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Friday, June 06, 2008
Gov't calls for unity v. high inflation rate
MANILA -- Malacañang called on the business and other key sectors to work with the government to help the country get over the hump as the inflation rate, pushed by skyrocketing prices of oil and food, soared to 9.6 percent last month.
Secretary to the Cabinet Ricado Saludo said the latest inflation rate, which is the fastest acceleration in more than nine years, underscores the need for everyone from the government to business and other private key sectors to work together to boost production, conserve resource, and sustain growth in the country.
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Saludo said this is necessary to "protect our living standards and competitiveness against the global escalation of prices."
The Malacañang official added that the government had already taken major steps to help the public and companies to cope with the effects of inflation, which include the recently launched P4 billion "Katas ng VAT" (value-added tax) subsidy programs.
He said other measures include the spending of more than P6 billion for the National Food Authority-subsidized rice, the government support for petitions to lower the electric rates, and the tightening of measures against hoarding.
According to Saludo, another important measure is the continued construction and rehabilitation of major infrastructures like roads and ports and irrigation systems. This aims to help reduce transportation costs especially for food distribution and increase food production.
The National Statistics Office said the May 2008 inflation reached 9.6 percent, the highest since January 1999, after consumer prices rose to 10.5 percent. This is higher than April's inflation rate of 8.3 percent, and in May 2007's 2.4 percent.
The new data raises the average inflation rate for the January-May period to 6.9 percent, well above the central bank's target range of three to five percent for the whole year.
Banking giant HSBC said the latest figure suggested inflation "may breach into double-digit territory before dropping back on account of easing global commodity prices and slowing economic activity."
HSBC said the data underpinned expectations that the central bank will raise its key interest rate by 25 basis points at a meeting later Thursday.
The recent surge in domestic inflation has undermined the value of Philippine assets, sending stocks and the peso lower.
The Philippine Stock Exchange Index tumbled two percent Thursday to a 19-month low of 2,718.42. The peso dropped to a new eight-month low of 44.10 against the US dollar. (JMR/Sunnex/With PNA and AP)
For more Philippine news, visit Sun.Star Cagayan de Oro. (June 6, 2008 issue)
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