Food prices no longer an issue, says DOF
With more imported pork and rice coming in, the Department of Finance (DOF) sees an end to elevated food inflation this month.
Food prices are expected to ease steadily as imports rise to boost domestic supply.
However, Finance Undersecretary and chief economist Gil Beltran said “bolstering food productivity is necessary for long-term food price stability.”
Beltran, in an economic bulletin, noted that food inflation was steady in June at 4.9 percent year-on-year, similar to the rate in May.
Last month, “the average prices of rice, fruits, and vegetables declined by 1.1 percent, 0.64 percent, and 2.71 percent, respectively, muting the higher-than-average inflation in the prices of meat (19.24 percent) and fish (8.66 percent)” compared to year-ago levels, Beltran said.
Month-on-month, food prices eased by 0.07 percent in June mainly as meat and fish prices declined 0.32 percent and 0.89 percent, respectively, compared to levels last May, Beltran added.
State planning agency National Economic and Development Authority (Neda) last week reported that supplies of rice, chicken, fish and pork were expected to be ample up to year-end. Neda had said rice and pork supply would be boosted by President Duterte’s recent executive orders, which allowed increased importation of these Filipino food staples at lower tariffs.
Expensive pork due to tight supply caused by the African swine fever crisis had pushed headline inflation above the Bangko Sentral ng Pilipinas’ target range of manageable increases in prices of basic commodities. Headline inflation averaged 4.4 percent during the first half, above the 2-4 percent target band.
As for oil, Beltran said recent prices trended up “as global recovery boosts oil demand.”
“Transport and electricity inflation rose as Dubai crude oil price surged to $70.96 per barrel in June, up 7.5 percent from $65.98 in May 2021 and 76.8 percent from $40.14 per barrel in June 2020 as global demand rises,” Beltran noted.
For Beltran, “a quick pass-through of international crude oil prices on domestic prices is desirable since the country is an oil importer.”
“The use of more energy-efficient technologies has allowed the country to trim down the impact of oil-price adjustments on domestic inflation,” according to Beltran.
