PH Inflation Remains at 4.5% in May, But Still Too High for Gov’t

On Friday, the Philippines Statistics Authority reported the country’s inflation rate at 4.5% in May. The figure is similar to the rates that were recorded in March and April, which indicates the stable prices of basic commodities.

While this was within the Bangko Sentral ng Pilipinas’ (BSP) projection of 4 to 4.8%, it is still too high for the government’s target band of 2 to 4%.

The country’s hog population was already being hit by the African Swine Fever prior to the global pandemic. Failure to contain this threat has led to a shortage in the supply of pork meat.

Fortunately, the government has already implemented aid programs to assist producers in hog repopulation. In order to augment the supply, President Rodrigo Duterte additionally approved a proposal to reduce tariffs for imported meat.

According to BSP Governor Benjamin Diokno, the inflation rate should begin to ease by the second half of the year and finally fall within the government’s targets by 2022. For now, it will continue to be elevated.

Household consumption, which a relevant economic driver, is also heavily affected by higher inflation rates.

In an effort to boost the country’s economic recovery, the BSP has likewise been encouraging consumers to borrow as interest rates are kept at their lowest level of 2%.

Source: ABS CBN