Food inflation is alarming, not the 6.4% average rate —Philexport official

An official of Philippine Exporters Confederation Inc. (Philexport) on Tuesday downplayed the 6.4-percent inflation rate in August, but emphasized that food inflation is a more alarming cause of higher prices in the country.

The average inflation rate of 6.4 percent was caused by food inflation, and food inflation was caused by policy problem, said Philexport president Sergio Ortiz-Luis in a press conference in Taguig City.

“Ang rice hindi lang tumaas, nawala pa, may bukbok pang kasama. Ang fish, there is a problem with policy, because commercial fishermen were blocked from fishing in municipal waters,” Ortiz-Luis said.

Prices of rice, energy, and transport were mainly responsible for the higher-than-expected inflation in August 2018, according to the central bank.

The food and non-alcoholic beverages index was up by 8.5 percent, miscellaneous goods and services by 4.0 percent, household equipment up by 3.5 percent, and recreation and culture by 2.4 percent, the Philippine Statistics Authority reported last week.

“The 6.4 percent is the weighted average, but these numbers are irrelevant for ordinary people because what they care about is food prices. You have to remember, ang umiiyak dito ay taong bayan. Ang iyak ng taong bayan is cost of food is going up,” Ortiz-Luis noted.

The 6.4-percent inflation rate in August is normal for a growing economy like the Philippines, said Ortiz-Luis, who also sits as honorary chairman of the Philippine Chamber of Commerce and Industry and the Employers Confederation of the Philippines.

“The 6.4-percent average inflation, as number, is not alarming,” he said. “This is not alarming in the sense na kitang kita mo what is causing it—rice, fish, fuel.”

The increase in prices of those items is temporary.

Inflation clocked in at 6.4 percent in August, the fastest in nine years since it came in at 6.6 percent in March 2009.

“We conducted a study that if we want to grow by 7 to 8 percent, a 3 to 4 percent inflation cannot be sustained,” Ortiz-Luis said, noting that an average inflation rate of 5 percent would be normal for a growing economy.

“Even 8 percent ... would be tolerable,” he added, saying high inflation rate in the country is temporary. —VDS, GMA News