SEPTEMBER 5, 2024 – The continued easing of inflation and stable prices will significantly benefit households and businesses, promoting increased consumer spending and stimulating economic activity, said the National Economic and Development Authority (NEDA).

The Philippine Statistics Authority reported today, September 5, that August 2024 inflation has further slowed to 3.3 percent, down from 4.4 percent in July 2024. This decline brings the average inflation rate to 3.6 percent, comfortably within the government’s target range of 2.0 to 4.0 percent.

This trend is consistent with other ASEAN countries, which have also managed their inflation rates within their target ranges: Indonesia at 2.6 percent (with a target of 1.5 to 3.5 percent) and Vietnam at 4.4 percent (within a target range of 4.0 to 4.5 percent).

The slowdown in inflation was primarily driven by a decrease in food inflation, which fell to 4.2 percent from 6.7 percent the previous month. This reduction is largely attributed to a significant decline in rice inflation, which decreased to 14.7 percent from 20.9 percent in the prior month.

“The sustained easing of inflation will support growth in household consumption, which elevated prices have long suppressed. Low-income households will benefit from the decline in food inflation, as food constitutes more than half (51.4 percent) of the consumption of the bottom 30 percent of households,” NEDA Secretary Arsenio M. Balisacan said.

“Moreover, as businesses have identified persistent inflationary pressure as a significant concern, the recent stability and moderation in inflation will encourage investments, especially as borrowing costs are declining. Most importantly, the appetite for business expansion will improve as consumer spending increases,” the government’s chief economic planner added.

Balisacan also said that while inflation continues to trend downward, primarily due to reduced import tariffs on rice, potential pressures could emerge from higher electricity rates and above-normal weather disturbances.

“The government is prepared to address these pressures to ensure stable inflation. Preparations to counter the effects of the La Niña phenomenon are underway, including improvements in early warning systems, the utilization of communication systems to issue warnings about dam openings, measures to address the potential accelerated speed of livestock diseases, and greater involvement of local government units in information dissemination, are in progress. Notably, the government has allocated P15 billion for national risk reduction in 2024,” Balisacan explained.

Meanwhile, the Department of Agriculture (DA) will expand the KADIWA ng Pangulo program in the Visayas and Mindanao to enhance access to affordable agricultural products. The DA  is also collaborating with various food manufacturers to supply KADIWA stores with essential goods, including canned sardines, cooking oil, condiments, fresh fish, and poultry.

To promote greater reliability and more affordable electricity, the Energy Regulatory Commission is urged to expedite the full implementation of the lower retail competition and open access threshold. The ERC is considering reducing the threshold from 500 kW to 100 kW, which would enable more electricity end-users to participate in the program.

“The government will continue to implement measures to reduce further inflationary pressures, including enhancing agricultural productivity, expanding logistics infrastructure, and ensuring the efficient delivery of social services. These efforts are crucial not only for stabilizing prices but also for ensuring that economic growth translates into tangible improvements in the lives of all Filipinos,” Balisacan concluded.

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