MANILA -- The top economic managers of the Duterte administration remain optimistic that inflation will taper off by yearend after hitting a fresh nine-year high last month, mainly due to higher food prices caused by supply disruptions, immediately following the onslaught of Typhoon Ompong.
In a joint statement, the National Economic and Development Authority (NEDA), Department of Finance (DOF) and Department of Budget and Management (DBM) cited the moderation of non-food inflation to 4 percent in September from 4.1 percent in the previous month.
Inflation in the National Capital Region (NCR) also showed signs of easing, slowing down to 6.3 percent in September 2018 from the 7 percent in August 2018, they said.
“These clear signs of easing boost our confidence that inflation will taper off by year-end and go back to our target range by early next year. But we must couple this optimism with quick and focused actions in order to sustain gains made so far in keeping inflation in check,” the economic team said.
The Philippine Statistics Authority (PSA) on Friday reported that the country’s headline inflation surged to 6.7 percent in September 2018 from 6.4 percent in the previous month.
It attributed the uptrend mainly to the heavily-weighted food and non-alcoholic beverages index, which further accelerated to 9.7 percent in September, its highest since last month.
The country's economic managers said supply disruptions caused by the onslaught of ‘Ompong’ in the regions of Ilocos, Cagayan, and Cordillera Autonomous Region put upward pressures on food prices.
Damage to agriculture, including facilities and infrastructure, amounted to PHP26.8 billion, they said.
“This has kept the price of the country’s staple grain elevated despite the arrival of some imported rice and the improvement in the rice stocks of the National Food Authority. The declaration of a state of calamity we have proposed in these regions through the President’s Proclamation No. 593, series of 2018, should provide some needed relief,” the statement read.
NEDA Undersecretary for Regional Development Adoracion Navarro earlier said the government could impose price ceilings on basic necessities and prime commodities under the President’s declaration of a state of calamity in areas affected by the typhoon, thus easing inflationary expectations.
Economic managers reiterated their call for the speedy passage of the bill amending Republic Act No. 8178, or the Agricultural Tariffication Act, which will significantly bring down the price of rice and improve the competitiveness of the rice sector in the long-term.
Food and non-alcoholic beverages make up the bulk, or 38.34 percent, of the consumer price index (CPI), an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
The PSA said housing, water, electricity, gas and other fuels, comprising 22.04 percent of the CPI, decelerated to 4.6 percent in September from 5.5 percent the previous month.
“Global fuel prices remain a concern in the near term given the gloomy outlook on oil supply and an increasing demand for petroleum products during the winter. Thus, we urge a quick response to address this upside risk, including demand-side management strategies,” the statement further read.
The economic managers cited some of the proposed measures, including a reduction in the country’s overall energy demand through the Department of Energy’s (DoE) e-Power Mo program, the Public Utility Vehicles modernization program of the Department of Transportation, and other renewable energy initiatives.
Meanwhile, inflation in Areas Outside National Capital Region (AONCR) was higher at 6.8 percent in September compared with previous month’s 6.2 percent.
Among the regions in AONCR, the highest annual inflation of 10.1 percent remained in Region V (Bicol Region), while the lowest of 4.5 percent was still noted in Region III (Central Luzon).
National Statistician and PSA head Lisa Grace Bersales said she believed that most regions affected by typhoons and the availability of agricultural and food products were those highly impacted by higher prices.
“I would like to think that Central Luzon has this really good inflation report because they are our rice-producing region, (these are) not too much affected by typhoon and also near NCR. It’s the mobility of goods that would help a lot,” she told reporters. (PNA)
