The Department of Finance (DOF) remains cautious about inflation as it expects prices of petroleum may increase at a much faster pace in the coming months.
Based on the latest economic bulletin, Finance Undersecretary Gil S. Beltran said that while headline inflation had slowed last month, the rate of increase in non-food prices rose from 2.69 percent to 3.21 percent.
Beltran attributed the faster non-food price inflation to the double-digit year-on-year increase in transportation, which hit 13.85 percent in March.
“Base effects from energy prices on year-on-year inflation will be felt in the coming months,” the DOF chief economist warned.
According to World Bank, Dubai crude price oil averaged at $63.95 per barrel last month, up by 175 percent from $23.27 per barrel in April last year, the lowest since December 2002.
To temper the accelerating non-food prices, Beltran said it is important that the strict quarantine measures do not impede the transportation of perishable primary food items.
The Philippines Statistics Authority reported that the general price level decelerated to 4.5 percent in March, down from the 4.66 percent in the previous month, but nearly twice the 2.51 percent a year earlier.
Beltran explained that the slower inflation from April’s level was largely on account of major food items.
In particular, he said meat price inflation eased to only 0.07 percent, fish price inflation declined by 1.25 percent, and vegetable price inflation declined by nearly 9.6 percent.
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the government is committed to stabilizing prices by augmenting food supply and ensuring that the supply chains of goods, especially food, will be unhampered.
Chua said they will continue to address supply issues and logistics bottlenecks to ensure price stability, especially for food and essential goods.
“We are working with a great sense of urgency to protect the purchasing power of the people, majority of whom have lower or forgone income as a result of the ECQ, and ensure better access to healthy, safe and affordable food,” Chua said.
Despite being outside the central bank’s target range of 2.0 percent to 4.0 percent, Chua said the lower inflation rate recorded for March is a good indicator of price stabilization and the government expects the succeeding inflation rates to align with targets soon.