Slower inflation rate to boost PH 2019 growth: DOF exec

CONTINUED deceleration of inflation rate will allow the Philippine economy to post stronger growth in the second half of 2019.

This was cited by Finance Undersecretary and Department of Finance (DOF) economist Gil Beltran in an economic bulletin released Friday.

“Slower inflation will give room for government to aim at higher GDP growth,” he said.

Last August, the rate of price increases further slowed to 1.7 percent from the previous month’s 2.4 percent, bringing the average in the first eight months this

year to three percent.

The average inflation rate to date is the mid-point of the government’s 2 to 4 percent target band until 2021.

Citing Philippine Statistics Authority (PSA) data, Beltran traced the slowdown of inflation rate to lower rate posted by both food and nonfood items.

He said rice prices registered the highest year-on-year drop at 5.2 percent. This is a big change from the situation last year when rice prices pushed inflation to several year highs, with last year’s peak posted in September and October at 6.7 percent.

“Inflationary momentum also appears to be weaker as shown by the lower core inflation and month-on-month price change,” he said.

Core inflation, which excludes volatile items like food and oil, slowed to 2.9 percent last August from the previous month’s 3.2 percent while month-on-month change in the headline inflation increased by 0.17 percent from last July’s 0.25 percent.

“If the MOM (monthon-month) price increase is kept to at most 0.2 percent, year-on-year price change will continue its decline until October,” Beltran said.

“Meanwhile, the catchup plan for implementing infrastructure projects will boost public investment growth in the second semester and push the economy closer to the six to seven percent GDP (gross domestic product) growth goal,” he added.

Domestic growth posted slower figures since the first quarter of the year due to the impact of the delay in the approval of this year’s national budget.

First quarter growth this year slowed to 5.6 percent from the previous quarter’s 6.2 percent. Second quarter growth further declined to 5.5 percent, bringing the average in the first half of the year at 5.5 percent./pna