Inflation could fall to as low as 2 percent in the third quarter as measures rolled out by the government to boost food supply will further stabilize consumer prices, according to Budget Secretary Benjamin E. Diokno.
Diokno also told reporters in a news briefing on Wednesday that inflation in the second quarter may fall within the 2-4 percent target range of the government. He said, however, that the average rate in the first quarter may breach the target as the Philippines is “coming from high inflation figures.”
Inflation in 2018 averaged 5.2 percent, the highest since 2009 when the rate settled at 4.2 percent.
But the Budget chief said inflation has been tapering off in recent months. Last month the rate eased to 4.4 percent, from 5.1 percent registered in December.
“That’s a significant drop already. If you look at month-on-month, that’s negative already,” said Diokno, who also chairs the Development Budget Coordination Committee.
Figures from the Philippine Statistics Authority (PSA) showed that while the January inflation rate was slower than the December figure, it is still higher than last year’s 3.4 percent.
Excluding select food and energy items, core inflation in January was also at 4.4 percent.
In a joint statement, the National Economic and Development Authority, Department of Finance, and Department of Budget and Management said inflation will further ease in the coming months and settle at 3.2 percent and 3 percent in 2019 and 2020, respectively, as projected by the Bangko Sentral ng Pilipinas.
This, as they continue to push for the full implementation of nonmonetary and administrative measures to stave off possible supply bottlenecks that have caused prices of key agricultural commodities to surge last year.
The government is also currently looking for ways to improve the farm sector after its output grew by only 0.8 percent last year.
While the hike in consumer prices was slower in January, local economists believe that the country’s inflation woes are still far from over.
University of Asia and the Pacific School of Economics Dean
Cid Terosa told the BusinessMirror earlier that the upcoming elections could
still trigger an increase in prices, aside from a possible increase in world
pump prices and adjustments to fuel excise taxes due to the Tax Reform for
Acceleration and
Inclusion law.
IBON Foundation Executive Director Jose Enrique A. Africa also echoed Terosa’s concern, saying he also does not believe that inflation will settle within the government’s target of 2 to 4 percent this year.
Image credits: Nonie Reyes