A LOCAL business leader said the upward movement in the region’s inflation rate has no adverse effect on business profitability and viability.
The Philippine Statistics Authority (PSA) reported that from 2.7 percent in April this year, inflation rate in all commodity groups in Western Visayas moved up to three percent in May.
Frank Carbon, chief executive officer of Metro Bacolod Chamber of Commerce and Industry (MBCCI), said with the huge volume of business being experienced now, and growing between six to seven percent in terms of gross domestic product (GDP), inflation between three to four percent has no adverse effect on business.
“This means that the increase in our cost of operation can be comfortably absorbed by our present profit margin,” Carbon said, adding that “business profitability and viability are not adversely affected.”
Inflation is the sustained increase in the general price level of goods and services in an economy over a period of time.
Western Visayas inflation in May is lower than the country’s headline inflation of 3.2 percent which also moved up from three percent in April.
The region has the ninth lowest inflation rate from all 17 regions outside the National Capital Region (NCR) with an average inflation of 3.1 percent from the previous three percent.
NCR has 3.4 percent inflation rate in May, higher than 3.1 percent in April.
The PSA reported this is the first time that the country’s inflation increased after six straight months of slowdowns.
But it is still within the government’s target range of two to four percent for the fourth consecutive month, the agency said.
The increase was primarily brought about by higher annual rates posted in the heavily-weighted food and non-alcoholic beverages index at 3.4 percent and housing, water, electricity, gas, and other fuels index at 3.3 percent, it added.
For the labor group, meanwhile, the higher inflation is an indication that the government cannot control the prices of basic goods and services.
Wennie Sancho, secretary general of General Alliance of Workers Associations (Gawa), said the government’s hype to taper down inflation is sometimes a mere propaganda.
Sancho said higher inflation also means that the cost of living is also increasing which would justify the filing of wage increase in Western Visayas.
“If the local economy will be affected by the trade war between US and China and the effects of El Niño cannot be arrested, the increasing trend on inflation will continue,” he said, adding that this will further reduce the purchasing power of the peso.