Inflation is anticipated to decelerate in February however the authorities’s goal of two% to 4% inflation for the subsequent two years may be tough to attain, an economist within the House of Representatives mentioned on Tuesday.
Albay Representative Joey Salceda, the chairman of the House Committee on Ways and Means, thus mentioned after the Philippines recorded an 8.7% inflation charge for January.
“You can be sure 8.7% will go down, but there’s a floor. All in all, it looks like 8% is a cyclical level, but 5% is structural,” Salceda said in a statement.
“So, that makes your 2-4% inflation target almost off the table, unless you make decisive efforts on the key drivers. High corn prices: that’s enemy number one,” he added.
The charge of enhance within the costs of commodities logged for the previous month was the very best since 9.1% of inflation was recorded in November 2008.
The Cabinet-level financial cluster Development Budget Coordination Committee (DBCC) in December retained the inflation goal of two% to 4% for 2023 to 2024.
“The inflation target range of 3.0% ± 1.0 percentage point (2-4%) continues to be an appropriate quantitative representation of the medium-term goal of price stability that is optimal for the Philippines given the current structure of the economy and outlook for macroeconomic conditions over the next few years,” the BSP mentioned then.
The DBCC consists of the secretaries of Finance, National Economic and Development Authority, Budget and Management, and the governor of the BSP.
“This announcement of the medium-term inflation target is in line with the BSP’s commitment to transparency and accountability as well as the forward-looking approach in the conduct of monetary policy,” the central financial institution mentioned.
The BSP in late January mentioned inflation was anticipated to stay elevated for the month regardless of the projected deceleration from the 14-year excessive in December because of the increased costs of utilities and commodities.
“I am sure the overall price level in February and every month in 2023 will be lower than 8.7%. Vegetable prices—especially onion— will go lower, especially during this harvest season,” Salceda mentioned.
Salceda, nevertheless, mentioned fish, eggs, and dairy costs will stay excessive.
“I expect fish prices, as well as egg and dairy prices, to remain elevated. Corn drives those prices, and corn prices—imported or domestic—are expensive,” Salceda identified.
Corn costs, Salceda mentioned, have a year-on-year inflation charge of 16%, and have continued to speed up month-on-month by 1%.
“This will drive prices of fish because corn accounts for 60-70% of costs in aquaculture. Every 1% increase in corn prices leads to a P2-5 price increase in tilapia prices,” Salceda mentioned.
“Egg is exacerbated by problems in poultry supply and smuggling of frozen chicken, which kills domestic raisers. But egg supply issues are not isolated. Nearby areas like Guam are already experiencing shortages,” he added.
Salceda reiterated his name for a evaluation of the speed tariff for corn and allocate its assortment for rising corn manufacturing.
Imported corn, Salceda mentioned, could possibly be even P2 costlier than a regionally produced one. —NB, GMA Integrated News
Source: www.gmanetwork.com
