Neda says weather poses upside risk to inflation

AS MALACAÑANG rejoiced over the deceleration of the country's headline inflation rate, the National Economic and Development Authority (Neda) warned that weather-related shocks and uncertainties in the oil market pose upside risks to inflation.

"Slower inflation comes with the optimism that the quality of life will improve along with the economy’s robust growth," Neda said in a statement several hours after the Philippine Statistics Authority reported that the June 2019 inflation slowed down to 2.7 percent, the lowest since September 2017 or in nearly two years.

But "we note that the prevalence of adverse weather conditions in the country remains an upside risk to inflation, especially with the start of the rainy season," the agency added.

Neda said nine to 13 typhoons are expected to hit the Philippines this year. The southwest monsoon, meanwhile, would bring above-normal amount of rainfall.

On the other hand, the weak El Niño phenomenon has been forecast to persist until August 2019, with a chance to continue until the first quarter of 2020.

"We reiterate our call to beef up production support and farm recovery programs in areas affected by El Niño. We also pitch for an assessment on the vulnerability and sustainability of farm areas to ensure that farming activities are adaptive to the environment and resilient to weather disturbances," Neda said.

Malacañang, for its part, vowed that the Duterte government would continue pushing for measures that will keep consumer price growth in the Philippines at its slowest pace in the months to come.

"Soaring inflation has been slayed. It is now a thing of the past. The Palace is pleased with inflation easing to 2.7 percent in June 2019, considered the lowest rate recorded by local statisticians since September 2017," Panelo said.

"We will sustain our efforts in stabilizing and maintaining the prices of basic goods and services even as we endeavor to improve the day-to-day living of the Filipino people," he added.

The PSA said the downtrend in inflation was mainly driven by slower annual rate in the index of heavily-weighted food and non-alcoholic beverages at 2.7 percent.

Panelo thanked the public for trusting the government at the time it was struggling to address the country's inflation surged to over six percent in August last year.

He also attributed the lowest inflation rate in June 2019 to the efforts of Duterte's economic team, as well as Congress, to ease inflation.

"Due credit must be given to our country's economic managers for this positive development. The lawmakers of the last Congress should likewise be credited for supporting the President’s legislative agenda by passing Republic Act No. 11203 (Rice Tarrification Law)," Panelo said.

"We are grateful for our people's patience and trust while surging inflation is being decisively addressed by this Administration," he added. (Ruth Abbey Gita/SunStar Philippines)

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