The Department of Finance said there is a need to further streamline the supply chain of some agricultural products to make sure the inflation rate will continue to slow down in the months ahead.
The DoF in an economic bulletin issued Friday cited the need for the activation of a trade platform that would facilitate seamless trade transactions.
“The BOC (Bureau of Customs) Commissioner should already sign CMO (Customs Memorandum Order) to activate TradeNet.ph to allow for further streamlining,” it said.
It also said that “productivity programs need to be implemented to reverse the price increases of fish, fruits and vegetables.”
The Philippine Statistics Authority said earlier higher food prices were one of the main reasons why inflation peaked at a nine-year high of 6.7 percent in October 2018.
This was exacerbated by the successive strong typhoons in August and September that hit northern Luzon provinces, whose main product is rice and vegetables.
But after the immediate measures implemented by the government to curb inflation took effect, inflation eased to 6 percent in November and 5.1 percent in December.
The figures brought full-year inflation to an average of 5.2 percent, albeit over the target range of 2 to 4 percent for the year.
“Inflation is mainly supply-side driven. The inflation decline was due to the streamlining of the supply chain, including for imported goods, upon the President’s signing of several administrative orders and memorandum circulars last Sept. 21,” the DoF said.
Inflation in January this year further slowed to a 10-month low of 4.4 percent from 5.1 percent a month ago, due mainly to the slower increases in the prices of non-alcoholic beverages and food products.
The January inflation was the slowest in 10 months since 4.3 percent in March last year but it was faster compared to 3.4 percent in January 2018.
Bangko Sentral ng Pilipinas said the latest inflation outturn was in line with a target-consistent inflation path as inflation rate was projected to decelerate further in 2019 to 2020.
It said domestic supply-side pressures were seen to further ease, while the impact of monetary policy adjustments in 2018 was expected to continue to work their way through the economy.