Overall inflation is expected to continue its downtrend in the coming months following the easing of inflation rate in June, according to the National Economic and Development Authority (NEDA).
The previous “extreme” conditions, such as the El Niño phenomenon, which impacted inflation are unlikely to be experienced for the rest of the year, NEDA Secretary Arsenio Balisacan told reporters last Friday.
“I cannot say the worst is over, but I think that the extreme situations are not likely anymore,” Balisacan said.
“Overall inflation, yes, I would expect (the downtrend to continue in the coming months. The performance of) non-food was quite favorable, (its) price movements in the last month. Hopefully, we can manage that, (that there are no) unforeseen price increases coming from the utilities,” he added.
The NEDA chief also expressed optimism for food inflation, even as it remains elevated.
“I think we expect in the coming months (for food inflation) to come down, because the El Niño is over. (I’m) hoping that the La Niña will not bring severe flooding and all that. And I think that prices will start to moderate, so I think it will enable us to still achieve the inflation target of two to four percent,” Balisacan said.
The Philippine Statistics Authority (PSA) reported last Friday that the country’s inflation rate eased to 3.7 percent in June 2024, down from 3.9 percent the previous month.
A significant factor contributing to this slowdown is the sharper deflation in electricity, which led to a reduction in the inflation rate of housing and utilities.
In addition, transport inflation decelerated primarily due to lower inflation rates in personal transport and gasoline.
On the other hand, food inflation rose at 6.5 percent in June from 6.1 percent in the previous month, mainly driven by higher prices of vegetables and meat.
While rice inflation slightly declined, it remained high at 22.5 percent in June from 23 percent in May.
Meanwhile, Balisacan was also asked to comment on reports that the country is the most coal-dependent in Southeast Asia, based on data released by energy think tank Ember which showed that the Philippines’ dependence on coal-fire power rose by 62 percent in 2023, surpassing Indonesia and China.
Balisacan said there is a chance that moving forward, the prices of renewables will decline, making it more affordable.
“But in the meantime, we have to buy time, and buy time meaning we can’t force our country to transition quickly to a fully renewable or dominantly renewable. We have to be realistic, we have to work on policies that quite reflect the conditions of our local economy. So we can’t just adopt those mentioned (and implemented) by very rich countries, because we’re not in the same situation, we’re not as rich as they are,” Balisacan said.
“We don’t have the technology, we don’t have the finances. So what we are saying when we committed to this is we’re going to achieve this, on the condition that we have access to technology, we have access to finances, but those… are so slow in coming. Many, not just us, developing countries that have those issues,” he added.
Balisacan said the country’s ability to meet its obligations are also contingent on the commitments of other development partners, including developed countries.
