By Chino S. Leyco
The rate of increase in consumer prices would likely slow further this month as the cost of Filipinos stable food continues to decelerate due to the rice sector liberalization.
Speaking before American business leaders and executives in Washington D.C., Finance Secretary Carlos G. Dominguez III said that inflation for October may further drop below the 0.9 percent level registered in September.
“Our inflation rate month-on-month last year was 0.9 percent. This month, I think, will even be lower than that,” Dominguez said, noting the slowdown was due to the passing of the rice tariffication law.
Dominguez explained that the opening up of rice importation not only benefited Filipino consumers through lower rice prices but also reduced the pressure on businesses to raise wages.
“The rice tariffication is beneficial to all segments of society, including the corporate sector,” the finance chief noted, citing it has brought down the price of the country’s staple food for more than a hundred million Filipinos.
He also boasted, “We are also the only administration that has actually succeeded in passing a Rice Tariffication Law.”
“In the past, we used to spend money to import rice. Now, we are collecting a tariff for the rice imports,” Dominguez said.
“Before, we would spend an average of maybe $300 million a year on rice imports. This year, our tariff collection is going to be around $250 million. It’s the entire opposite,” he added.
Earlier, Finance Undersecretary Gil S. Beltran said inflation may continue to settle below the government’s target range until December this year should inflationary momentum maintain its weakness.
Beltran said 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 to 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 September, inflation clocked in at 0.9 percent, below the government’s target of 2.0 percent to 4.0 percent. The latest figure brought the country’s nine-month average at 2.8 percent.
“Slower inflation will give room for government to aim for higher GDP [gross domestic predict] growth,” Beltran said.