Weather disturbances pose upside risks to inflation – NEDA

MANILA, Philippines — Weather disturbances expected in the second half of the year continue to threaten the downtrend in consumer prices, the National Economic and Development Authority (NEDA) said.

“We note that the prevalence of adverse weather conditions in the country remains an upside risk to inflation, especially with the start of the rainy season,” said Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia.

He noted that the country should prepare for the expected occurrence of between nine to 13 typhoons in the coming months which would bring abnormal amount of rainfall.

At the same time, the country continues to implement measures to prevent the spread of African swine fever in the country to protect livestock and meat supply.

NEDA also urged pertinent agencies to beef up production support and farm recovery programs in areas affected by El Niño.

“We also pitch for an assessment on the vulnerability and sustainability of farm areas to ensure that farming activities are adaptive to the environment and resilient to weather disturbances,” said Pernia.

The government, he said, also continues to monitor uncertainties in the global oil market.

After an uptick in May, growth in consumer prices eased anew to 2.7 percent in June mainly because of slower growth in food and transportation prices.

This was slowest growth in the headline inflation rate almost two years, bringing the year-to-date average to 3.4 percent.

This compares with the headline rate of 3.2 percent in May and 5.2 percent in June 2018 and settles well-within the government target range of two up to four percent this year.

National Statistician Dennis Mapa attributed the downturn to the continued effects of the liberalization of rise imports and base effects from last year.

The education index also sustained its negative growth in June, reflecting the effect of the provision of free education in state colleges and universities, he said.