THE National Economic and Development Authority (NEDA) is confident that inflation will settle within the government’s target this year.
Speaking in Filipino, NEDA Undersecretary Rosemarie Edillon said at the Bagong Pilipinas Ngayon briefing on Friday the target is between 2 and 4 percent average for the year, which is the reason why NEDA believes it is achievable.
Inflation fell to a four-year low of 1.9 percent in September this year, bringing the year-to-date inflation figure to 3.4 percent, which is well within the government’s target.
NEDA Undersecretary Rosemarie Edillon. Photo from Presidential Communications Office
Edillon said President Ferdinand Marcos Jr.’s move to create the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) helped in easing inflation.
Under Marcos’ Executive Order 28 issued in May last year, the IAC-IMO is tasked to monitor the main drivers of rising prices of basic goods, particularly of food and energy, and their proximate sources and causes.
“Nakita namin na nag-work naman itong ganitong klaseng mekanismo na anticipated namin iyong mga developments and then agad, parang may direct line kami kay Presidente eh. Laging regular iyong nagiging meeting tapos nagkakaroon kami ng listahan ng recommendation ng ano-ano iyong mga dapat na mai-prioritize para maipababa nga itong inflation (We saw that this kind of mechanism worked, we were able to anticipate developments and then immediately, we have a direct line to the President. We always have regular meetings and then we have a list of recommendations of what should be done, what should be prioritized to lower inflation),” said Edillon.
Edillon said the easing inflation also contributed to a hike in employment.
Latest data from the Philippine Statistics Authority showed that the country’s employment rate rose to 96 percent in August this year from 95.6 percent last year, while the unemployment rate fell to 4.0 percent from 4.4 percent.
Edillon said the recovery in the tourism industry and the easing inflation helped create more jobs because of the increasing demand.
Policy easing
An economist, meanwhile, believed that the further easing of inflation will allow the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to further ease policy rates during the next meeting next week.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the BSP will likely further cut key interest rates by at least 25 basis points on October 16.
Ricafort said that the 1.9-percent inflation rate in September, which was better than market estimates, can “justify further monetary easing or even more aggressive local policy rate cut/s.”
“For the coming months, it is possible for inflation to sustain at 2 percent levels for the rest of 2024, or well within the BSP inflation target range of 2 percent to 4 percent that could justify further BSP rate cuts that would match any future [Federal Reserve] rate cuts from 2024 to 2026,” he said.
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