MANILA - One of the Philippines' economic managers said on Thursday the 5.2 percent inflation seen in June was "unwelcome news" but said he expects it to "normalize" by the end of the year.
Socioeconomic Planning Secretary Ernesto Pernia blamed the faster-than-expected inflation on high world oil prices, peso depreciation, and the high price of rice.
Pernia said the government was working to cushion the impact of accelerating inflation through unconditional cash transfers to poor people, fuel subsidies for operators of public utility vehicles and the modernization of PUVs.
But he also said that while the high world oil prices and the depreciation of the peso were "external factors we have no control over," the government could bring down the price of rice by eliminating import quotas.
Imposing tariffs on rice instead of import quotas would result in lower prices, he added.
"Definitely we need to tariffy rice rather than continue to control importation of rice using quantitative restrictions," Pernia said in an interview with ANC's Market Edge.
Despite the higher-than-expected inflation, Pernia said they remain optimistic that country can hit its medium term growth target of 7 to 8 percent.
The Bangko Sentral meanwhile said it was reaffirming "its strong commitment to ensure that inflation returns to the 2-4 percent target range as soon as possible."