NEDA confident inflation will settle within target in 2024

By Anna Leah Gonzales, Philippine News Agency

FILE: FRESH BUY. Consumers buy pork meat at a Kadiwa store inside the Bureau of Animal and Industry in Visayas Avenue, Diliman, Quezon City on Friday (Oct. 11, 2024). The Kadiwa store sells fresh meat products for PHP300 to PHP350 per kilo, lower compared to public markets. (PNA photo by Ben Briones)

MANILA – The National Economic and Development Authority (NEDA) is confident that inflation will settle within the government’s target this year.

“So, if you would recall, ang target natin is between 2 and 4 percent na average for the year at, yes, malaki ang tiwala namin na talagang mahi-hit natin iyong target na iyan.(So, if you would recall, our target is between 2 to 4 percent average for the year and yes, we are confident that we can really hit that target),” NEDA Undersecretary Rosemarie Edillon said at the the Bagong Pilipinas Ngayon briefing on Friday.

Inflation fell to a four-year low of 1.9 percent in September this year, bringing the year-to-date inflation figure to 3.4 percent which is well within the government’s target.

Edillon said President Ferdinand R. Marcos Jr.’s move to create the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO), helped in easing inflation.

Under Marcos’ Executive Order (EO) 28 issued in May last year, the IAC-IMO is tasked to monitor the main drivers of rising prices of basic goods, particularly of food and energy, and their proximate sources and causes.

“Nakita namin na nag-work naman itong ganitong klaseng mekanismo na anticipated namin iyong mga developments and then agad, parang may direct line kami kay Presidente eh. Laging regular iyong nagiging meeting tapos nagkakaroon kami ng listahan ng recommendation ng ano-ano iyong mga dapat na mai-prioritize para maipababa nga itong inflation. (We saw that this kind of mechanism worked, we were able to anticipate developments and then immediately, we have a direct line to the President. We always have regular meetings and then we have a list of recommendations of what should be done, what should be prioritized to lower inflation),” she said.

Edillon said the easing inflation also contributed to a hike in employment.

Latest data from the Philippine Statistics Authority showed that the country’s employment rate rose to 96 percent in August this year from 95.6 percent last year while unemployment rate fell to 4.0 percent from 4.4 percent.

Edillon said the recovery in the tourism industry and the easing inflation helped create more jobs.

“Tapos, iyong ibang sector like wholesale and retail trade activities ay nakatulong din sa paglago ng employment. Tapos ang tingin namin dito, nakatulong din dito iyong inflation kasi nga dahil sa easing iyong ating inflation so mas naging kampante iyong mga consumers to spend. Tapos siyempre, kapag halimbawa tumataas iyong demand so may karampatang increase din in employment. (Then, other sectors like wholesale and retail trade activities also helped in the growth of employment. We think that inflation also helped. Because of the easing inflation, consumers were able to spend more. Of course, for example when demand increases, there is also an increase in employment),” said Edillon.

Policy easing

An economist, meanwhile, believed that the further easing of inflation will allow the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to further ease policy rates during the next meeting next week.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said the BSP will likely further cut key interest rates by at least 25 basis points on Oct. 16.

Ricafort said that the 1.9 percent inflation rate in September which was better than market estimates, can “justify further monetary easing or even more aggressive local policy rate cut/s.”

“For the coming months, it is possible for inflation to sustain at 2 percent levels for the rest of 2024, or well within the BSP inflation target range of 2 percent to 4 percent that could justify further BSP rate cuts that would match any future Fed rate cuts from 2024 to 2026,” he said.