By Chino S. Leyco
The Department of Finance (DOF) said that the rate of increase in consumer prices may continue to settle below the government’s target range until December this year should inflationary momentum maintain its weakness.
Gil S. Beltran
Finance Undersecretary Gil S. Beltran, said that the country could enjoy a below 2.0 percent inflation rate in the coming months as long as its rise is kept at 0.2 percent month-on-month between September and November this year.
Beltran, who is also the DOF’s chief economist, cited that inflationary momentum appeared have weakened last month as shown by the lower core inflation and month-on-month price change.
“Core inflation eased to 2.9 percent for the month while the overall CPI increased by 0.17 percent month-on-month (MOM) in August, less than the 0.25 percent MOM increase in July,” Beltran said.
“If the MOM price increase is kept to at most 0.2 percent, year-on-year price change will continue its decline until October before reverting to the 2.0 percent level starting December,” he added.
In August, inflation clocked in at 1.7 percent, below the government’s target of 2.0 percent to 4.0 percent. The latest figure brought the country’s eight-month average at 3.0 percent.
“Slower inflation will give room for government to aim at higher GDP growth,” Beltran said.
“Meanwhile, the catch-up plan for implementing infrastructure projects will boost public investment growth in the second semester and push the economy closer to the 6.0 percent to 7.0 percent GDP growth goal,” he added.
The decline in inflation was traced to the lower rate of increase in the prices of both food and non-food items. Rice price, in particular, clocked its largest year-on-year decline of 5.2 percent. Lower international energy prices also translated to lower domestic fuel, electricity and transportation prices.