Inflation remains top priority – Diokno

MANILA, Philippines — The head of the economic team of the Marcos administration said that the government would continue to consider inflation as a pressing concern, both in the immediate and long-term, despite the significant easing of inflation to a six-month low in March.

Finance Secretary Benjamin Diokno said the 7.6 percent inflation print last month is a welcome development as price pressures have moderated, noting that the government aims to sustain such downtrend.

“We remain focused on treating inflation as an immediate and long-term concern. We continue to monitor domestic and external developments to make sure that inflation remains on its downward path and that it eventually falls within the target range,” he said.

The 7.6 percent March inflation settled near the lower end of the central bank’s 7.4 to 8.2 percent forecast. It was also below the 8.1 percent market consensus.

The latest figure moderated from the 8.6 percent in February on lower contributions to inflation from food, transport, utilities and fuel-related items.

Diokno said that this is in part a reflection of the impact of previous monetary policy adjustments as well as on-going direct measures to address disruptions in supply of key commodities.

“On the fiscal side, we are resolute to intensify the timely implementation of direct measures to curb persistent inflation and mitigate its impact on the most vulnerable sectors,” Diokno said.

“Economic managers will continue to be vigilant and will enhance their ability to assess price pressures to support the deployment of timely and targeted anti-inflation measures,” he said.

The finance chief maintained that the latest inflation is also supportive of the view that monetary authorities have done enough to tame inflation.

Key policy rates have so far been raised by 425 basis points, bringing the rate to 6.25 percent, the highest in 16 years.

Diokno said the central bank already has the room for a possible rate hike pause by May.

“Note that monetary policy works with a lag. The focus now should be on the supply side of the equation, of which the national government authorities play a bigger role,” he said.

For one, Diokno said the Interagency Committee on Inflation and Market Outlook is looking to streamline data-gathering tools for the conduct of timely analysis in mitigating inflation.

It is also working closely with various government agencies to utilize novel advances in science and technology such as remote sensing, space technology and data science applications.

The committee is likewise in charge of monitoring the main drivers of inflation, assessing the supply and demand of essential food commodities, monitoring external and internal shocks, facilitating data-sharing among concerned agencies, and providing timely recommendations to the President to curb price spikes.