MANILA -- The government remains watchful of any potential upticks in prices even as inflation eased to a 16-month low last month, the National Economic and Development Authority (NEDA) said Tuesday.
Socioeconomic Planning Secretary and NEDA Director General Ernesto Pernia said government economists are on the lookout for El Niño-related price spikes, possible increase in utility rates, and volatility in international oil prices.
“Given unstable global oil prices, the government should prioritize rolling out the second tranche of its social mitigating measures under the TRAIN (Tax Reform for Acceleration and Inclusion) law, such as the unconditional cash transfer and Pantawid Pasada, especially now that the 2019 national budget has already been signed into law,” he said in a statement.
The Philippine Statistics Authority (PSA) reported that headline inflation further slowed to 3 percent in April from 3.3 percent in March.
This was well within the Bangko Sentral ng Pilipinas’ (BSP) forecast of 2.7 to 3.5 percent for the period.
“The recent inflation reading validates our efforts towards stabilizing inflation so that the country’s buoyant economic growth, along with key reforms, remains unimpeded,” Pernia said.
ING Bank senior economist Nicholas Mapa said inflation continues to decelerate even ahead of the implementation of rice tarrification law (RTL) and amidst an oil price surge and the El Niño dry spell.
“For as long as the food sub component remains in check, overall inflation will likely be within target. Favorable base effects will also mean BSP’s own inflation target of 3.0 percent is becoming an increasing likelihood,” he said.
The PSA attributed mainly the easing of inflation to the slower annual increase in the heavily-weighted food and non-alcoholic beverages index at 3 percent, as price adjustments in key food items such as rice, meat, and fish further slackened.
“The continued low inflation of rice can be attributed to the stable rice supply in the country, with more imported rice expected to arrive in the country as the Rice Liberalization Act takes effect,” Pernia said.
The law, which lifts the quantitative import restriction on rice, is expected to keep rice prices low and more affordable especially for low-income households.
Of the commodity groups, transport component increased slightly to 3.8 percent in April 2019 from 3.3 percent the previous month.
PSA Assistant Secretary Josie Perez attributed higher transport prices to the increase in ship and ferry rates as more people travelled for Holy Week and summer vacation.
Meanwhile, a downtrend in the inflation in National Capital Region (NCR) was also recorded at 3.1 percent last month from 3.2 percent in March 2019.
Annual inflation in Areas Outside NCR continued to move slower at 3 percent in April 2019 from 3.4 percent the previous month. (PNA)
