Economists warn of continuous inflationary uptick

The new administration should look into addressing the continuous increase in consumer prices given a number of compounding factors such as the depreciation of the Philippine peso and higher petroleum prices, economists warned.

According to Pamantasan ng Lungsod ng Maynila (PLM) President and economist Emmanuel Leyco, the government should step up and address the uptick in consumer prices as domestic consumption drives 60% of the economy.

“‘Pag ka humina masyado ang purchasing power ng ating mga consumer, may epekto ‘yan sa paglago ng ating ekonomiya,” he said in Bernadette Reyes's report on GMA’s “24 Oras Weekend” on Sunday.

“Tandaan natin lagi, napakalaki na bahagi ng ating mga household consumers ang nagkakarga ng ating ekonomiya,” he continued.

[If the purchasing power of our consumers weakens, this will have an impact on economic growth. Let us remember that household consumers drive a big portion of our economy.]

Inflation has continued to accelerate so far this year, hitting a three-year high of 5.4% in May. This is expected to have quickened even further in June.
 

This comes amid the depreciation of the Philippine peso, which has weakened to the P55:$1 level. It closed last week at P55.09:$1, the weakest in nearly 17 years.

“Kung ‘yan ay imported, double whammy na yan. Tumaas ang palitan ng dolyar sa piso, pagkatapos tumaas din ang presyo ng petrolyo,” Leyco said.

[That is a double whammy for imported goods. The peso has depreciated against the dollar and prices of petroleum products have also increased.]

Oil firms last Tuesday implemented another round of hikes, marking the fourth straight week of increases for gasoline, and fifth for both diesel and kerosene.

Data from the Department of Energy (DOE) show that year-to-date adjustments stand at a net increase of P29.50 per liter for gasoline, P44.25 per liter for diesel, and P39.65 per liter for kerosene as of June 21, 2022.

For his part, Philippine Chamber of Commerce and Industry (PCCI) President George Barcelon said that while exporters benefit from the stronger dollar, shipping costs have increased as well.

“Ang problema, itong last year sa exporting, mahal ang shipping costs. Ang shipping costs papuntang North America tumaas ng at least additional 200% to 300%,” he said in the same report.

“Mula nung Suez Canal, ‘yung shipping, ‘yung supply chain sa ngayon, parang wala pang solusyon eh,” he continued.

[The problem in exporting is that in the past year, shipping costs have become expensive. Shipping costs to North America have increased by at least 200% to 300%. Since the Suez Canal, the shipping, the supply chain seems to have no solution.] — BM, GMA News