INFLATION figures for the month of May will be released Tuesday, and the National Economic and Development Authority (Neda) hinted that it will show a continuing “downward trend.”
“We are expecting and predicting that inflation will go down 3, 4, 5 percent by the end of the year so that we are back to 2-4 percent inflation target the year thereafter,” Neda Secretary Arsenio Balisacan said in a chance interview after the Philippine-Israel business forum Monday.
Headline inflation in the Philippines this year started at a high of 8.7 and 8.6 for January and February. It went down to 7.6 and 6.6 in March and April.
Balisacan said they are making provisions for the effects of El Niño, so that it will not affect the inflation target of the government.
Meteorologists from the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) are predicting a higher chance of mild drought —brought about by the warming of the seas—called El Niño phenomenon by August this year.
“The effects of the El Niño in the past should not be repeated this time,” Balisacan said, including production shortfalls in basic commodities and food inflation.
He said the government should now be able to project what areas will be affected by the El Niño and identify the interventions needed.
“Link those areas with available supplies elsewhere including importing if we need to,” Balisacan said.
Provisioning of food to affected populations will be taken care of by the Department of Social Welfare.
He said President Ferdinand “Bongbong” Marcos Jr. has formed an interagency committee on inflation and market outlook which he is heading.
The committee will provide President “ex ante” analyses by anticipating supply and demand issues “months before” such as prepositioning the market, importation requirements, and fast-tracking assistance to farmers.
He said the Development Budget Coordination Committee (DBCC) is meeting this week to see if there is a need to change the targets of the economic team based on the inflation data and issues such as the impending El Niño food crisis.