MANILA -- Economic managers are optimistic the downward path of inflation will continue for the rest of the year on the back of reforms recently rolled out, after the country’s inflation declined to an 11-month low of 3.8 percent in February 2019.
“(Last month’s inflation) shows the government’s resolve coupled with the appropriate measures to rein in inflation,” they said in a joint statement.
The economic team cited the recent enactment of the Rice Industry Modernization Act (RA 11203), which is expected to bring down rice prices and cut inflation by 0.5 to 0.7 percentage point this year and 0.3 to 0.4 percentage point next year.
“Our work does not stop here. We must ensure that the change to a rice tariff regime—from government-led to market-led—is seamless and fast. The crafting and promulgation of the Implementing Rules and Regulations or IRR of the new law, as part of the first steps, are now underway. The new regime will include the operationalization of a National Single Window system, which will facilitate seamless trade transactions,” they said.
They also vowed that the government would take pro-active measures to mitigate the adverse impacts of El Niño on the agriculture sector in the immediate term, and to increase its resiliency against extreme weather conditions over the medium to long term.
Economic managers noted the sharp deceleration in inflation for transport to 1.2 percent in February 2019 from 2.5 percent in the corresponding month last year despite the increase in fuel excise tax.
“We will also remain watchful of developments in the global oil market. While prices have already gone up by around PHP7 to 8 since the start of the year, current domestic fuel prices are still relatively lower compared to pump prices in 2018, even including the second round of increases in fuel excise tax this year,” they said.
They thus underscored the need for the Land Transportation Franchising and Regulatory Board to increase its efforts to cover more of the targeted beneficiaries of the Pantawid Pasada Program in order to temper possible demand for transport fare increases should oil prices continue to go up.
In a press briefing Tuesday, Philippine Statistics Authority (PSA) Deputy National Statistician Josie Perez mainly attributed the decline in last month’s inflation to food and non-alcoholic beverages, alcoholic beverages and tobacco, and transport.
“The main driver in the downtrend in February inflation is food and non- alcoholic beverages brought about by the lower prices of rice, corn, meat, milk, cheese and egg, fruit and vegetables,” she said.
Rice inflation significantly moderated to 2.9 percent from 4.7 percent in January 2019 on the back of stable rice supply.
Last month’s inflation rate was within the government’s 2 to 4-percent target after hitting record highs late last year.
Inflation in January 2019 was higher at 4.4 percent, while it was the same as the February 2018 at 3.8 percent.
This brings the year-to-date average inflation to 4.1 percent.
The PSA reported that inflation in National Capital Region (NCR) also slowed down further to 3.8 percent in February 2019 from 4.6 percent the previous month.
The same trend was also recorded in the inflation for areas outside NCR as it eased further to 3.8 percent last month from 4.4 percent in January 2019. (PNA)
