Socioeconomic Planning Secretary Dante Canlas, however, assured that despite the uptick in July inflation, the government will still be able to keep inflation for the whole year within its target of six to seven percent.
Canlas said the inflation rate should start going down to about five percent in the last quarter or September. "We should see a tapering off by then, barring more natural disasters," he said.
"The impact of typhoon Feria will not be very significant, there was no major destruction in rice and corn crops. The impact on inflation will be minimal because the areas affected were limited," Canlas said.
Typhoon ‘Feria’ wrought the heaviest damages on the provinces of Isabela, Cagayan, Baguio and Pangasinan with about P711-million worth of agricultural crops, livestock, fisheries and other crops lost in the typhoon.
Agriculture Secretary Leonardo Montemayor said palay was not as badly affected as corn because most of the palay were either in their land preparation or early stages of vegetation. However, damage to corn was more extensive because standing corn in Isabela and Cagayan were already in their reproduction and maturity.
Canlas added that while prices of fruits and vegetables went up as supply was cut off, these will eventually be mitigated with the entry of imported fruits.
"Importation of fruits and vegetables have long been liberalized and that should tend to keep relative prices of these fruits and vegetables down," Canlas added.
In June, higher fuel and school costs pushed the nationwide inflation rate to 6.7 percent from 6.5 percent in May. This was marginally higher than the market consensus of 6.6 percent.
The National Statistics Office said the average inflation for the six-month period stood at 6.8 percent, which is still well within the government’s forecast range of six to seven percent for the year.
Analysts said that inflation levels for the coming months will most likely go up, especially with the further weakening of the peso.
This will be aggravated, they said, if fuel prices also continue to go up since higher oil prices tend to trigger the rise in prices of other commodities such as rice and other food items such as eggs, meat and dairy products.
In another development, Canlas said government will stand pat on its export growth target of one percent this year despite the slowdown in electronics exports which comprise the biggest chunk of the country’s exports.
Canlas said agriculture exports are growing such as coconut oil, coconut meat, tuna, bananas and other tropical fruits.
At the same time, non-merchandise exports and services, like software services are also expanding and should partly offset the decline in electronics and components, Canlas said. – Rocel Felix