Government intensifies efforts to tackle inflation

By Francis Allan L. Angelo

The national government is ramping up efforts to address persistent inflation drivers, following a slight rise in the country’s headline inflation rate in May 2024, according to the National Economic and Development Authority (NEDA).

The Philippine Statistics Authority (PSA) reported on Wednesday, June 5, that the headline inflation rate increased to 3.9 percent from 3.8 percent in April.

The uptick is primarily attributed to higher year-on-year increases in the prices of housing and utilities, which rose to 0.9 percent from 0.4 percent in April, and a faster growth rate in the transport index, which jumped to 3.5 percent from 2.6 percent.

“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,” NEDA Secretary Arsenio M. Balisacan said in a press statement.

Despite the rise in headline inflation, food inflation showed a slight decrease, falling to 6.1 percent in May from 6.3 percent in April.

The reduction was mainly due to a slower increase in the prices of vegetables, tubers, plantains, and cooking bananas, which grew by 2.7 percent in May compared to 4.3 percent in April.

Additionally, rice inflation decreased slightly to 23.0 percent from 23.9 percent, while the inflation rate for fish and other seafood remained at zero percent.

To mitigate food inflation 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.

“This strategic move aims to make rice more affordable and accessible for all Filipino consumers, especially the most vulnerable,” Balisacan explained.

The NEDA Board also extended the reduced tariff rates on corn, pork, and mechanically deboned meat under Executive Order No. 50, s. 2023, until 2028.

“The new Comprehensive Tariff Program for 2024-2028 ensures access and affordability of essential commodities while balancing the interests of consumers, local producers, and the economy,” Balisacan added.

The government also continues to focus on raising productivity to sustainably reduce food prices and shield consumers from global market volatility. Measures include modernizing the agricultural sector and implementing supply-side solutions to manage price increases in other commodities.

Finance Secretary Ralph G. Recto assured the public that the government is carefully balancing inflation mitigation measures by conducting regular reviews and policy adjustments.

“We are vigilantly tracking persistent inflation drivers and employing a whole-of-government approach to craft data-driven policies. Our top priority is to ensure that the majority of Filipinos, especially the poor and vulnerable, benefit from these interventions,” Recto said.

The Department of Social Welfare and Development is set to fully implement the Food Stamp Program nationwide in July, targeting one million households by 2027, starting with 300,000 families in 10 regions.

The overall year-to-date inflation rate stands at 3.5 percent, well within the government’s target band of 2 to 4 percent. The slight uptick in May’s inflation rate is influenced by increased housing and utility costs, as well as transport prices.

The NEDA Board’s recent decisions aim to alleviate inflation pressures while ensuring the sustainability of essential commodities.

With continuous efforts and strategic policy implementations, the government aims to maintain a stable macroeconomic environment conducive to growth and development.