Philippines' high inflation also good, says Bangko Sentral official
MANILA, Philippines – Despite heavy criticism from various groups and sectors due to high prices of goods, an official of the Bangko Sentral ng Pilipinas (BSP) said the numbers are telling Filipinos something "good."
On the sidelines of a press briefing by the government's economic team on Tuesday, October 16, BSP Monetary Board Member Felipe Medalla told reporters that the country is also experiencing "good inflation," especially the elevated prices of sugary drinks and tobacco.
Inflation hit a fresh 9-year high of 6.7% in September.
Medalla, former socioeconomic planning secretary during the Estrada administration, explained that the high figure also reflects the government's efforts to promote healthy eating and discourage smoking.
The government rolled out the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law this year, which slapped higher taxes on sugary drinks and tobacco.
Medalla also explained that the government was able to catch the tax evasion of Mighty Corporation, which lifted the downward pressure on cigarette prices.
"We cannot say we want to discourage smoking and say we hate inflation in the price of cigarettes," Medalla said.
"We don't want our people to drink too much softdrinks, so our policy was to raise prices," he added.
Basket of goods
Reporters were quick to point out that food and non-alcoholic beverages comprise the biggest chunk of the basket of goods used to compute the inflation rate.
The weight of each commodity making up the consumer price index (CPI) is computed in such a way that it reflects the typical budget of a regular Filipino household.
The Philippine Statistics Authority gave food and non-alcoholic beverages the heaviest weight of over 38%, followed by housing, water, electricity, and gas expenses (22.04%), and restaurant and miscellaneous goods (12.59%).
The alcoholic beverages and tobacco segment is only at 1.58%. Of the figure, tobacco is only 0.93%.
But Medalla went on to explain that while food inflation is "bad" in general, tobacco and alcohol prices rose by 21.8% in September and still affected the inflation figure despite its light weight in the CPI.
While Medalla seemed to welcome the inflation figures which have not been seen by Filipinos in almost a decade, economic managers already backpedaled from their previous comments.
Economic managers recently issued a joint statement, saying they "understand that many are feeling the hit of a faster inflation rate, particularly those who toil so hard just to keep up." They assured the public that they are "working swiftly to temper the rise in the prices of goods."
Budget Secretary Benjamin Diokno previously came under fire for saying that Filipinos must "be less of a crybaby" amid high oil prices.
Socioeconomic Planning Secretary Ernesto Pernia was also criticized for saying that Filipinos should just "tighten their belts" and "live with" soaring inflation.
Finance Secretary Carlos Dominguez III echoed those sentiments, saying that inflation in general was "not a major crisis."
The economic team already crafted various policies to temper inflation. The BSP, for instance, has tightened monetary policy 4 times this year. – Rappler.com