As a result of government policy initiatives, inflation slows
As headline inflation slowed in June 2021, policy measures to stabilize commodity prices began to take impact, according to the National Economic and Development Authority (NEDA).
The Philippine Statistics Authority (PSA) said on Tuesday that headline inflation dropped to 4.1 percent, keeping year-to-date inflation at 4.4 percent.
From March to May 2021, there was a three-month period of consistent 4.5 percent inflation. It’s also the lowest rate of inflation since December 2020.
“Recent measures aimed at increasing food supply have started to bring inflation down. In a statement, Socioeconomic Planning Secretary Karl Kendrick Chua stated, “Be assured that the government will continue to resolve limitations in the availability and transportation of commodities despite quarantine regulations to guarantee that families have access to cheap food.”
In June 2021, food inflation continued at 4.9 percent, with higher inflation in fish being offset by slower inflation in grains, vegetables, and meat.
From a peak of 22.1 percent in April and May 2021, meat inflation slowed to 19.2 percent in June 2021.
Meat inflation decreased to -0.3 percent from -0.1 percent in the previous month.
“Executive Orders (EO) 133 and 134 seem to be having a beneficial impact on beef inflation. These are anticipated to lower beef costs much further in the second part of the year “Chua said.
President Rodrigo R. Duterte announced a one-year state of disaster on May 10, 2021, in response to a rise in pig prices caused by the African swine fever (ASF) epidemic, which substantially decreased local pork output.
LGUs were able to use their disaster funds and reallocate resources to assist the hog sector as a result of this.
Hog repopulation initiatives, food safety and ASF-zoning, and ASF vaccine research are some of the other government actions.
The government issued EO 133, which raised the minimum access volume (MAV) for imported pork, and EO 134, which imposed a temporary decrease in pork tariffs, to support efforts to improve pork production and control the ASF.
Meanwhile, President Duterte signed EO 135 to temporarily lower the most favored country (MFN) tax rates on imported rice from 40 to 50 percent in order to maintain a steady rice supply.
As a result, the nation was able to diversify its market sources, increase rice supply, and lower rice prices even more.
“Our first goal in controlling inflation will be to keep increasing our domestic output and giving essential assistance to our farmers and producers. To keep prices steady and ensure food security, we will supplement supplies with imports as required. This balancing act will allow us to better control the effects of inflation on individuals and the economy, according to Chua.
Inflation in the transportation sector continued to decline in June 2021, falling to 9.6 percent from 16.5 percent in May 2021.
However, transportation expenses continue to rise, owing to social distancing measures and the recovery of global oil prices. With the government’s increased immunization campaign, this is anticipated to diminish in the near future.
“Keeping transportation costs low supports our efforts to securely convey individuals to their places of employment. We are speeding up vaccination of the A4 priority group of employees in order to safeguard them and their families while they work. These measures will aid the economy’s robust recovery in 2021, according to Chua.