June 05, 2019
Government must take proactive and long-term solutions to address the El Niño phenomenon, which caused consumer prices to inch up last month, the National Economic and Development Authority said.
The Philippine Statistics Authority reported today that headline inflation rate edged up slightly to 3.2 percent in May 2019 after posting a 16-month low in April. This compares to 4.6 percent recorded for May 2018.
While this was marginally above the median market forecast of 3.0 percent, it remained well within the Bangko Sentral ng Pilipinas’ forecast of 2.8 to 3.6 percent for the period.
The latest result brought year-to-date inflation to 3.6 percent, which still fell within the government’s full-year 2019 inflation target of 2.0 to 4.0 percent.
“Faster price adjustments in food and non-alcoholic beverages drove the uptick in headline inflation as weak El Niño conditions persisted, and brought significant damage to the agriculture sector in the midst of the election period’s strong consumption demand,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
Mirroring inflation at the national level, consumer prices in Metro Manila registered an uptick to 3.4 percent. This was slightly higher compared to the 3.1 percent in the previous month but lower than the 4.9-percent posted in the same month last year.
“El Niño is a recurring problem that requires an immediate and long-term response. The country needs to have a more robust solution to mitigate the impacts of extreme weather conditions and climate change considering that the Philippines is prone to natural disasters,” he said.
Pernia also flagged the threat of the African swine fever (ASF) entering the country, the increase of rice prices in the international market, and the volatility in global oil prices as upside risks to inflation.
“With the possible global pork shortage and the ban on importation of pork products from ASF-affected areas, domestic production of livestock should be beefed up to meet household and commercial demand,” he said.
With the influx of imported rice, on the other hand, Pernia urged the Department of Agriculture to increase its assistance to the less competitive rice farmers in their shift to planting other high-value crops.
“The Rice Competitiveness Enhancement Fund must be properly utilized in a timely manner to support the affected farmers as mandated by the rice tariffication law.
Government must also be ready to assist rice farmers wanting to export high quality rice,” he added.