Consecutive decline in inflation is the news we are all waiting for

The Philippine Statistics Authority (PSA) recently announced the continuing decline of our country’s inflation rate. This piece of good news could be the giant pendulum that would swing our economy in the right direction.

According to the PSA, the “headline inflation rate decreased from 6.6 percent in April to 6.1 percent in May, marking the fourth consecutive month of deceleration.” This drop is a “positive development, as it signifies a steady move toward a more favorable inflation environment.” It is worth noting that this figure falls within the forecast range set by the Bangko Sentral ng Pilipinas (BSP), further reinforcing its significance.

Over the weekend, the President expressed satisfaction with the declining inflation rate, calling it “encouraging news.” He emphasized the importance of this trend, particularly complementing the improving employment rate in the country. He noted that the alignment of positive indicators suggests that the “country is moving in the right direction, laying the foundation for a vibrant and resilient economy.”

The PSA noted that one of the key factors contributing to the decline in inflation is the decrease in transportation and food costs. “The prices of gasoline, diesel, and tricycle fares have seen a decline, reflecting a positive impact on the overall inflation rate. Additionally, food and non-alcoholic beverages, which carry substantial weight in inflation calculations, have also experienced a decrease in inflation rates. This is attributed to the slowdown in the inflation of fish and other seafood, meat, milk, dairy products, and eggs.”

The sustained decline in inflation is an outcome of several strategic measures implemented by the government. One of the thrusts of the administration is the full opening of industries and businesses while actively promoting the adoption of modern technology to propel the country’s digital transformation. It should also be noted that the President has ordered newly appointed Department of Health (DOH) Secretary Dr. Ted Herbosa to draft a Covid-19 exit plan, further moving the country away from the clutches of the long pandemic.

With the sustained decrease in inflation, various departments such as the Department of Finance (DOF) and the National Economic and Development Authority (NEDA) are optimistic that inflation could still decline further and settle within the government’s target range of 2 to 4 percent. These agencies have said that his positive outlook “instills confidence and encourages stakeholders to work together in managing inflation and mitigating the impact of rising commodity prices.”

Amid this encouraging news, economic experts have warned that it is still too early to celebrate and to bring our guards down. In fact, they have advised the government to work “double-time” by seizing all the opportunities that it can. Now is the best time to attract more investments, prioritize economic reforms, develop key sectors, and future-proof the country. In short, the decline in inflation should serve as a catalyst for continuous improvement and reform — and bring into the prosperity fold the millions of Filipinos who are still underserved.  After all, what’s the use of economic progress if it only fills the pockets of the usual people?

All this good news, coupled with a survey showing that a majority of Filipinos see better times ahead in the next six months, is “capital” for this administration to utilize in its pursuit of economic growth. Let’s hope that this capital will be used wisely, judiciously, and equitably.

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Credit belongs to : www.mb.com.ph