INFLATION in 2019 averaged 2.5 percent owing to the lingering impact of the African swine fever (ASF) and the possible surge in oil prices amid tensions in the Middle East.
“The government should effectively manage expectations at the domestic front and be vigilant against any unwarranted increase in pump prices considering that the last tranche of excise tax increase on fuel products will be implemented this month,” said Socioeconomic Planning Secretary Ernesto Pernia in a statement on Tuesday, Jan. 7, 2020.
The country ended 2019 with steady inflation, well within the Bangko Sentral ng Pilipinas’ two to four percent target, but the government must remain vigilant and proactive in managing the impact of potential sources of price pressures, Pernia said.
Inflation in December accelerated as widely expected to 2.5 percent.
This was mainly driven by the uptick in the prices of both food and non-food items due to the impact of typhoons and rising oil prices recorded during the month.
Rice prices posted softer deflation (-6.8 percent from -8.3 percent in November 2019) while inflation rose faster for fish (7.4 percent from 2.5 percent in November 2019) and vegetables (8.2 percent from one percent in November 2019), according to the Philippine Statistics Authority.
Pernia cautioned that the escalating tensions in the Middle East may disrupt global oil supply which could lead to a surge in the prices of petroleum products and overall inflation.
Pernia further said that in the short term, demand management and alternative sources of petroleum products should be explored.
Over the medium to long term, shifting away from fossil fuel and import dependence should also be encouraged, the official said.
Pernia also called for the immediate implementation of the recovery and rehabilitation plans for the typhoon-affected areas and the production support programs for the affected farmers and fisherfolks.
“Over the medium to long term, the agriculture, forestry and fisheries sector must increasingly adopt climate and disaster-resilient technologies and best practices. Climate and disaster risks should also be considered in the program and project designs in the sector,” Pernia noted.
He also mentioned other priority areas such as assisting farmers to shift to high-value, short-maturing and high-yielding crops; and sustaining biosecurity measures and procedures until the ASF is fully eradicated.
This will bring back confidence of consumers in pork products, he said. (CSL)