Marcos: 'Increased production' crucial in keeping inflation rate down

President Ferdinand "Bongbong" Marcos Jr. on Wednesday said his administration will continue to try to keep the country's inflation rate down as he looks at "increased production" as the key to reaching this goal.   

"We will try, of course, to continue to bring it down but that requires our success in increasing our production, making it more efficient and again the value chain that I'm always talking about ad infinitum but it's really the answer," Marcos told reporters.

The Philippines’ inflation rate slowed for a fifth month in a row in June on the back of slower movements in food, transport, and utility prices.

National Statistician and Philippine Statistics Authority chief Claire Dennis Mapa reported that inflation eased to 5.4% last month from 6.1% in May, bringing the year-to-date rate to 7.2%

This is the fifth time that inflation slipped from a peak of 8.7% in January.

June’s print is also the lowest rate in 15 months or since April 2022’s 4.9% inflation rate, according to Mapa.

“Ang pangunahing dahilan ng pagbagal ng antas ng inflation nitong Hunyo 2023 kaysa noong Mayo 2023 ay ang mas mabagal na paggalaw ng presyo ng Food and Non-Alcoholic Beverages,” Mapa said.

(The main reason for the slowdown in inflation rate in June 2023 versus May 2023 was the slower movement in the prices of Food and Non-Alcoholic Beverages.)

The PSA chief said the Food and Non-Alcoholic Beverages index saw an inflation print of 6.7%, down from 7.4% in the previous month. It also contributed 36.2% to the overall downtrend in June.

The second commodity group that contributed to the downtrend was the Transport index, which saw an inflation rate of -3.1% from -0.5 in May. It also accounted for 32.2% in the overall decline.

The third commodity group that caused the slowdown in June’s inflation was Housing, Water, Electricity, Gas and Other Fuels with a rate of 5.6% from 6.5% in May and a share of 26.4% to the overall decline.

Mapa said prices of electricity saw a decline of 10.3% from 13.6% month-on-month, while cost of rent also declined by 5.5% from 5.6%.

Food inflation, which tracks price movements in a “basket” of foods commonly purchased by households, also declined for the fifth consecutive month in June at 6.7% from 7.5% in May.

However, the year-to-date average is still above the government’s target range of 2% to 4%.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, meanwhile, said the Philippines is making progress in managing inflation, which he said is expected to further decline to within 2% to 4% by the end of the year.

“The government remains committed to protecting the purchasing power of the Filipino people by ensuring food security, reducing transport and logistics costs, and lowering energy costs for Filipino households,” Balisacan said.

In May, Marcos directed the creation of an inter-agency committee that will be focusing on addressing inflation and enhancing initiatives to improve the country’s economy.

Marcos' Executive Order No. 28 states that the Inter-Agency Committee on Inflation and Market Outlook shall serve as an advisory body to the Economic Development Group on measures that “would keep inflation, particularly of food and energy, within the government's inflation targets.” —VAL, GMA Integrated News