THE National Economic and Development Authority (Neda) does not expect inflation to exceed 3.4 percent in March 2024 given the slower-than-expected progress on the legislated wage.
Socioeconomic Planning Secretary Arsenio M. Balisacan told reporters that the legislated wage being proposed by the Senate of the Philippines and the House of Representatives has the potential to fan inflation.
On Wednesday, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. said inflation in March may have been around 3.9 percent. (See: https://businessmirror.com.ph/2024/03/21/bsp-inflation-could-have-hit-3-9-in-march/).
“I don’t think that it will go higher than what we had last month. Especially that this push for, you know, legislated wages, did not appear to be gaining ground,” Balisacan said.
The Neda Secretary reiterated the oversight agency’s position that wages should be set through a tripartite decision between the government, employers, and workers.
Balisacan added that the recent growth of the economy has benefitted workers nationwide, indicating that wages have somewhat caught up with the needs of workers.
Nonetheless, Balisacan recognized the need to grow the economy faster in order to benefit more workers. He said allowing incomes to double in five or seven years requires nothing less than sustained growth.
“Hindi naman totoo na hindi nakikinabang ang workers natin sa growth. The economy is growing, hindi naman totoo na hindi nakikinabang, makikita mo naman [It’s not true that workers don’t benefit from growth. The economiy is growing, you can see that they are benefiting, you can see it]. But of course, it will take many years of growth for us to be able to change from bicycle to motorcycle,” Balisacan sad.
Meanwhile, in order to better manage commodity prices, the Neda said the national government should already implement the national information network (NIN) to allow for better price monitoring efforts.
Neda Undersecretary for Policy and Planning Rosemarie G. Edillon said that while there is a provision in the proposed livestock market bill for the NIN, the government does not need to wait for the passage of this law.
Edillon said the NIN is already provided for in the Agriculture and Fisheries Modernization Act of 1997 and as such can already be implemented.
While the design for the NIN is still being conceptualized, it can actually adopt a “Waze-like” system where information about prices can be crowdsourced from traders and planters.
“What we want to do is,come up with some sort of marketing information real time. So, not like inflation because inflation is one month delayed, right? So, this one is real time and more disaggregated. But of course, it’s still on pilot,” Edillon said.
BSP’s inflation target is 2 to 4 percent for 2024. Inflation in February increased to 3.4 percent from 2.8 percent in January. Inflation was at 7.6 percent in March 2023.
If the March inflation rate reaches 3.9 percent, this will mark the fourth month that the inflation rate was within the BSP’s 2 to 4 percent target.
Inflation first fell within BSP’s target in December 2023 at 3.9 percent, followed by January 2024 at 2.8 percent, and February 2024 at 3.4 percent.