Root causes of inflation identified
Natural disasters and strict transport rules push inflation up
MANILA – The National Economic and Development Authority (NEDA) today said transport services, and farm products such as meat and vegetables contributed to November 2020 inflation.
In a statement, NEDA said restrictions imposed on public transport due to COVID-19, African Swine Fever and losses incurred in high value crops with a series of typhoons and flooding last month caused the inflation to rise to 3.3 percent last month from 2.5 percent last October and 1.3 percent in the same period last year, which brought the year-to-date (YTD) inflation to 2.6 percent.
However, the YTD inflation remains below the midpoint of the central bank’s full-year target of 2 to 4 percent for the year.
“The faster inflation in November 2020 was mainly driven by the increase in the price index of food. Food inflation accelerated to 4.5 percent in November from 2.1 percent in October following weather disturbances,” the statement revealed.
According to the latest estimates of the Department of Agriculture (DA) as of November 27, 2020, the total damage and losses in the sector due to the six consecutive typhoons amounted to P15.3 billion. Bicol Region was the most affected followed by CALABARZON, Cagayan Valley and Central Luzon.
Acting Socioeconomic Planning Secretary Karl Kendric T. Chua underscored the need for long-term engineering interventions, reforestation, and coordinated flood management systems within the different local government units as well as the need to intensify the distribution of climate-resilient technologies and other production support assistance to reduce production loss in the agriculture sector.
He added the Quick Response Fund (QRF) can also be harnessed to repair and rehabilitate production facilities and irrigation systems damaged by the recent typhoons.
The inflation for transport services remained high in the last six months due to social distancing directives and reduced passenger capacities in all modes of public transport.
He also called to look into the public transport system guidelines and for LGUs and the Land Transportation Franchising and Regulatory Board (LTFRB) to monitor and review prevailing and unwarranted fare increases in public transport as the government gradually reopens the economy and allow more public transport while strictly reinforcing the seven commandments of safe public transportation.
“To help ease the burden on public transport operators and drivers who have been adversely affected by the lockdowns, the Department of Transportation (DOTr) may also consider waiving some regulatory fees as well as expanding the efficient service contracting mechanism to incentivize continued operations and encourage even more public utility vehicles (PUV) to resume operations, given the reduced load capacity in adherence to minimum health standards,” Secretary Chua added. (Melo M. Acuna)
Acting Socioeconomic Planning Secretary Karl Kendric T. Chua. (Screen grab from DBCC Press Briefing/Melo M. Acuna)