The country’s inflation rate is seen to continue its downward trend in the remaining months of the year, although possible risks remain.
The Philippines’ July inflation rate is scheduled to be announced next week, and National Economic and Development Authority Secretary Arsenio Balisacan expects to see further easing in the numbers.
“I think so. I think it should continue, the downward trend,” Balisacan said on the sidelines of the Bangko Sentral ng Pilipinas’ 30th Anniversary Reception for the Banking Community held Friday evening.
The country’s inflation rate slowed down for the fifth consecutive month in June, registering its lowest rate in 13 months.
Inflation eased further to 5.4 percent in June 2023 from 6.1 percent in May 2023, marking the lowest rate since June 2022.
Balisacan earlier said the figure can decline further to within two to four percent by the end of the year.
While the goal is to continue seeing this downtrend, Balisacan acknowledged the possible risks ahead.
“We are seeing the oil prices going up a bit, right? We see that… Russian move on Ukrainian exports of grains… but I suspect that it will not be as bad in terms of… reaction of the markets as before because I suppose that, you know, the world learned from those earlier shocks. But we’ll see. It’s hard to predict what comes next after that,” he added.
As for the impact of Typhoon Egay on inflation, Balisacan said the government’s assessment is still ongoing.
“That’s really a very serious concern because… we never expected this kind of seriousness in the flooding. They’re monitoring the situation especially regarding the impact on agriculture because it’s flooding in the Ilocos Region. Benguet has also been hit hard and that’s where a lot of vegetables come from, right? But we’ll see,” Balisacan said.
The government attributes the slowdown in inflation in June to slower food inflation, which declined to 6.7 percent from 7.5 percent in the previous month. Non-food inflation likewise decelerated to 4.1 percent in June from five percent in May 2023.
The slowdown in food prices is due to slower inflation of meat, eggs and dairy products, and bread and other cereals.
“The government remains committed to protecting the purchasing power of the Filipino people by ensuring food security, reducing transport and logistics costs and lowering energy costs for Filipino households,” Balisacan earlier said.
“The Inter-Agency Committee on Inflation and Market Outlook will continue to take proactive steps to address the main causes of inflation. This is particularly important considering the impending El Niño, which poses risks to food supply and prices,” he added. – Angela Celis
