Inflation decelerates in June, NEDA cites government policy interventions
MANILA – The Philippine Statistics Authority (PSA) today reported that headline inflation rate slowed down to 4.1 percent after three months of a steady 4.5 percent inflation rate from March to May 2021.
According to the National Economic and Development Authority (NEDA), the downturn in inflation was due to policy interventions to stability commodity prices which took effect recently.
The 4.1 percent inflation rate is the lowest since December 2021. However, the year-to-date inflation remains at 4.4 percent.
“Recent policies to increase food supply are beginning to bring down inflation. Rest assured that the government will continue to address constraints in the availability and movement of goods amid quarantine restrictions to ensure that households have access to affordable food,” Socioeconomic Planning Secretary Karl Kendrick T. Chua said.
In a statement, NEDA said food inflation remained at 4.9 percent in June 2021 with the faster inflation in fish tempered by slower inflation in other food items including rice, vegetables, and meat. Meat inflation decelerated to 19.2 percent in June 2021 from a high of 22.1 percent recorded in April and May 2021. Month-on-month meat inflation also continued to decline at -0.3 percent from -0.1 percent.
Secretary Chua attributed the lower inflation to the positive effects of Executive Orders (EO) 133 and 134. He said these are expected to bring down further meat prices during the second half of the year.
The spike in pork prices was due to the African Swine Fever (ASF) outbreak that reduced domestic food production, President Rodrigo Duterte declared a one-year state of calamity on May 10,2021. The LGUS tapped their calamity funds and realign resources to help the hog industry. Other government interventions include hog repopulation programs, food safety and ASF-zoning, and ASF vaccine development. The government adopted EO 133, which increased the minimum access volume (MAV) for imported pork and EO 134, which imposed a temporary reduction of pork tariffs.
Executive Order 135 was later issued to temporarily reduce the most favored nation (MFN) tariff rates on imported rice to 35 percent from 40 to 50 percent. This allowed the country to diversify its market sources, expand rice supply, and further bring down rice prices.
Secretary Chua said their priority will be to further improve domestic production and provide the needed support to farmers and producers. He vowed they will augment supply with importation to keep prices stable and guarantee food security.
He also noted the downtrend in transport inflation at 9.6 percent in June 2021 from a high of 16.5 percent in May 2021. The cost of transport services remain high because of social distancing measures and the recovery of global oil prices. This is expected to decrease in the near term with the government’s heightened vaccination program.
“Keeping transport expenses low complements our efforts to safely bring people to their workplaces. We are accelerating the vaccination of the A4 priority group of workers to keep them and their families protected as they earn a living. These efforts will help the economy recover strongly in 2021,” Chua concluded. (Melo M. Acuña)
Socioeconomic Planning Secretary Karl Kendrick T. Chua. (Screen grab from recent press briefing)