INFLATION in the country – market prices to housewives – dipped to 2.3 percent this July, according to the Philippine Statistics Authority. At this time last year, the July inflation was 5.7 percent and steadily rising. It was to reach 6.4 percent in August, 6.7 percent in September, before it started going down in the last three months of the year.
The low inflation figure for last July was due mostly to the lowering of food prices and non-alcoholic beverages to 1.9 percent. The biggest drop was in rice prices – down to negative – 2.9 percent – resulting from the massive importations under the Rice Tariffication Law. Contributing to the low inflation were lower prices for housing, water, electricity, and other fuels last July.
This is all welcome news for the nation, but as Economic Planning Secretary Ernesto Pernia warned, we are now in the middle of the monsoon and typhoon season in the Philippines. The rains are welcome after the recent hot and water-short months, but they could cause floods and landslides in many areas. Three to five typhoons and other tropical cyclones also traditionally hit the Philippines at this time of the year, devastating rice fields in many areas.
There is also some uncertainty in the global oil market. It was the skyrocketing prices of oil in the Middle East last year plus the imposition of a new Philippine tariff on diesel and other fuels that helped push local pump prices up. This in turn raised the prices of all goods being trucked from rural farms to urban markets.
And finally, there is the constant danger posed by price manipulators, from wholesalers down to the market stallholders. This can be averted by non-stop inspection and surveillance in markets.
We are now in the middle of the third quarter of the year and the government is busy confronting the problems of a dengue epidemic, sea mishaps, corruption in government, and the continuing dispute over the South China Sea.
But we can find comfort in the fact that this year we are not facing the problem of high prices that we did last year. The 2.4 percent inflation rate for July was the lowest level in 31 months. And it should go down even further. In an interview by Manila Bulletin editors early last June, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the inflation rate will be “close to 2 percent” by the end of the quarter.
