THE steady flow of goods should be sustained to keep inflation on its downward trend even with the enhanced community quarantine (ECQ) remaining in force for Metro Manila and other high-risk areas, according to an economic bulletin by the Department of Finance (DoF).
In an economic bulletin, DoF said inflation is expected to continue easing “in the next few months” after core inflation slowed to 2.8% in April from three percent in March.
The collapse in oil prices has generally pulled down headline inflation to 2.2% in April from 2.5% in March and 3% in April 2019.
To maintain the easing trend, the DoF said delivery of goods and supplies should remain unhampered after the ECQ was extended to May 15 in Metro Manila and other high-risk areas, with other cities and provinces transitioning to more permissive forms of quarantine.
“Still, it is important that in this time of expanded community quarantine, the supply chain of basic goods and other necessary items, while subject to the requirements of public health, should not be broken,” DoF said.
According to the bulletin, DoF said average price growth in non-food items slowed to 0.7% year-on-year “as the slump in global oil prices drove down domestic pump prices and, consequently, transport costs.”
This “more than offset” the uptick in food prices. Average food prices rose 3.4% year-on-year from 2.6% in March, largely due to higher prices of vergetables, which posted gains of 10.3%, as well as the 1.4% month-on-month increase in rice prices.
“Since November 2018, average rice prices have been falling (such that month-on-month rice price change was negative) until March before registering a positive month-on-month price change in April,” it said.
Overall, the DoF said month-on-month inflation was negative for the third month in a row in April.
In the Yyear to date, headline inflation averaged 2.6%, within the central bank’s 2-4% target range and higher than the revised 2% forecast for 2020. — Beatrice M. Laforga