MANILA — Department of Finance Secretary Carlos “Sonny” Domingez III on Tuesday said that the rising inflation rates will not hinder the Duterte administration from implementing projects that will be beneficial to Filipinos in the long run.
“We shall continue to prioritize investments that will improve health and education of our people, enhance security and public order and build a world class infrastructure,” Dominguez said in a press conference in Seoul, South Korea.
“We realized that this is not an easy task. We have to face the short term challenges of the fast growing economy and we must tackle these problems in order to succeed in the long run. The 4.6 percent inflation rate in May of 2018 cannot hinder us from our objective,” he added.
Dominguez made the statement after government data released Tuesday showed that inflation in May rose to 4.6 percent, higher than April’s rate of 4.5 percent but generally lower than the market’s expectation.
Dominguez said the inflation rate is already showing some signs of “leveling off” amid a decrease in fuel prices.
“As you know, we watched very carefully the prices of fuel, and they have been on the downtrend. In fact, the futures market of the fuel is—the technical term is in backwardation, the price of future deliveries of fuel are actually lower than the current prices. So we are seeing that trend going down,” Dominguez said.
The public and some lawmakers have blamed the Tax Reform for Acceleration and Inclusion (TRAIN) law for the increase in the prices of basic goods and services.
The finance chief, however, assured the public that the government is not casting the figures aside and that it was doing its best to assist the impact of TRAIN through mitigation measures.
“We already know that the main contributors for inflation are higher tobacco products, the cost of… the imported cost of fuel and the higher prices of rice, corn and fish. And we are already taking steps to stay ahead of the situation,” Dominguez said.
He also reiterated that TRAIN is not the sole reason for the increase in inflation but also the effect of high global oil prices driven by unfavorable geopolitical events, along with the import quotas on rice.
He said the best way to address inflation is to pass the Rice Tariffication Act.
“The estimates are it will bring down rice prices by around 7 pesos per kilo for the Filipino families and reduce inflation to below 4 percent by the second half of the year. We will continue our efforts for our people and for the future generations,” Dominguez said.
“The economic team of the Duterte administration would like to assure you, as well as the Filipino people, that the Duterte administration remains committed to reforming our socio-economic structure towards a more inclusive society,” he added.