August inflation eases to 2.4%

MANILA, Philippines — Ample food supply amid COVID-19 quarantine helped ease inflation to a three-month low of 2.4 percent year-on-year in August, the government reported Friday.

In particular, National Statistician Claire Dennis S. Mapa told a press briefing that the rate of increase in prices of fish and meat slowed last month, while vegetable prices declined by 0.9 percent year-on-year.

Mapa said there was enough supply of fish and vegetables while nationwide rice prices posted the 16th straight month of deflation even as the price of the Filipino staple food inched up by 0.6 percent year-on-year in Metro Manila.

Food and non-alcoholic beverages, which accounted for 36 percent of the consumer price index (CPI), posted a 1.8-percent inflation in August, down from 2.4 percent in July.

Despite Metro Manila and four neighboring provinces reverting to modified enhanced community quarantine on Aug. 4 to 18 following a surge in COVID-19 cases as the economy gradually opened up, Mapa said there was no shock nor spike in prices, especially of food during the two weeks of more stringent lockdown in areas comprising half of the domestic economy.

However, restrictions on mass transportation amid social distancing even as more workers resumed their jobs since June retained elevated transport inflation in August, which at 6.3 percent year-on-year was the same rate as in July.

Mapa said tricycle fare jumped 37.4 percent year-on-year last month, while ferry and ship fares climbed 31.6 percent. Jeepney fare also rose by 2.6 percent.

In Metro Manila, transport inflation inched up to 11.9 percent year-on-year from July’s 11 percent.

While the transport sector accounted for only 8 percent of the CPI basket, the sharp increases in public transportation fares contributed 22.5 percent to the total inflation uptick in August.

On a month-on-month basis, August prices declined by 0.2 percent compared to July levels as food items were cheaper by 0.5 percent.

Since poor families spent the bulk of their budgets to buy food, the inflation rate among the bottom 30-percent income households also eased to a five-month low of 2.7 percent year-on-year last month.

Philippine Statistics Authority data showed that food inflation among the poor declined to 1.1 percent in August from 1.5 percent last July as the rice, corn, vegetables as well as sugar, jam, honey, chocolate and confectionery they purchased posted year-on-year price drops.

In a statement, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua attributed the steady end-August average inflation of 2.5 percent—within the government’s 2 to 4 percent target band—to “unhampered movement of food and other essential commodities across the country as well as the benefits of the rice tariffication law, ensuring ample supply.”

Moving forward, Chua said that “as we continuously implement varying levels of community quarantines and localized lockdowns in the country, we need the government and the private sector to tap local agricultural produce and maximize the use of digital technologies to ensure stability in the supply chain.”

Investments in cold storage facilities and innovations in food packaging and processing need to be increased as well, alongside the boosting of agricultural production, both in rural and urban areas, through the government’s ‘Plant, Plant, Plant’ program, added Chua, who heads the state planning agency National Economic and Development Authority.

The Neda chief nonetheless flagged a possible drag on food production by the wet La Niña season expected to be felt as early as later this month or next month, hence “the need for preemptive preparations on production support, crop insurance, and other recovery programs.”