CEBU

Philippines inflation rises to 2.5% in June

FARE. The rise in tricycle fares in June has led to the faster rise of inflation in June to 2.5 percent from 2.1 percent in May. The national government placed Metro Manila under general community quarantine (GCQ) beginning June 1. Cebu City, on the other hand, enjoyed a short-lived GCQ status from June 1 to 15 and was placed again under enhanced community quarantine following the surge of Covid-19 cases. Under the GCQ and modified GCQ, tricycles can only carry one passenger at a time and no back ride is allowed to observe social distancing, prompting tricycle fare hikes. (SunStar file)

INFLATION went up to 2.5 percent in June 2020, after four consecutive months of deceleration, the Philippine Statistics Authority (PSA) said Tuesday, July 7, 2020. This makes the year-to-date inflation for 2020 at 2.5 percent. In May 2020, inflation was at 2.1 percent and in June 2019 at 2.7 percent.

The uptrend in the June 2020 inflation was primarily brought about by the 2.3 percent annual increase recorded in the transport, specifically, tricycle fare, from a 5.6 percent annual decrease in May 2020.

Annual increases in the indices of alcoholic beverages and tobacco at 18.5 percent; and in housing, water, electricity, gas and other fuels; and communication, both at 0.4 percent, also pushed up the June 2020 inflation.

Food inflation, however, decelerated further to 2.7 percent in June 2020. It was 2.9 percent in the previous month and 2.6 percent in June 2019.

Central Visayas’ inflation went up to 2.7 percent from 2.2 percent in May.

Steven Yu, president of the Mandaue Chamber of Commerce and Industry, said inflation should be low because purchasing power is at an all-time low.

The June inflation was within the Bangko Sentral ng Pilipinas (BSP) forecast range of 1.9 to 2.7 percent.

“The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation pressures remain limited due largely to the adverse impact of the Covid-19 pandemic on the domestic and global economic conditions,” the central bank said in a statement.

According to the BSP, the latest baseline forecasts suggest a benign inflation environment over the policy horizon.

Inflation is expected to average at 2.3 percent for 2020, 2.6 percent for 2021 and 3.0 percent for 2022.

Domestic economic activity is projected to follow a U-shaped quarterly recovery path with output likely to contract further in the remaining quarters of 2020.

The BSP said growth is expected to recover in 2021 once the impact of government policy support measures gains traction.

Meanwhile, the outlook for the global economy has further deteriorated with considerable uncertainty brought about by the magnitude and duration of containment measures across all economies.

The BSP assured it remains committed to the use of monetary instruments and regulatory relief measures when needed further in fulfillment of its mandate to promote non- inflationary and sustainable growth.

The BSP likewise reiterated its support for the health and fiscal programs already being rolled out by the national government to support the needs of Filipino households and firms amid the pandemic.

Inflation in the National Capital Region (NCR) climbed further to two percent in June 2020. In May, inflation in the region was at 1.4 percent and three percent in June 2019.

Compared with their inflation in May 2020, 11 regions in areas outside NCR had higher inflation in June 2020. Among the regions outside NCR, the highest inflation during the month was observed in Bicol Region at 4.3 percent, while the lowest was seen in Eastern Visayas at 1.1 percent. (JOB with PR)


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