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Inflation hits 6-month high

Jump to 2.7% in July traced to higher transport costs
By: - Reporter / @bendeveraINQ
/ 05:22 AM August 06, 2020

The lack of public transportation while more Filipinos returned to work during the gradual easing of the lockdown pushed transport costs higher for the second straight month in July, pushing inflation to a six-month high of 2.7 percent year-on-year, the government reported on Wednesday.

The latest Philippine Statistics Authority data showed that the rate of increase in prices of basic commodities last month was the fastest since the 2.9 percent posted in January.

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Month-on-month, consumer prices in July inched up 0.4 percent from June.

The July headline rate brought the seven-month average to 2.5 percent, within the government’s 2-4 percent target range.

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In particular, transport inflation jumped to 6.3 percent last month from 2.4 percent a month ago, when most parts of the country were placed under a less-restrictive general community quarantine (GCQ).

National Statistician Claire Dennis Mapa said that the average nationwide tricycle fare rose 33.9 percent year-on-year in July, faster than June’s 26.8-percent increase.

In Metro Manila, for instance, the average tricycle fare per person skyrocketed to P17 last month from P8.50 a year ago, Mapa noted.

Domestic airfare increased 12.6 percent year-on-year in July, while ferry and ship fares rose 27.7 percent.

Jeepney fare also inched up by 2.5 percent last month.

While 75 percent of the economy resumed under GCQ, public transport did not keep up with demand due to remaining social distancing restrictions to prevent COVID-19 from further spreading.

But as Metro Manila and four provinces reverted to a stricter modified enhanced community quarantine (MECQ) to give health and medical front-liners some time-out amid the rising number of infections, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a statement that “we need to remain vigilant and ensure that strategies are well-placed to ensure stable supply and delivery of essential commodities in all parts of the country.”

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“We need to ensure a smooth functioning of checkpoints, continued implementation of food resiliency protocols, extended provision of mobile markets and constant encouragement on the use of digital marketing platforms, especially in the areas where MECQ was reimposed,” said Chua, who heads the state planning agency National Economic and Development Authority.

“We also need to guard against the spread of animal-borne diseases through strengthened border control and phytosanitary measures and be well-prepared for upcoming typhoons this year to prevent loss of lives and mitigate damage to the economy,” Chua added.

In July, food inflation slowed to 2.5 percent from 2.7 percent in June, as rice continued to post a deflation, or year-on-year decline in prices, of 1.2 percent—the 15th straight month since rice trade was liberalized last year, Mapa said.

The slower increase in food prices augured well for poor families, whose basket of goods included more food items, Mapa noted.As such, the consumer price index for the bottom 30-percent income households slightly eased to 2.9 percent in July from 3 percent in June, but higher than the 2.5 percent recorded a year ago.

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TAGS: Inflation, lockdown
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