The rate of increase in consumer prices quickened in June as limited transport options amid the gradual reopening of the country’s economy resulted in higher fares, the Philippine Statistics Authority (PSA) said Tuesday.
The headline inflation clocked in at 2.5 percent last month faster than the 2.1 percent seen in May, but slower compared with the 2.7 percent registered in June last year.
National Statistician Claire Dennis S. Mapa said transport prices picked up by an average of 2.3 percent that month, a reversal of the contraction seen in May, as most of the country transitioned from strict quarantine measures to more relaxed restrictions.
But Mapa noted that limited public transport options had fuelled inflation during the month, particularly tricycle fares and bicycle prices, which both soared by 26 percent and 7.5 percent, respectively.
In Metro Manila, the minimum charge per passenger jumped by nearly 44 percent to P17 from P12 in the previous month.
The average tricycle fare, meanwhile, increased by 129 percent compared with the same period last year.
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua agreed that the partly restricted public transport had pushed inflation along with higher domestic petroleum prices following the recovery in international oil prices.
“Tricycle fares recorded an increase of 26.0 percent from 6.6 percent, as operators tried to compensate for reduced passenger load to follow social distancing measures with higher fares,” Chua said.
Aside from transport, prices of alcoholic beverages and tobacco rose 18.5 percent in June, while both utilities as well as communication increased by 0.4 percent.
Food inflation, however, decreased further to 2.7 percent in June from 2.9 percent in the previous month and 2.6 percent in the same month last year.
The uptick in June halted the inflation’s four consecutive months of deceleration, and brought the country’s first semester average to 2.5 percent, still well within the Duterte administration’s target of 2.0 percent to 4.0 percent.
Meanwhile, Chua said that ensuring price stability through greater use of technology and supporting the agriculture value chain is necessary to help build consumer confidence dampened by the pandemic.
Chua said consumer confidence is important in supporting the gradual recovery of the domestic economy, which the government expects to contract by around 2.0 percent to 3.4 percent this year.
“The moderate increase in inflation will help in the recovery of consumer demand as the economy gradually reopens,” Chua said.
As the COVID-19 pandemic continues to affect the daily lives of Filipinos, he said the government needs to ensure commodity prices remain low and stable to preserve the purchasing power of Filipinos.
This will help build-up consumer confidence and support the gradual opening and recovery of the domestic economy, Chua said.
The NEDA chief added that with the onset of the rainy season and continued implementation of community quarantine measures, the government and the private sector need to use existing digital technologies to better address supply bottlenecks and ensure stable prices.
“Although inflation is expected to remain within the target range of 2.0 to 4.0 percent this year, we need to closely monitor possible upside risks to inflation as select economic activities are now resuming, although at reduced capacities,” Chua said.