February 5, 2018

We, the economic managers, are glad to report that the country’s inflation rate in January further slowed down to 4.4 percent. This gives us an auspicious start in our efforts this year to keep inflation manageable and bring it back to the government’s target range of 2 to 4 percent for 2019.

January’s inflation outturn is the slowest in the past 10 months and considerably lower than the 5.1 percent reading in the previous month. This is also slightly below the 4.5 percent median market forecast.
While the inflation’s decelerating trend is something we have anticipated, we remain driven to be bolder and more focused on our overall anti-inflationary measures.

Slower price increases in food and non-alcoholic beverages softened the overall inflation rate. Food and non-alcoholic beverages inflation averaged at 5.6 percent in January 2019 from 6.7 percent in December 2018. This is on account of the continuous improvement in the country’s food supply, particularly rice, corn, and fish. Notably, rice inflation moderated to 4.7 percent in January 2019 from 6 percent in the preceding month. Corn inflation also softened to 0.9 percent from 2.7 percent in December 2018 while fish prices dipped to 7.8 percent in January 2019 from double-digit last year.

The easing of headline inflation was widely felt across all regions. In particular, inflation in Metro Manila and other areas slowed to 4.6 and 4.4 percent, respectively. Inflation in the Autonomous Region in Muslim Mindanao was the highest at 6.1 percent.

We also note that the price index of petroleum and fuels for transport equipment significantly dropped by 1.8 percent last month from 4.1 percent in December 2018. This partly contributed to lower transport cost and utility rates that further drove down inflation of non-food items.

Therefore, we are confident that inflation will further ease in the near term and settle at 3.2 percent and 3.0 percent in 2019 and 2020, respectively, as seen by the Bangko Sentral ng Pilipinas.

The economic team continues to push for the full implementation of non-monetary and administrative measures to stave off possible supply bottlenecks that have caused prices of key agricultural commodities to surge last year.

With the expected enactment into law of the rice tariffication bill soon, the government is preparing for a quick and smooth transition to the new import tariff regime, along with the operationalization of the National Single Window to facilitate seamless trade transactions.

Other high-value crops such as fruits and vegetables, which experienced weather-related supply shocks last year, also need to be made more adaptive and resilient to changing weather conditions.

We urge the Department of Agriculture to facilitate a comprehensive crop management system to align farming activities with the prevailing supply-demand condition and weather pattern. In the fishery sector, sustainable management of coastal and other marine resources should be intensified, more so with the reported decline of available fish in open

These are measures for the short term. There is a resounding consensus among members of the Economic Development Cluster that the agriculture sector needs greater attention now more than ever. The agriculture sector must work towards resiliency and be adaptive to extreme weather events.

We also reiterate the timely release of the unconditional cash transfers and fuel vouchers for public utility jeepneys to cushion the impact of inflation on the society’s vulnerable sectors and mitigate possible second-round effects.

All these are part of the government’s commitment to boost economic growth in all dimensions and improve the quality of living for everyone.