Inflation eases to slowest in 12 months

Inflation further eased to 3.8 percent year-on-year in February, the slowest rate of increase in prices of basic goods in a year.

The inflation rate last month returned within the government’s full-year target range of 2-4 percent after 11 straight months of above target rates, the latest Philippine Statistics Authority (PSA) data released on Tuesday showed.

But headline inflation averaged 4.1 percent during the first two months, still beyond the target range.

Inflation last February matched the same 3.8 percent posted in February last year.

PSA Deputy National Statistician Josie B. Perez told a press conference that consumer prices last month inched up 0.1 percent compared to January levels, hence posting the same month-on-month increase as in January.

Perez said the following commodity groups posted slower year-on-year price increases: food and nonalcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; housing, water, electricity, gas, and other fuels; furnishing, household equipment and routine maintenance of the house; health; transport; recreation and culture, and restaurant and miscellaneous goods and services.

Prices of petroleum and fuels for personal transport equipment, domestic air fare and ferry or ship fare slid in February, she added.

In a joint statement, the Duterte administration’s economic team said the lower February rate “[showed] the government’s resolve coupled with the appropriate measures to rein in inflation.”

“We are confident that the successive reforms recently rolled out will sustain this [slowing inflation] environment and support the growth of the Philippine economy,” Socioeconomic Planning Secretary Ernesto M. Pernia, Finance Secretary Carlos G. Dominguez III and outgoing Budget Secretary Benjamin E. Diokno said.

“We are optimistic that the downward path of inflation will continue for the rest of the year. This will be backed by the recent enactment of the Rice Industry Modernization Act (Republic Act No. 11203), which is expected to bring down rice prices and cut inflation by 0.5-0.7 percentage point this year and 0.3-0.4 percentage point next year,” they said.

“Rice inflation significantly moderated to 2.9 percent from 4.7 percent in January on the back of stable rice supply. Based on the monitoring of the PSA, prevailing retail prices of regular-milled rice has now declined by around P5 since it peaked in September 2018,” they added.

However, the economic managers warned that a prolonged dry spell due to El Niño might hamper food production in Metro Manila and 19 provinces expected to be affected by drought until June.

“The government must take proactive measures to mitigate its adverse impacts on the agriculture sector in the immediate term and to increase its resiliency against extreme weather conditions over the medium to long term,” according to the economic team.

Malacañang said it was optimistic that inflation would continue to drop in the coming months. Presidential spokesperson Salvador Panelo said the government would continue its vigilance in monitoring prices of basic goods as it works to further bring down inflation.

Last year, President Duterte issued several anti-inflation measures to help curb the rising prices of food. These include an administrative order streamlining procedures on importing agricultural products including rice, and memorandum orders aimed at stabilizing prices and supplies of agricultural and fish products in the markets.  —WITH A REPORT FROM JULIE M. AURELIO