INFLATION in the country has further slowed down to 2.1 percent in May 2020 from 2.2 percent in April 2020, bringing the year-to-date inflation for 2020 to 2.5 percent, the Philippine Statistics Authority (PSA) said on Friday, June 5.
In May 2019, inflation was higher at 3.2 percent. The slowdown in May inflation was mainly driven by the 5.6 percent annual drop in the transport index, the PSA said.
The downtrend was also brought about by the deceleration in the annual rise of food and non-alcoholic beverages (2.9 percent), clothing and footwear (2.4 percent), furnishing, household equipment and routine maintenance of the house (4.1 percent) and recreation and culture (1.4 percent).
On the other hand, a higher annual increase of 18 percent was noted for alcoholic beverages and tobacco.
Inflation for food slowed down to 2.9 percent in May 2020, from 3.4 percent in the previous month.
“The May 2020 inflation of 2.1 percent shows that prices have remained low and stable. A number of reasons explain this. These include the continued implementation of the Rice Tariffication Law, which has brought down the price of rice by around P10 per kilo from the 2018 peak. In fact, rice inflation in May was negative 2.7 percent,” said Acting Socioeconomic and Planning Secretary Karl Kendrick Chua on Friday.
Chua said efforts of the government to improve the supply chain of essential goods, notably food, during the enhanced community quarantine (ECQ) also helped significantly.
“The price freeze order to make sure that no unscrupulous trader would take advantage of the crisis also contributed to low inflation,” he said.
Inflation in the National Capital Region (NCR) was higher at 1.4 percent in May 2020 than the previous month’s 1.2 percent. In May 2019, inflation was 3.4 percent. Inflation in areas outside NCR eased further to 2.2 percent in May 2020.
Central Visayas inflation slowed down from 2.4 percent in April to 2.2 percent in May.
“In all these, it was not the government that made this happen. Producers worked hard to supply goods continuously despite initial challenges, businesses supported the price freeze order, and consumers cooperated and purchased only what they needed. This is the kind of whole-nation approach that will help the country recover faster,” said Chua.
The PSA also reported that manufacturing volume and value indices fell significantly according to the April 2020 Monthly Integrated Survey of Selected Industries.
“All manufacturing subsectors posted double-digit negative growth rates in April 2020 given the imposition of community quarantines. As we shift from ECQ to general community quarantine, we will be seeing improvements in the succeeding months,” he said.
As for employment, the results of the April round of the Labor Force Survey showed the impact of ECQ on employment.
In April 2020, some 7.254 million workers were unemployed, or 4.987 million more compared to April 2019. As a result, the unemployment rate rose from 5.1 to 17.7 percent in the same period.
On the other hand, the underemployment rate, which measures the number of workers who want more work to earn more, also increased from 13.4 to 18.9 percent.
“This relatively smaller increase suggests that government support to the people, such as the social amelioration program, the conditional cash transfer program, the rice subsidy program and the unconditional cash transfer program under the Tax Reform for Acceleration and Inclusion law, are working and reaching the people,” Chua said. / KOC