MANILA, Philippines — At least two lawmakers from the House of Representatives majority remained optimistic about the economy despite headline inflation rates crawling up again in September 2023, saying that the situation would normalize soon.
In a statement on Thursday, economist and Albay 2nd District Rep. Joey Salceda said that the main drivers of the 6.1 percent inflation rate year-on-year increase for September 2023 were the higher cost of rice and oil prices.
Salceda, who heads the House committee on ways and means, maintained that the said figures are merely a “snapshot of the past,” as the situation has started to normalize — adding that this might be the worst number for the ‘-Ber’ months.
“The September inflation figure is due almost entirely to rice price spikes and the global oil price spike. The PSA (Philippine Statistics Authority) collects data on the first five days of the month, and on the 15-17th days, so it captured a lot of the speculative rise in global oil prices, but not the sharp declines that followed September 27,” he said.
“So, this is a snapshot in time past, and we have to analyze it in that light. The weeks after data collected were entirely better, and we’ll catch that next month. In other words, this is probably the worst inflation rate we will record for the -Ber months, and it gets better from here,” he added.
READ: Inflation climbed up some more in September, says BSP
Salceda claimed that while prices of rice grains went up by a steep 17.9 percent on a year-on-year basis for September, world prices also went down drastically after September 27.
“So, the September figures also do not capture the sudden decline in world prices. Correctly, President [Ferdinand] Marcos [Jr.] has also already lifted the rice price cap under EO [Executive Order No.] 39, as both global and local conditions have since become more manageable,” he explained, referring to the now-lifted P41 per kilogram cap on regular-milled rice.
“In short, things have gotten better, and the data didn’t capture it yet because the methodology covers the first half of the month. Expect it captured in the October figures,” he added.
Quezon 1st District Rep. Wilfrido Mark Enverga, another House committee chairperson, said that inflation has already peaked and that the country will see a downward trend even during the holiday season.
“We believe that inflation has peaked, and we expect it to be on a downward trend because of the forthcoming harvest season. As the earth yields its bounty, we anticipate a steady decline in inflation rates,” said Enverga, who heads the House committee on agriculture and food.
“As the harvest season approaches, we can anticipate stabilization and, eventually, a decrease in inflation rates. Our nation’s agricultural sector is a cornerstone of our economy, and the bountiful harvests ahead will undoubtedly have a significant impact on curbing inflation,” he added.
Enverga also said that President Marcos’ commitment to revitalizing agriculture bodes well for food security and lowering prices.
“The President’s commitment to revitalizing agriculture and rectifying past deficiencies is undeniable. By investing in infrastructure, technology, and sustainable farming practices, we are not only improving the livelihoods of our farmers but also fortifying the foundation of our economy,” he noted.
The lawmakers’ positive projections on the Philippine economy are shared by House Speaker Ferdinand Martin Romualdez, who said on Wednesday that inflation figures are about to go down by 2024 and 2025.
This was part of the Speaker’s message at the Forum on Legislative Reforms for the Philippines Capital Market at the Philippine Stock Exchange Tower.
READ: Romualdez: PH economy resilient despite global slowdown, inflation to ease in coming years
Despite the optimistic outlook, Salceda warned the government that risks regarding inflation should still be managed.
“I think the risk of further oil spikes has come to pass. Weak demand has undercut the efforts of OPEC (Organization of the Petroleum Exporting Countries) countries to boost prices with supply cuts. So, expect oil to be in the neighborhood of just 70-80 USD per barrel over the coming weeks,” Salceda said.
“But food prices still need to be watched out for, especially because the -Ber months typically tend to be bonus season, which is naturally inflationary. With sufficient food, we can manage the inflationary impacts of sudden injections of income among employees,” he added.
READ: NEDA chief: Gov’t ready to give ‘targeted aid’ amid high inflation