The rate of increase in consumer prices was steady for the third straight month in May, but remained above the Duterte administration’s target, data from the Philippine Statistics Authority (PSA) showed on Friday, June 4.
The country’s headline inflation clocked in at 4.5 percent last month, matching level registered in March and April. However, the latest number is quicker compared with 2.1 percent in May 2020.
The May inflation rate brought the country’s first four-month average at 4.4 percent, still faster than the government’s target band of 2.0 percent to 4.0 percent in 2021.
Meat inflation remained the main driver of overall inflation with a 1.4-percentage points contribution, similar to the previous month.
National Statistician Dennis Mapa said the government’s intervention that was implemented in mid-May to shore up pork supply has yet to reflect in meat inflation, which settled at 22.1 percent during the month.
However, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the impact of Executive Orders (EO) 133 and 134, which temporarily reduced the tariffs and increase the minimum access volume (MAV) for pork, is expected to be felt beginning June.
“We expect to gradually see the benefits of Executive Orders (EO) 133 and 134 in the coming months to help curb pork prices and provide relief to consumers and households,” Chua said in a statement.
Month-on-month meat inflation registered its first decline in the past eight months with a -0.1 percent inflation rate, suggesting stabilizing meat prices.
Moreover, the inflation rate last month remained stable as inflation for food and non-alcoholic beverages moderated to 4.6 percent.
In addition, food inflation slowed down to 4.9 percent, with rice inflation further decelerating to -0.8 percent from -0.3 percent in the previous month.
Vegetables and fruits also recorded deflation. Meanwhile, inflation in transport services decelerated to 15.4 percent from 17.6 percent in April.
President Duterte earlier issued EO 135 to temporarily reduce the Most Favored Nation tariff rates on imported rice to 35 percent from the previous 40 to 50 percent.
“This was a proactive move to diversify market sources and augment rice supply amid the increasing global rice prices in order to minimize future rice inflation pressures,” Chua said.
Furthermore, the President also declared one-year state of calamity in view of the African Swine Fever (ASF). This move allows LGUs to access their calamity fund and realign resources to help the local hog industry.
“In managing inflation, our priority is to improve our domestic production and provide needed support to our farmers and producers,” Chua said.
“When necessary, we will augment supply with importation to keep prices stable and guarantee food security. This balancing act will help us better manage the impact of inflation on the people,” he added.
The Bangko Sentral ng Pilipinas expects full-year inflation to fall back within the target range at 3.9 percent.