Inflation May Continue and Could Affect the Prices of Goods – DOF

Department of Finance (DOF) warned the public to be ready as the Philippines may continue to suffer inflationary pressures from different commodities, consumers could expect further price increases.

One of the affected sectors from the inflation would be the food sector. DOF Chief Economist Gil Beltran said the effects of African Swine Fever (ASF) continue to endanger the country’s food security. Beltran believes the country desperately needs to repopulate affected hog populations and support any deficiencies with meat imports for the time being.

Beltran also mentioned the effects of the crisis in Eastern Europe that would also cause a bigger pain to the country’s food and energy security. As the conflict continues it affects the prices of oil imports of the Philippines which skyrocketed in the past weeks.

As of March, the average price of crude oil is $137 per barrel. According to the Department of Energy (DOE), crude prices have dropped later in the week as a result of a diplomatic intervention by the UAE ambassador to the United States, who declared that the UAE supports increased production and will encourage the Organization of the Petroleum Exporting Countries (OPEC) group to do so.

According to Beltran, increased global energy prices eventually translate into higher local pump prices. Suspending gasoline excise duties, on the other hand, would be a policy blunder because it would amount to “subsidizing the rich,”.

Finance Secretary Carlos Dominguez III stated that the DOF, as a matter of principle, rejects any proposal to suspend fuel excise taxes since it would result in large revenue losses, be damaging to our recovery, and be inequitable.

Source: DOF, DOE