HEADLINE INFLATION is unlikely to have further accelerated in March, as the proposed legislated wage hike got stalled in Congress, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said on Thursday.
“I don’t think that it will go higher than what we had last month, especially that this push for legislated wages did not appear to be gaining ground,” he said at a press briefing.
Inflation accelerated to 3.4% in February from 2.8% in January, but slower than 8.6% a year ago.
It was the first time in five months that the consumer price index (CPI) quickened amid rising prices of food, particularly rice.
Asked if March inflation could go beyond the target, Mr. Balisacan said: “No. Our target is really within that band 2-4% (in) March and throughout the year.”
However, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. on Wednesday said inflation might have quickened to 3.9% in March due to positive base effects.
“(March inflation) would be close to 4%. I think 3.9%, but we’ll see,” he said.
It could mark the second straight month that inflation accelerated. March inflation data report will be released on April 5.
Mr. Balisacan said the government is wary of legislated wage increases due to their impact on inflation, employment and economic growth.
“It will have a really negative impact on inflation, even on employment and overall growth,” he said in Filipino.
The NEDA chief reiterated that wage hike proposals should be decided by the Regional Tripartite Wages and Productivity Board.
The House Committee on Labor and Employment is still conducting hearings on bills that seek to increase daily wages from P150 to P750.
The Senate last month approved on third and final reading a bill proposing to increase daily minimum wages of private sector workers by P100.
“I think Mr. Balisacan was indicating that inflation could have [been] much higher if the legislated wage bill had progressed,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat.
“Relative to what could have been the inflation if this bill had passed, the actual inflation is lower,” he added.
Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said inflation likely picked up in March.
“The probability of March inflation to be slower is smaller than CPI coming in higher this month,” he said in a Viber message. “We see base effects and the impact of higher rice prices including the agriculture production impact of El Niño putting upside pressure on March inflation.”
The Agriculture department earlier this week said the damage to the agricultural sector caused by El Niño had reached P1.75 billion. It covered 32,231 hectares of farmlands in eight regions, with about 30,000 affected farmers. — B.M.D.Cruz
