Data from the Philippine Statistics Authority (PSA) shows that among all commodity groups, the prices of Transport, Alcoholic Beverages and Tobacco, and Food and Non-Alcoholic Beverages grew the fastest since January – roughly a month before Russia invaded Ukraine.
The invasion of Ukraine was associated with higher oil prices, due to sanctions on Russian oil and petroleum production importation which led to a disruption of the global oil supply chain.
The “all items” commodity group, meanwhile, grew by 3.13 percent. This simply means that all prices in the market generally increased by 3.13 percent. If a basket of goods in the market was represented by P100, that basket now costs P103.13.
Out of all commodity groups, transportation prices grew fastest. This was apparent in the Land Transportation Franchising and Regulatory Board (LTFRB)’s approval of a P10 minimum fare starting June 9 for Public Utility Jeepneys (PUJs). Not even a month later, the agency again approved a P1 provisional hike, making the minimum fare P11 since July 1.
Price increases can also be felt in the rice industry, which experienced a 1.52 percent inflation rate between January and June 2022. Comparing retail price data for some types of milled rice between these two months, both imported and local well-milled rice increased by 5 and 2.5 percent, respectively. Meanwhile, the price of imported regular milled rice increased by 1.35 percent.
These levels of inflation recently prompted the Bangko Sentral ng Pilipinas (BSP) to raise interest rates to 3.25 percent. This means that it will be more expensive for smaller banks to borrow from BSP, making it costlier for individuals and firms to borrow from smaller banks. The end effect is to curb inflation because spending is discouraged.
In light of skyrocketing oil prices, progressive groups such as Anakpawis party-list called on to discontinue the implementation of the Oil Deregulation Law and Value Added Tax (VAT) on petroleum products, which burdens consumers especially during oil price hikes.
Mark Ernest Famatigan is a news writer who focuses on Philippine politics. He is an advocate for press freedom and regularly follows developments in the Philippine economy. The views expressed are his own.
Watch more videos on Yahoo: