‘PH inflation could ease further below 0.9%’
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 22 Oct 2019 16:29:44 +0000
THE country’s inflation could continue decelerating for the rest of the year on the back of falling rice prices, according to a member of the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB).
In an interview on the sidelines of the Bankers Institute of the Philippines’ fourth general membership meeting in Makati City on Tuesday, MB member Bruce Tolentino said he believed consumer price growth could surpass the three-year low of 0.9 percent in September.
“It could go lower, even purely [on] base effects. If you look at the rice prices, [they are] still going lower and oil (prices) [are] not going up,” Tolentino said.
For rice alone, the MB member said its prices would continue to drop on account of the implementation of Republic Act 11203, or the “Rice Tariffication Law,” which started in March.
“With rice prices now lower by P6 to P7 per kilo, [these would go even] lower. How low [would they] go? It [would] go down to Vietnam or Thailand[‘s] prices, plus [a] tariff of 35 percent,” he said.
President Rodrigo Duterte signed RA 11203 on February 15, the last possible day he could do so or veto the measure before it lapsed into law amid concerns raised by farmers and even by the Department of Agriculture.
Under that law, duties replaces quantitative restrictions that had limited imports of the staple.
Latest Philippine Statistics Authority data show that rice prices decreased in the fourth week of September, with the average retail price of regular milled rice dipping by 0.1 percent from P37.66 per kilogram the week before.
Tolentino said monetary authorities were confident that inflation “will stay within the target range at least for this year, and definitely for next year.”
Last month, the MB cut its 2019 inflation forecast to 2.5 percent from 2.6 percent, but retained its 2020 and 2021 projections at 2.9 percent.
Year-to-date inflation rate is now averaging 2.8 percent, falling within the central bank’s 2 to 4-percent target range.