Finance Undersecretary Gil Beltran
MANILA – Finance authorities continue to have policy leeway to support domestic growth as inflation remains manageable, a ranking Department of Finance (DOF) official said Tuesday.
In an economic bulletin, Finance Undersecretary Gil Beltran described as still moderate the uptick in last June’s rate of price increases to 2.5 percent on an annual basis from the previous month’s 2.1 percent.
“Inflation continues to be manageable despite supply issues arising from the pandemic. This allows significant elbow room for policymakers to sustain economic policies supportive (of) growth,” Beltran said.
The acceleration of the June inflation rate is still slower than the 2.7 percent during the same period last year.
This development was traced to quickening in the transportation index due to the rise of crude oil prices in the international market.
Beltran, however, said that “easing in food prices helped cushion the effect of the increase in non-food prices.”
He said average food prices increased by 2.7 percent last June, slower than its 2.9-percent pace last May.
Average inflation in the first half of the year stood at 2.5 percent, within the government’s 2 percent to 4 percent target band until 2022.
Monetary officials forecast inflation to average at 2.3 percent this year, 2.6 percent in 2021, and 3 percent in 2022.
Except for the uptick last June, inflation has been on a deceleration path since last January.
This gave monetary officials the flexibility to reduce the Bangko Sentral ng Pilipinas’ (BSP) key policy rates by a total of 175 basis points since the start of the year, 150 basis points of which was made since March alone.
The rate cuts were meant to help lift the domestic economy from the impact of the pandemic by encouraging more banks to lend and for the public to borrow from financial institutions to ensure that economic activities remain healthy. (PNA)
