Inflation likely peaked in May — NEDA

The National Economic and Development Authority (NEDA) said the country’s inflation may have peaked in May this year as the rate of increase in prices of consumer products during month moved at a much slower pace.

Socioeconomic Planning Secretary Ernesto M. Pernia said the 4.6 percent acceleration of inflation in May was likely the highest for the year, citing the economic team expects the rate of increase in consumer prices would settle within the central bank’s target.

The Bangko Sentral ng Pilipinas (BSP) expects inflation would fall between 2.0 percent and 4.0 percent this year. As of May, the actual rate was slightly higher than the government’s goal at 4.1 percent.

“The rise in inflation has already slowed down,” Pernia told reporters in an interview at the BSP headquarters. “Give it sometime, it will normalize.”

“The 4.6 percent at the most in the view of the central bank would be the highest for the whole 2018,” the government’s chief economist explained. “That’s what we’re seeing, the acceleration has slowed down [in May].”

Inflation last month was only marginally higher compared with the 4.5 percent in April, and at the low end of the central bank’s forecast of 4.6 percent to 5.4 percent.

Earlier, BSP Deputy Governor Diwa G. Guinigundo said that inflation may peak earlier-

than-expected this year owing to lower-thanexpected turnout for the month of May.

But despite the slowdown, the BSP said that inflation may remain elevated until the end of the year amid higher oil prices, as well as the second round effects of the implementation of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion Law.

Earlier, the Duterte administration’s economic managers assured the government was fast-tracking the release of the unconditional cash transfers for the country’s poorest households, along with other social mitigation measures to stay ahead of the temporary elevated inflation rate.

Finance Secretary Carlos G. Dominguez III said he and the rest of the economic team agree that the best way to address inflation is for Congress to swiftly approve the Rice Tariffication Act.

According to Dominguez, the rice tariffication would bring down prices of Filipinos’ staple food by around P7 per kilo and reduce inflation to below 4.0 percent by the second half of the year.

The finance chief also assured the public that the government is “not casting aside” the inflation figure as the government has put in place a “long menu of social mitigation measures” to ease the impact of high prices.

“We already know that the main contributors for inflation are higher tobacco products, 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.