An undisrupted supply chain is key to ensuring that the rate of price increases will further ease in the near term, the Department of Finance said.
In an economic bulletin issued on Saturday, Finance Undersecretary and Chief Economist Gil Beltran noted that headline inflation softened to a five-month low of 2.2 percent year-on-year in April “largely due to nonfood items, which more than offset the acceleration in food prices.”
“The average price of nonfood items decelerated to 0.7 percent year-on-year as the slump in global oil prices drove down domestic pump prices and, consequently, transport costs,” Beltran noted.
However, “average food prices accelerated from 2.6 percent year-on-year in March to 3.4 percent in April, largely on account of upticks in the prices of vegetables (10.3 percent) and the month-on-month price increase in rice prices (1.4 percent),” Beltran said.
The faster increase in food prices had been blamed on supply chain disruptions amid the enhanced community quarantine (ECQ) imposed in Luzon and other parts of the country since mid-March to contain the spread of the coronavirus.
“Since November 2018, the average rice prices has been falling (such that month-on-month rice price change was negative) until March before registering positive month-on-month price change in April,” Beltran added.
Beltran expects inflation to further ease in the next few months, but “it is important that in this time of ECQ, the supply chain of basic goods and other necessary items, while subject to the requirements of public health, should not be broken.”Last week, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said that “we had several cases wherein food supply or other essential goods have not been able to pass through as the local governments impose stricter quarantine or checkpoints” during the COVID-19 lockdown.
“We will have to make sure the supply chain is not disrupted, so that we can continue this pace of inflation that is low and stable,” said Chua, who heads the state planning agency National Economic and Development Authority.—Ben O. de Vera INQ