Inflation rose to 2.5% in June as economy reopens
With few public transportation available when most of the country moved to less-restrictive general community quarantine (GCQ), transport costs—especially tricycle fare—soared and jacked up headline inflation to 2.5 percent in June, the highest in three months.
National Statistician Claire Dennis S. Mapa told a press conference on Tuesday that as the economy gradually opened up last month, cost of transport, utilities as well as “sin” products such as cigarettes and liquors rose faster than in May, when still under enhanced community quarantine (ECQ)—said to be one of the most stringent lockdowns in the region.
Transport inflation increased to 8.4 percent in June from 1.3 percent a month ago.
In particular, nationwide tricycle fare inflation climbed to 26 percent year-on-year last June from May’s 6.6 percent.
Mapa said that in Metro Manila, the minimum charge per tricycle passenger rose by almost 44 percent to about P17 in June from P12 last May.
Year-on-year, average tricycle fare in the National Capital Region last month jumped 129 percent, Mapa said.
Mapa acknowledged that the increase in tricycle fares reflected social distancing restrictions such that a ride accommodated a fewer number of passengers, hence costing more per trip.
Fuel products still posted a deflation—lower prices compared to year-ago levels—of 15.1 percent, although a slower decline than May’s 28.8 percent as global oil prices recovered from a slump.
Some food items such as corn, meat and oil and fats saw faster year-on-year price increases in June, while inflation slowed for fish, fruits, vegetables and other cereals, flour and bread.
Rice continued to post deflation for the 14th consecutive month even as last June’s 1.9-percent decline was the smallest due to base effects. Sugar prices also eased year-on-year.
A separate Philippine Statistics Authority (PSA) report showed that among poor families, inflation reached a one-year high of 3 percent year-on-year in June.
“The transport index, specifically, tricycle fare index, which registered an annual increase of 4.8 percent during the month—from its annual rate of negative 2.3 percent in May—pushed up the June inflation for the bottom 30-percent income households,” the PSA said.
Last week, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua pushed to further increase availability of public transport to help ramp up economic activities, as long as health standards were strictly maintained.
Chua, who heads the state planning agency National Economic and Development Authority, had noted that while 75 percent of the economy had been opened under a GCQ setup, available public transportation did not even reach half of what was needed.
In a statement Tuesday, Chua said last month’s “moderate increase in inflation will help in the recovery of consumer demand as the economy gradually reopens.”
Malacañang is unfazed over the uptick in June’s inflation rate as it was still relatively low at 2.5 percent.
Presidential spokesperson Harry Roque attributed the slight increase to the gradual reopening of the economy last month as lockdown restrictions were eased.
“That is still pretty low. We expected it to rise because we just came from a complete lockdown,” Roque said in a press briefing on Tuesday.
He said there was a high demand but limited supply of goods as the economy reopened in areas under general community quarantine.
“That’s why the inflation rate slightly went up. But that is not worrisome because it’s only 2 percent,” Roque said. —WITH A REPORT FROM JULIE M. AURELIO INQ
