Inflation eases further to 1.7% in August

Inflation continued to ease for the third consecutive month in August, according to data released by the Philippine Statistics Authority (PSA) on Thursday.

According to National Statistician Dennis Mapa, inflation slowed to 1.7% in August, which compares with the 6.4% in the same month last year and the 2.4% in July.

This is the slowest rate registered in 34 months since inflation clocked in at 1.8% in October 2016.

"The slowdown of inflation in August 2019 was mainly due to the slower annual increase in the index of the heavily-weighted food and non-alcoholic beverages at 0.6%," said Mapa.

Among the commodity groups that posted slower annual rates in August are housing, water, electricity, gas and other fuels (1.8%); health (3.1%), recreation and culture (1.8%), and restaurant and miscellaneous goods and services (3.2%).

"The transport index, which dropped by 0.2%, also contributed to the downtrend of inflation this month," Mapa said.

"There's a base effect cause I think last year, there was an increase in fares due to higher fuel prices, so there were adjustments in jeepney fares," he added.

Inflation of petroleum and fuels for personal transport equipment posted an inflation of -5.2% from -2.8% the same month last year.

Slower inflation was also registered in jeepney fares (1.5%), bus fares (4.3%), taxi fare (0.0%), and tricycle fares (2.3%).

Malacañang welcomed the latest inflation report.

“Indeed, this is positive proof that our macroeconomic policies and measures put in place by the President and our economic managers are sound and resilient in curbing soaring prices,” presidential spokesperson Salvador Panelo said in a statement.

“We thank the members of the economic team for a job well done as we assure our people that our success in taming inflation will not lull us into complacency.”

Panelo added that the Duterte administration “will work double time in addressing the socioeconomic concerns of our people towards laying down the foundation of a safe, secure and prosperous nation where all Filipinos enjoy comfortable lives.”

Rice prices

In the same press conference, Mapa noted that August saw the fourth consecutive month and the steepest drop in rice prices so far this year.

"For the year, this is the fourth and this is the largest in terms of negative inflation," he said.

"Last year, we had relatively high retail price, but if you notice, negative inflation started four months back so there is really a continuing drop in the actual price month-on-month because of the negative inflation in rice," added Mapa.

Rice prices noted an inflation rate of -5.2% in August versus the -2.9% inflation rate in July

The government earlier this year implement the rice tariffication law, which removed the quantitative restrictions on rice and imposed a 35% tariff on imports from Southeast Asia.

Data from the PSA shows that prices of palay or unmilled rice have dropped to as low as P8 in some regions across the country.

"We are seeing in some areas, the low amount is already between P8 to P10 (per kilo), but in some areas there are still high prices," said Mapa.

The Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC) and the Land Bank of the Philippines just last week signed a memorandum of agreement to implement a P1.5-billion recovery assistance program for rice farmers affected by declining palay prices. — with Virgil Lopez/KBK/BM, GMA News