President Marcos' chief economic manager is confident that the rate of increase in consumer prices would fall within the government's target range this year.

During the Philippine Economic Briefing in Tokyo on Friday, June 21, Finance Secretary Ralph G. Recto said that inflation may stabilize at 3.4 percent for 2024, aligning with the International Monetary Fund's (IMF) forecast.

“This is well within the government’s target of two to four percent and significantly lower than the global average of 5.9 percent,” Recto said before Japanese investors.

If realized, the 3.4 percent annual inflation rate would be significantly slower than the 6.0 percent recorded last year, or the slowest pace since the 2.4 percent seen in 2020.

Inflation averaged 3.5 percent in the first five months of the year,

“As inflation eases, we anticipate a further acceleration in our already robust domestic demand, with household consumption accounting for about 75 percent of our economy,” Recto said.

However, starting from the beginning of the year, inflation has shown a consistent uptrend, increasing from 2.8 percent in January to 3.4 percent in February, 3.7 percent in March, 3.8 percent in April, and 3.9 percent in May.

The May figure was the highest in six months since the inflation rate reached 4.1 percent in November 2023.

The main reason for the accelerated inflation rate in May compared to April was the faster rise in the prices of Housing, Water, Electricity, Gas, and Other Fuels, which increased by 0.9 percent from 0.4 percent.

According to the Philippine Statistics Authority (PSA), Housing, Water, Electricity, Gas, and Other Fuels accounted for a 56.8 percent share of the overall inflation rate increase in the country.

Specifically, liquefied petroleum gas (LPG) prices increased to 9 percent from 8.3 percent month-on-month, while electricity prices decreased to -8.5 percent from -11 percent in April.

“The government will continue to implement lasting policy reforms to ensure we address the drivers of food and non-food inflation sustainably. We want to maintain a macroeconomic environment conducive to investment and high-quality job creation — an environment that would allow us to hit the Marcos Administration’s development targets by 2028,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said.

“To help manage food inflation, promote policy stability and investment planning, and enhance food security, the NEDA Board has agreed to reduce the rice duty rate to 15 percent from 35 percent for both in-quota and out-quota imports until 2028,” he added.

The NEDA Board, chaired by the President, also approved the extension until 2028 of the reduced tariff rates on corn, pork, and mechanically deboned meat under Executive Order No. 50, s. 2023.

“The NEDA Board approved the new Comprehensive Tariff Program for 2024-2028, a strategic move to ensure access and affordability to essential commodities while balancing the interests of consumers, local producers, and the economy. At the same time, we recognize the need to help our farmers by modernizing our agricultural sector,” the NEDA chief said.