INFLATION in the coming third quarter of the year (July-August-September) should be around 2 percent, new Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said Tuesday at a round-table discussion at the Manila Bulletin.
We can better appreciate this statistical figure when we recall the inflation rate at this time last year, 2018, when the country was going through one of its more difficult times. At this time last year, the inflation rate was 4.5 percent and steadily rising. By July, it was 5.7 percent. By August, it was 6.4 percent. It hit a high of 6.7 percent in September, before it mercifully started going down in the closing months of the year.
Contrast this with the 2 percent which, Governor Diokno confidently assured us, should be the national inflation rate in July.
Inflation is the term used by economists to describe the cost of goods in the market. Housewives and other ordinary folk see inflation as rising prices. And last year was a specially difficult time for us because of high prices blamed by critics on TRAIN law’s imposition of a P2 tariff per liter of imported fuel.
Government economic managers instead blamed high world oil prices, low value of the Philippine peso, and price manipulation by certain business sectors in the market. It was probably a combination of all these factors. In any case, inflation hit a high of 6.7 percent in September.
Governor Diokno stresses the need for balance between economic expansion and maintaining price stability. The BSP contributed to the growth as its Monetary Board reduced its requirement for both big banks and smaller rural banks, thus releasing a total of P210 billion for additional liquidity in the financial system. But the inflation rate in May remained low at about 3 percent. By the third quarter of the year in July, it should be close to 2 percent.
As national growth continues, especially the construction projects under “Build, Build, Build,” we hope the government will maintain its close watch on market price movements so that we will not go through the period of high inflation – 6.7 percent at its height – that made 2018 such a difficult time for all.
