed down to 4.4 percent.

“This gives us an auspicious start in our efforts this year to keep inflation manageable and bring it back to the government’s target range of 2 to 4 percent for 2019,” they said in a statement.

The inflation rate in January is said to be the slowest in the past nine months and considerably lower than the 5.1 percent reading in the previous month. This is also slightly below the 4.5 percent median market forecast.

They explained though the inflation’s decelerating trend is something they anticipated, they “remain driven to be bolder and more focused” on their overall anti-inflationary measures.

Slower price increases in food and non-alcoholic beverages softened the overall inflation rate as food and non-alcoholic beverages inflation averaged at 5.6 percent in January 2019 from 6.7 percent in December 2018.

They attributed it to the continuous improvement in the country’s food supply specifically rice, corn and fish, the staple food of most Filipinos. Rice inflation moderated to 4.7 percent in January 2019 from 6 percent in the preceding month. Corn inflation also softened to 0.9 percent from 2.7 percent in December 2018 while fish prices dipped to 7.8 percent in January 2019 from double-digit last year.

The economic managers said the easing of headline inflation was widely felt across the regions. Inflation in Metro Manila slowed down to 4.6 percent while other areas outside Metro Manila slowed to 4.4 percent. However, inflation in the Autonomous Region in Muslim Mindanao was the highest at 6.1 percent.

The price index of petroleum and fuels for transport equipment significantly dropped by 1.8 percent last month from the 4.1 percent listed in December 2018. According to the economic managers, this partly contributed to lower transport cost and utility rates that further drove down inflation on non-food items.

“We are confident that inflation will further ease in the near term and settle at 3.2 percent for 2019 and 3.0 for 2020 as seen by the Bangko Sentral ng Pilipinas,” the said.

They continue to push for the full implementation of non-monetary and administrative measures to stave off possible supply bottlenecks that have caused prices of key agricultural commodities to surge last year.

In their statement, they expressed optimism with the enactment of the rice tariffication bill, the government is preparing for what they describe as quick and smooth transition to the new import tariff regime, together with the operationalization of the National Single Window to facilitate seamless trade transactions.

High-value crops including fruits and vegetables which experienced weather-related supply shocks last year “also need to be made more adaptive and resilient to changing weather conditions.”

They called on the Department of Agriculture to facilitate a comprehensive crop management system to align farming activities with the prevailing supply-demand condition and weather pattern. They said in the fishery sector, sustainable management of coastal and other marine resources should be intensified along with the reported “decline” of available fish in open waters.

They underscored the resounding consensus among the members of the Economic Development Cluster that the agriculture sector “needs greater attention now more than ever” because the sector must work towards resiliency and be adaptive to extreme weather events.

The economic managers also called for the timely release of the unconditional cash transfers and fuel vouchers for public utility jeepneys to cushion the impact of inflation on the society’s vulnerable sectors and mitigate possible second-round effects.

“All these are part of the government’s commitment to boost economic growth in all dimensions and improve the quality of living for everyone,” they concluded.

The economic managers are Secretaries Ernesto M. Pernia of the National Economic and Development Authority (NEDA), Carlos G. Dominguez III of the Department of Finance (DOF) and Benjamin E. Diokno of the Department of Budget and Management (DBM).

However, Laban Konsyumer Inc., a pro-consumer advocacy group said the 4.4 percent inflation in January is “still high and above the maximum target” though consumers enjoyed lower prices of fuel, rice, transportation and electricity for much of the month of January.

In a statement released at 2:00 P.M. today, Atty. Vic Dimagiba, a former Department of Trade and Industry undersecretary said this should open the minds of the economic managers to admit the tax reform law is a “bad law.”

“The decision to proceed with the second trance of the Excise Taxes after an earlier decision to suspend for three months proved to be wrong,” LKI said. Inflation could have been within the target ranges, the NGO concluded.

(ASIA PACIFIC DAILY)