MANILA — Economic managers remain watchful of potential risks that can cause price pressures in the coming months, such as weather-related shocks, even as the inflation rate eased to its slowest pace in 22 months.
“We note that the prevalence of adverse weather conditions in the country remains an upside risk to inflation, especially with the start of the rainy season,” the National Economic and Development Authority (NEDA) said Friday.
It underscored the need for the country to prepare for the possible onslaught of nine to 13 typhoons in the next few months, as well as the above-normal amount of rainfall brought by the southwest monsoon or “habagat”.
The NEDA also pointed out that the weak El Niño phenomenon has been forecast to persist until next month, with a chance to continue until the first quarter of 2020.
“We reiterate our call to beef up production support and farm recovery programs in areas affected by El Niño. We also pitch for an assessment on the vulnerability and sustainability of farm areas to ensure that farming activities are adaptive to the environment and resilient to weather disturbances,” it added.
Apart from weather-related shocks, the NEDA said the government will continue putting in place preemptive measures to mitigate the impact of uncertainties in the international oil market.
It will also undertake measures to prevent the spread of the African swine fever in the country while moderating its effects on inflation, it said.
The country’s headline inflation declined to 2.7 percent in June from 3.2 percent in May, mainly due to continuing softer price adjustments in some commodity groups, especially food and non-alcoholic beverages.
“We continue to experience the effects of the administrative measures the government had set in motion starting late last year. Further, the implementation of the Rice Tariffication Law allowed the entry of ample imported rice into the country that helped bring rice prices down,” the NEDA added.
The recorded deceleration of inflation in rentals for housing, transport services, electricity, gas, and other fuels, and tobacco also contributed to last month’s inflation slowdown.
Last month’s figure brought year-to-date inflation to 3.4 percent, which remained within the government’s full-year 2019 inflation target range of 2 percent to 4 percent.
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