Balisacan: Inflation unlikely to ‘go higher’
INFLATION will likely not increase this month, Socioeconomic Planning Secretary Arsenio Balisacan said on Thursday, disputing a forecast made a day earlier by Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr.
“I don’t think that it will go higher than what we had last month, especially that this push for legislated wages appears not to be gaining ground,” he told reporters on the sidelines of the signing of Public-Private Partnership (PPP) Code’s implementing rules.
“That’s so far what we are seeing, but, of course, I might be surprised again by PSA (Philippine Statistics Authority). So we’ll see,” Balisacan added.
On Wednesday, Remolona said that inflation could rise from February’s 3.4 percent due to base effects.
“It will be close to 4.0 percent. I think 3.9 percent, but we’ll see,” he also told reporters.
February’s result snapped a four-month decline but remained within the BSP’s 2.0- to 4.0-percent target. Monetary authorities have warned that consumer price growth could top 4.0 percent in the second quarter due to the impact of the El Niño weather pattern on food prices.
Higher wages were also flagged as an inflation risk but only those ordered by the regional wage boards, not the legislated increases being pushed in Congress.
The Senate in February approved a P100 increase in the daily minimum wage of private sector workers, claiming that it would help them cope with rising prices.
The House of Representatives, meanwhile, has yet to act on its version of the bill but its members have proposed even higher increases of P150 to P350 per day.
Economic managers, including Balisacan, have warned that a legislated wage hike would weigh on economic growth and lead to job losses.
On Thursday, he said that any wage hike would have to go through the tripartite process used by the regional wage boards and reiterated that “our worry is that it (a wage hike) has a negative impact on inflation, even on employment, and overall growth.”
Balisacan also said that the current system of adjusting minimum wages by region, in place since 1987 when a wage hike was last legislated, was working.
“[I]f you look at the approved wages across the board from all over the country, there was a recent study showing that it’s higher than the rate of inflation,” he said.
The National Wages and Productivity Commission in January reported that 15 regional wage boards ordered increases last year, nine of them motu proprio or without labor groups petitioning for an adjustment.
The Metro Manila wage board kicked off the wage hikes in June via a P40 per day increase and the most recent was in Northern Mindanao in December.
The Davao Region wage board was said to be the only one still to issue an order. Public hearings, however, were expected to start in the first quarter of 2024.