Government’s report that inflation in April eased to 6.6 percent—from 7.6 percent in March—is something too unbelievable considering that food prices in the wet market and groceries have gone up, not down, with vendors saying they obtained their supplies at higher prices again. “Sandali lang yun, bumalik na sa mataas na presyo ulit ngayon,” vendors told OpinYon on Thursday.
Rice was selling for P40 and above per kilo, fish (maya maya) for P500 a kilo, onions at P200, garlic at P200, brown sugar at P100 and eggs at P110 a dozen. Rice at Kadiwa (in the Department of Agriculture, QC) is said to be selling for P25 but long lines and quota of five kilos await buyers.
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The Bangko Sentral ng Pilipinas, in a statement, said April inflation was 6.6 percent, which is within its forecast range of 6.3 to 7.1 percent. The balance of risks to the inflation outlook for 2023 and 2024 also remains tilted heavily towards the upside.
Despite the recent slowdown in food inflation, which is highly questionable, the potential effect of ongoing supply shortages (especially with El Nino in June or July) continues to pose an upside risk to the outlook. Other upside risks emanate from the impact of higher transport fares, high electricity rates (with consumers taking to social media to complain about sky high electric bills) and a project above-average wage adjustment in 2023. On the downside, the impact of a weaker-than-expected global economic recovery continues to be the primary factor that could dampen inflation.
For the four months from January to April, inflation averaged at 7.9 percent.
Food inflation declined to 8.0 percent in April 2023 from 9.5 percent in the previous month amid slower inflation of vegetables, fish, eggs and other dairy products, meat, and sugar. Let’s see about May inflation.
"With these developments, NEDA is optimistic that the downward trend will continue and settle further within the government’s outlook," said NEDA Secretary Arsenio M. Balisacan.
Last month, the Development Budget Coordination Committee (DBCC) revised its 2023 inflation outlook to 5.0 to 7.0 percent from the previous assumption of 2.5 to 4.5 percent, in view of persisting high prices of food, energy, and transport costs. The average inflation rate for the first four months of the year settled at 7.9 percent.
NEDA said it recognizes the risks to the inflation outlook to remain tilted upside amid potential transport fare increases, wage adjustments, and domestic food supply pressures amidst the threat of El Niño and the resurgence of African Swine Flu.
Balisacan cited the importance of designing policies and interventions to help those that will be affected by El Niño, through the provision of seeds or seedlings of non-water- loving crops or crop varieties. Additionally, the government must remain proactive in curbing animal disease outbreaks through stronger border protection and monitoring," he added.
The Inter Agency Committee on Inflation and Market Outlook (IAC-IMO) has recommended timely and data-supported importations to fill in supply gaps, strategic prepositioning of rice buffer stocks in time for the El Niño, improvement and expansion of the Kadiwa program, and fast-tracking the distribution of targeted subsidies to fishers and farmers in the short term.
For the medium term, IAC-IMO recommended enhancing the productivity and resiliency of the agriculture and fisheries sector, promoting investments in facilities, transport, and logistics systems, expanding water infrastructure, and pushing for the passage of critical reforms such as the Livestock, Poultry and Dairy Competitiveness and Development Act.