Downtrend in inflation could give Diokno ‘more elbow room’

FILE: Former Department of Budget and Management Secretary Benjamin Diokno is the new Governor of the Bangko Sentral ng Pilipinas. He succeeds the late Nestor A. Espenilla Jr. who died last February 23. (PNA photo by Oliver F. Marquez)

MANILA – A senator on Wednesday said the continuing downtrend in the headline inflation is a welcome development as the Bangko Sentral ng Pilipinas (BSP), under the leadership of newly-appointed Governor Benjamin Diokno, will have “more elbow room” to make adjustments in the country’s policy rates to spur economic growth.

In a statement, Senator Sherwin Gatchalian said the country pulled a “better-than-expected” inflation rate for two consecutive months as food prices continue to stabilize while the peso continues to strengthen against the dollar.

Inflation in the Philippines decelerated anew in February to 3.8 percent, slower than the 4.4 percent recorded in January 2019.

“We are hopeful that the downward trend of our inflation rate will continue in March, especially now that the Rice Tariffication is set to be implemented this month with the signing of the law’s Implementing Rules and Regulations,” Gatchalian said.

Senate President Vicente Sotto III said the slowdown in inflation only means the Philippine economy is “getting even better.”

Senator Sonny Angara also noted that it is a “very good development” for the people and the country’s economy since it is within the target range of our economic managers.

“Lower prices reflect both international developments and local efforts to manage inflation from our government,” Angara said.

Angara stressed the need to step up efforts to crack down on unscrupulous merchants engaging in profiteering, as well as continue support for farmers and the agricultural sector since food inflation is the “most felt (by) all”, especially by the poor.

Senator Gregorio Honasan II, meanwhile, said while the inflation downtrend is “encouraging”, the country is “not yet out of the woods.”

“Too many global, economic, political, cultural, technological, security variables to manage and predict. Let’s continue to do good housekeeping and work on long-term policy, stability, continuity, predictability and building or rebuilding strong democratic institutions,” Honasan said.

The Philippine Statistics Authority (PSA) attributed the slowdown in inflation to the slower annual increase in the “index of the heavily-weighted food and non-alcoholic beverages at 4.

7 percent”.

The PSA said “annual gains were also slower in the indices of other commodity groups, except for communication and education”.

“The education index continued to post a negative annual rate of 3.

8 percent. Moreover, inflation for communication remained at 0.

4 percent,” it added.