The inflation rate in the Philippines has risen 6.4 per cent — a nine-year high that risks slowing the country’s economic growth.
Philippine Statistics Authority (PSA) data released today (Wednesday, September 5) showed the increase in prices of basic goods and services jumped at its fastest pace last month since the 6.6 per cent recorded in March 2009.
Inflation in August was also considerably higher than estimates by government and private sector economists, who predicted the rate to be no more than 6.2 per cent.
Since January, inflation has averaged at 4.8 per cent, well above the government’s 2-4 per cent target.
Inflation in Metro Manila was even higher at seven per cent year-on-year in August, while the price increases outside Metro Manila averaged 6.2 per cent that month.
In its report, the PSA noted that prices of food and non-alcoholic beverages rose by 8.5 per cent year-on-year last month. Due to recent tax changes, alcoholic beverages and tobacco were up by 21.6 per cent.
The food alone index jumped 8.2 per cent year-on-year, compared to the 6.8-percent climb a month ago and 3.1 per cent a year ago.
“All the food groups registered higher annual increments in August compared with their previous month’s annual rates, except for the corn index in which annual gain slowed down to 12.6 per cent during the month,” the PSA said.
In August, prices of furnishing, household equipment and home maintenance materials rose 3.5 per cent. Health and restaurant and miscellaneous goods and services were up by four. Recreation and culture were up by a more modest 2.4 per cent, the data showed.
When asked if the high inflation environment was a cause for alarm to economic managers, Budget Secretary Benjamin Diokno replied: “No. You have to look at output and then employment. There are some things that we cannot influence like price of oil — that’s world market; that’s not within policy control. And then, of course, the prices of rice and of fish, they’re global. The declining output of fish — think of global warming.”
Asked if inflation remained manageable, Diokno said: “Yes. I’ve seen worse inflation. I’ve been in government for 50 years. During Marcos’ time, it hit 50 per cent.”
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