Inflation may be on a downward trend but global risks, especially oil costs, are pushing up prices of basic goods and services, the Department of Finance (DOF) said.
“The continued deceleration in headline inflation is a welcome development. Still, the economy has to remain watchful,” the DOF’s chief economist and retired undersecretary Gil Beltran said in an economic bulletin on Thursday.
To recall, the 3-percent inflation rate recorded in January was the lowest in 14 months, under the updated consumer price index with 2018 as the new base year.
Beltran nonetheless noted that average January prices were almost 1-percent higher than December 2021 levels. Month-on-month inflation last month was also faster than the 0.4-percent hike in December versus November 2021 prices, as food and nonfood costs picked up, he added.
Beltran also pointed to rising fuel costs as the benchmark Dubai crude oil price averaged $83.1 per barrel in January, which he cited was the highest since November 2014.
As of Thursday, Brent crude further rose to $94.8 a barrel, while US WTI (West Texas Intermediate) crude also inched up to $93.7 per barrel.
Beltran said improving storage facilities would help ease transport costs amid upside inflation risks from elevated oil prices.
“Whereas transportation infrastructure geographically links farms and markets, storage smoothens consumption across time and between seasons. Storage infrastructure, especially cold storage facilities, are crucial in stabilizing food prices and help ensure food security,” Beltran said.
As such, Beltran pushed for the passage of the warehouse receipts bill which he said “will usher in the professionalization of the warehousing sector and contribute to food security.”