8% inflation is manageable – Philexport

As if the 6.4 percent inflation in August was not enough, the Philippine Exporters Confederation said Filipinos can still bear with up to 8 percent inflation saying a higher inflation is needed in a growing economy like the Philippines, not the deflationary 2 percent.

“Up to 8 percent inflation is manageable,” said Philexport President Sergio Ortiz-Luis Jr. in a press conference jointly called by the Philippine Chamber of Commerce and Industry, the Philippine Food Exporters and the Employers Confederation of the Philippines (ECOP).

Ortiz-Luis, the longest-running president of Philexport and ECOP acting president, said a high inflation rate had been proven in the past during President Gloria Arroyo’s time with 8.6 percent.

“There was even a time when inflation rate hit 14 percent that is why we average 7 percent inflation for the period until 2011,” he said noting that the inflation eventually eased up. Thus, he said, the 6.4 percent inflation in August, the highest in 9 years, was not alarming.

This time, he said, it is very clear what is causing the inflation as he cited the supply issues of basic goods and prime commodities particularly rice, sugar, fish, vegetables and services, which are under the control of the government, except fuel.

He urged the Bangko Sentral ng Pilipinas against squeezing the inflation rate by buffing up liquidity in the market stressing that a low inflation of 2 percent does not mean growth because there are sectors that would enter into a deflationary stage