Marcos says PH headed in right direction on inflation
MANILA (3rd UPDATE) — Inflation in May slowed for the fourth straight month as fuel prices, transport costs and prices of select food products eased, the state statistics bureau said on Tuesday.
The consumer price index rose 6.1 percent, which was slower than the 6.6 percent rate in April, the Philippine Statistics Authority said.
May's inflation is within the 5.8 to 6.6 percent estimate of the Bangko Sentral ng Pilipinas
Gasoline prices were down an average of 18.5 percent year on year in May compared to being down 11 percent in April. Diesel prices registered an even bigger average decline at 27.6 percent in May, from a decline of 20 percent in April.
Transport costs fell 0.5 percent in May, after rising 2.6 percent in April, the PSA said.
The decline in transport costs was responsible for more than half of the decline in last month's inflation rate.
Food and non-alcoholic beverages registered a lower inflation rate of 7.4 percent for the month, from 7.9 percent in April, the PSA said.
"Nakita natin sa datos na pababa na ang ating inflation rate… ang nakikita naming trend is that its on a downward trend, however, may mga risk pa rin tayo while the major contributors sa increase in inflation ay nag reverse na yung trend," National Statistician Dennis Mapa said.
(We've seen from the data that inflation is going down. We're seeing a downward trend, however, there are still risks)
Core inflation, which excludes select food and energy items, in May also eased to 7.7 percent from 7.9 percent in April, data showed.
“We’re seeing a drop in core inflation. May mga items kasi na mahirap pababain…for example personal care, rental prices… This is what we’re really monitoring, items that are non-food because there are really items there na nahihirapan ibaba,” Mapa said.
However, May's inflation rate remains above the government target of 2 to 4 percent. Average inflation from January to May stood at 7.5 percent.
In a video statement, President Ferdinand Marcos, Jr. said the improving inflation rate signifies how the administration's solution to this is "in the right direction."
Video from the Presidential Communications Office.
He added this was an "encouraging" news for the Philippine economy, just as the country's employment rate improved.
"Tama naman yata ang ating ginawang mga polisiya para buhayin ulit at gawing masigla ulit ang ating ekonomiya,” said Marcos.
“Sa ngayon, ‘yung growth rate natin ay maganda pa rin at siguro isa na sa pinakamaganda sa buong mundo ang ating growth rate. So lumalaki nang lumalaki at sumisigla ang ating ekonomiya,” he added.
The trade department, for its part, told Palace reporters that further solving inflation woes include "removing the bottlenecks" most especially in the supply chain.
Big harvests, for example, could not reach where the demand is.
"Ang solusyon doon is to make sure that the logistics are available to be able to deliver the harvest where the demand is," Trade Secretary Alfredo Pascual said.
"Pero ang major basis din o cause noong decline in inflation rate is iyong pagbaba ng mga prices ng oil for example, and other commodities that we are importing, pati presyo ng coal for example for power generation," he added.
In a statement, the BSP said the balance of risks to the inflation outlook remains tilted to the upside due to supply challenges, potential impact of El Niño on food prices and utility rates as well as possible adjustments in transport and wages.
The Monetary Board kept the benchmark interest rate at 6.25 percent in May partly due to the downward inflation trend.
"The Monetary Board will review its assessment of the inflation and macroeconomic outlook in the monetary policy meeting on 22 June 2023.
Economic managers have said inflation could decelerate to within the 2 to 4 percent target rate late this year," the central bank said.
“We are confident that we can achieve the government’s inflation target this year as we work closely with concerned government agencies in monitoring the primary drivers of inflation,” said National Economic and Development Authority Secretary Arsenio M. Balisacan.