MANILA – Inflation has finally eased within the government’s target range of 2 to 4 percent in the first quarter of 2019 after three straight quarters of accelerating beyond the goal.
Bangko Sentral ng Pilipinas governor Benjamin Diokno on Friday said inflation or the rate of increase in consumer prices “further decelerated to 3.8 percent from 5.9 percent in the fourth quarter of 2018.”
The central bank chief noted that the slower inflation in the first three months of the year is “mainly a result of a significant drop in food inflation due to improved supply conditions.”
The latest figure also compares with the 3.8-percent inflation rate recorded in the same quarter last year.
“Inflation is now within the target range of the government of 2 to 4 percent,” Diokno said in a press briefing in Manila.
Inflation had been accelerating beyond the government’s target since the second quarter of 2018 when it settled at 4.8 percent. It also soared to 6.2 percent and 5.9 percent in third and fourth quarter of 2018.
The impact of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, higher and volatile global oil prices, and the rise on the food prices and other commodities due to supply shortage were blamed for the inflation spike experienced in the latter part of 2018.
Risks to inflation outlook
BSP Department of Economic Research director Dennis Lapid said the risks to inflation outlook remains broadly balanced in 2019 before tilting to the downside in 2020.
Lapid cited the various petitions for electricity rates adjustments, higher excise taxes for alcoholic beverages as proposed in a pending, and the prolonged El Niño phenomenon as “upside risks” to inflation.
The upside risks, however, can be offset by the expected slower global trade and economic activity which lead to potential downward price pressures.
Sought for comment, Rizal Commercial Banking Corp. lead economist Michael Ricafort said the impact of rice tariffication on the supply can help offset the price pressure brought by the adverse impact of the dry spell on crops. (GMA News)
