ECONOMIC MANAGERS’ JOINT STATEMENT ON THE NOVEMBER 2018 INFLATION

The economic managers are pleased to report that inflation rate has markedly slowed to 6.0 percent in November 2018, suggesting the efficacy of anti-inflationary measures taken by the government and pointing to continuing reduction going forward. 

Today, the Philippine Statistics Authority announced that year-on-year inflation eased to 6.0 percent in November from 6.7 percent in October 2018, the lowest rate since the 5.7 percent rate in July.  In fact, month-on-month inflation declined by 0.3 percent.

It is comforting for us that the slowdown will alleviate the struggles of poor Filipinos, especially now that the holiday season is just around the corner.

This makes us even more determined in curbing inflation and enforcing all measures to guarantee food security.

As of November 2018, year-to-date inflation averaged 5.2 percent. This is 1.2 percentage points above the high end of the government’s inflation target range of 2.0 to 4.0 percent, but slightly below the 5.3 percent emerging forecast of the Bangko Sentral ng Pilipinas for 2018.

Food and non-alcoholic beverages continue to be the main drivers of inflation. Last month, it decelerated to 8.0 percent from 9.4 percent in October 2018. This was, however, significantly higher than the 3.0 percent in November 2017. 

Food inflation slowed to 7.7 percent in November from the previous month’s 9.2 percent.  This was caused by the improvement in the supply of key agricultural commodities such as rice, fish and seafood, meat, vegetables, corn, and fruits. 

This is a positive development in the government’s commitment to manage inflation. But mitigating measures under various government issuances, including those prescribed in Administrative Order 13, issued by the President should be continuously implemented and strictly monitored. Most importantly, we must ensure the timely arrival of rice imports to compensate for the lost palay harvest in the third quarter of the year.

With the recent passage of the Rice Tariffication bill in Congress, we expect rice prices to go down further still. But this measure, which opens the rice market to qualified players, should be coupled with the full operationalization of the National Window System to allow seamless imports processing and to avoid unwarranted delays.

More so, the country should invest in farm mechanization and adopt the latest technology in crop management that includes the utilization of high-yielding and resilient crops. This will improve the productivity of the agriculture sector, which remains vulnerable to changing weather conditions.

In the fisheries sector, we must also strengthen our sustainable coastal resource management efforts, as global fish production is seen to grow at a slower pace in the next ten years. In this regard, we call on the Department of Agriculture to fast-track the pending release of the Fisheries Administrative Order No. 259 to allow the importation of frozen fish and fishery aquatic products for wet markets during closed and off-season or during the occurrence of calamities.

We are optimistic that inflation will stabilize further in the near term. But we will keep a vigilant eye on upward pressures such as volatility in the global oil market.

More oil companies announcing a price rollback due to falling oil prices in the global market is also welcome news. With this, the Land Transportation Franchising and Regulatory Board (LTFRB) ordered a provisional decrease in the minimum fare for Public Utility Jeepneys (PUJ) from PhP10.00 to PhP9.00 in the National Capital Region, Region III, and Region IV. 

The LTFRB however has yet to decide on the pending petition to bring back fare for PUJs to PhP8.00 and for public utility buses to its old fare matrix.  

In line with these developments, the country’s economic team withdrew the previously announced suspension of the second tranche of increase in fuel excise tax starting January 2019.

Managing inflation expectations, however, is crucial. We ask the business sector to avoid any unwarranted price increases as experienced during the rollout of the first tranche of fuel excise tax increase. 

But we urge the public to be on the lookout and report any profiteering activities.  We assure everyone that we will follow through with our efforts to maintain price stability and raise the quality of life of every Filipino.

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