PRICE gains in general goods need to be capped at 0.3% month-on-month this year for inflation to land within the official 2-4% target range in 2020, according to an economic bulletin issued by the Department of Finance (DoF).
“For inflation to fall within the target range, the month-on-month price change should be at most 0.3% per month,” the DoF said Wednesday.
A rise of 0.3% month-on-month points to 2.7% inflation in January, 2.8% in February and 3.1% in March, it said. In December inflation came in at 2.5%, which was also the 2019 average.
The DoF is banking on productivity programs for the agriculture sector to ease gains in food prices to keep monthly gains within 0.3%.
The 2-4% inflation target applies until 2022, when the current government steps down.
“Productivity programs for agriculture will ease seasonal food price increases in the future. The Department of Agriculture (DA) has set up programs to modernize agriculture, build farm-to-market roads, develop value chains and enhance research and development,” it said.
However, public and private economists have warned that a Middle Eastern conflict are a risk to global oil prices, which could cause overall inflation to accelerate further this year.
For December, the DoF said inflation rose 0.7% month-on-month due to holiday demand for fish and vegetables, whose prices accelerated by 5% and 3.7%, respectively.
It said price gains were tempered by a continued easing in rice prices, which brought overall food inflation to 2.1%.
“In the non-food group, inflation rose 2.4% boosted by a seasonal upsurge in health (3.5%), restaurants (3.3%), and household furnishings (3.2%) prices. This was dampened by lower electricity and fuel prices (0.8%),” it added. — Beatrice M. Laforga
