Sector-specific measures needed to ease El Niño effects

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Rate of price increases in the Philippines remains manageable, and even below the government’s target, despite the El Niño but an economist of the Department of Finance (DOF) said sector-specific measures are needed to lessen inflationary risks.

DOF chief economist and Undersecretary Gil Beltran said further drop of inflation in February 2016 to 0.9 percent from the previous month’s 1.3 percent and the Finance’s department’s 1.4-percent forecast is largely due to slower food inflation.

He projected food prices to post faster rate of 2.4 percent but it instead declined from 1.7 percent to 1.5 percent.

“Despite the ongoing dry spell, the country managed to put food price inflation under control,” he said.


The government’s inflation target for 2016-18 is a range between two to four percent.

Beltran said average food prices stood at about 1.5 percent in the second month this 2016, slower than last January’s 1.7 percent.

He cited that since overall price stability in the country remains, authorities have a “larger room for maneuver to accommodate external economic shocks.”

He, however, pointed out that “while the overall price level appears stable, sector specific measures will have to be carried out.”

“In this dry season, the agriculture sector is especially vulnerable,” he said.

“Innovative approaches to counter the dry spell may be necessary in vegetable producing areas to dampen inflationary impact of supply tightness,” he added.

PNA

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