Duterte addressed high inflation the fastest since Arroyo time
The Philippines had bouts with high consumer prices four times during the past 15 years, but it was the Duterte administration that resolved elevated inflation the fastest after the rate hit a 10-year high last year, the Department of Finance (DOF) said Monday.
Citing a recent report to Finance Secretary Carlos G. Dominguez III from its chief economist, Undersecretary Gil S. Beltran, the DOF said the headline inflation rate was already on a downtrend and returned within the government’s 2 to 4 percent target range within 11 months even as it averaged 5.2 percent last year.
The rate of increase in prices of basic commodities reached 4.3 percent in March 2018—breaching the target band, before easing to 3.8 percent last February.
In comparison, Beltran said it took the Arroyo administration 31 months to bring down inflation from above 4 percent—starting with 4.1 percent in June 2004 to 3.8 percent in January 2017.
Also under former President Gloria Macapagal-Arroyo, headline inflation hit 4.6 percent in January 2008 and it was only in June 2009 that the rate fell below 4 percent to 3.2 percent, or 17 months of above 4-percent inflation rate, Beltran added.
In January 2011 under former President Benigno Aquino III, inflation hit 4 percent and it took 13 months before it was brought down to 3 percent in February 2012, according to Beltran.
“In our case, the Duterte administration took 11 months to move it below 4 percent, so we did it faster,” Beltran said.
The DOF attributed the elevated inflation environment last year to the spike in crude oil prices, the adjustments to the normalization of interest rates by the US Federal Reserve, global trade tensions and food supply issues caused mainly by weather-related events.
“Rising domestic consumption as a result of more jobs created and lower personal income tax rates for individual taxpayers under the Tax Reform for Acceleration and Inclusion (TRAIN) Law had also initially influenced inflation,” the DOF added.
The DOF nonetheless pointed out that President Duterte himself moved to soften the inflation rate as he issued Administrative Order No. 13 to ease food importation and Memorandum Order No. 26 to cut the gap between farmgate and retail prices of agricultural goods last year. —BEN O. DE VERA
