Uninterrupted supply chain during COVID-19 lockdown key to keeping inflation low, says DOF

The Department of Finance (DOF) sees inflation further easing in the near term but only if supply chains remained undisrupted by local lockdowns against COVID-19.

In an economic bulletin on Wednesday (April 8), Finance Undersecretary Gil S. Beltran said prices of nonfood commodities fell last March “benefitting from lower energy and utilities prices” as a result of global fuel price declines.

March headline inflation of 2.5 percent year-on-year was the lowest so far this year, bringing the three-month average to 2.7 percent or well within the government’s 2-4 percent target range.

Average food price increases, however, moved faster last March because of higher fish and vegetable costs. Rice prices continued to fall, though.

The year-on-year decline in prices of rice—a Filipino staple food—had been uninterrupted for 11 straight months after restrictions on imports were removed by the Rice Tarrification Act which took effect in 2019.

Prices excluding food and energy, which weighed heaviest in consumers’ spending basket, recorded a 3.05 inflation rate down from more than 3.2 percent last February.

The figures indicated “easing inflation in the next few months,” Beltran said.

He added, however, that “it is important that in this time of expanded community quarantine, the supply of chain of basic goods and other necessary items should not be broken” even if subject to quarantine rules.

Bottlenecks at checkpoints—manned by police and military at the borders of local governments with their own lockdowns—had disrupted the transport of goods.

Edited by TSB