Price hike feared amid El Nino, power crisis threats

MANILA – The National Economic and Development Authority (Neda) fears that the looming power crisis and the dry spell to be brought by El Nino might blow the prices of commodities up.

Neda Director General and Economic Planning Secretary Arsenio M. Balisacan however added that the prices of basic goods “remain well-anchored as policies continue to be supportive of a stable inflation rate.

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“While the current episode of mild El Niño and power woes still pose risks to inflation, the continuing efforts to ensure that appropriate policy actions are implemented are expected to temper inflationary pressures over the near- to medium-term,” he added.

The downward trend in the prices of food primarily staple rice and meat are some of the reasons for the slower rise in the prices, according to Balisacan.

“The easing annual growth rate of rice prices was supported by favorable total rice stocks inventory,” Balisacan explained.

“Food inflation could have been lower if not for the relatively higher prices of vegetables and fish, which is due in part to the likely shift in consumers’ preferences given the onset of the Lenten season.”

He also added that “[t]he continuing decline in international oil prices is also a positive development for the country considering our dependence on imported oil.”

Cheaper oil also helped maintain the inflation rate as it becomes a determining factor in increasing the prices of other goods.

“Inflation remained low and stable in the first three months of the year in line with expectations over the policy horizon, which is likely to support consumption growth,” Balisacan said.