Malacañang on Thursday assured the public there is no reason to be alarmed over the minimal increase in the Philippines’ inflation rate.
According to the data earlier released by the Bangko Sentral ng Pilipinas, the prices of commodities rose to 3.2 percent in May from 3 percent in April, breaking the six-consecutive month of the slowdown in the inflation rate.
Despite the increase, the central bank’s research arm said the recent figure held the 2.8 to 3.6 percent range.
Presidential Spokesman Salvador Panelo said the slight increases in some agricultural food products like vegetables, fish, and fruits and housing, water and utilities contributed to the uptick in May.
Panelo said there were some things the Duterte administration could control, resulting in a spike in the inflation rate.
“High spending in food and alcoholic beverages during the preceding campaign period, coupled with the rise of the international prices of fuel and aggravated by the El Niño phenomenon in the peak summer month of May, resulting in food price inflation of fish and vegetable, spiked the inflation rate,” he said.
Still, “The rise is within the 2.8 percent to 3.6 percent range estimated by the BSP. Hence, there is no cause for alarm,” Panelo said.
He then assured the public that all the factors he mentioned were expected to taper down.
“When the full impact of rice liberalization is felt, with rice prices falling down further, there will be a downtrend in the inflation rate. Current rice and corn price index already showed a decline of 0.7 percent and 2.8 percent, respectively,” he said.
Panelo also echoed the earlier statement of central bank Governor Benjamin Diokno that the 3.2 percent inflation rate in May “is not indicative of a trend reversal.”
For Panelo, one data point does not constitute a trend, claiming that inflation was “moderating and swinging back to normal.”
“It is irrational to think that the high policy rate will remain. The correct view is that policy rates cut is inevitable, though the exact timing will be data-dependent and evidenced-based,” he said.
“We assure our countrymen that the minimal increase in the inflation rate is a circumstance that does not toll the alarm bells.”
The Philippine Statistics Authority earlier attributed the increase in overall inflation to the top three contributors such as food and non-alcoholic beverages, housing, water, electricity, gas, and other fuels, and restaurant and miscellaneous goods and services.