December 2019 inflation ‘well within our target range’: Palace

In October 2018, the country’s inflation rate remained at 6.7 percent, the highest in almost a decade, as slower growth in food prices was reported. (Shutterstock photo)

MANILA — Malacañang on Tuesday downplayed the accelerated December 2019 inflation rate due to higher prices of food and transportation, assuring the public that it is still within the government’s target.

Presidential Spokesperson Salvador Panelo said the uptick in inflation rate in December 2019 to 2.5 percent from November 2019’s 1.3 percent should “not be a cause for alarm.”

“It remains well within our target range of 2 percent to 4 percent,” Panelo said.

In October 2018, the country’s inflation rate remained at 6.7 percent, the highest in almost a decade, as slower growth in food prices was reported.

“We consider high inflation, which peaked at 6.7 percent in 2018, as a thing of the past,” he assured.

Citing the National Economic and Development Authority (NEDA), Panelo said the acceleration of inflation to 2.5 percent can be attributed to an increase in the prices of both food and non-food items due to the impact of typhoons and rising oil prices in December 2019.

He also assured that the country’s economic managers continue to keep a tight watch over inflation, amid emerging global threats.

The country’s headline inflation jumped to 2.5 percent last month, up from 1.3 percent in November last year, but slower compared with 5.

1 percent in the same month in 2018, according to the Philippine Statistics Authority (PSA).

PSA said the uptrend in the inflation in December 2019 was mainly driven by the 1.7 percent annual increment recorded in the heavily-weighted food and non-alcoholic beverages index.

In November, food and non-alcoholic beverages index registered an annual rate of zero percent.

Likewise, transport inflation picked up by 2.2 percent during the month from -2.4 percent in November.

There were also jumps in the prices of alcoholic beverages and tobacco at 18.4 percent; housing, water, electricity, gas, and other fuels, 1.9 percent; and furnishing, household equipment and routine maintenance of the house, 3.1 percent.

Despite rising US-Iran tensions, the Bangko Sentral ng Pilipinas (BSP) is expecting inflation will remain within the target band of 2.

0 percent to 4.0 percent this year.

BSP Governor Benjamin Diokno said he expects low probability that inflation could breach this year’s target on the threat that the US-Iran tensions would keep global oil prices at higher levels.

Sustained economic growth

During the 45th Cabinet meeting on Monday night, Socioeconomic Planning Secretary and National Economic and Development Authority Director General Ernesto Pernia trumpeted the Duterte administration’s achievements on reducing poverty and generating employment.

Among the most worthy achievements is having lifted 6 million Filipinos out of poverty as a result of the unprecedented decline of the country’s poverty rate over three years.

All regions except the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) have experienced significant decreases in poverty incidence, he added.

“One of the major factors that contributed to this feat is our sustained economic growth which generated jobs for the poor and reduced income inequality across regions,” Pernia said.

In 2019, 1.3 million jobs were created, partly because of the administration’s “Build, Build, Build” program.

Earlier, Panelo said Filipinos can again look forward to a better quality of life for them and an improved economy for the country this year under Duterte’s leadership.