NEDA Predicts Moderation in Food Prices Amid Positive Inflation Outlook

QUEZON CITY — The National Economic and Development Authority (NEDA) forecasts a decrease in food prices and anticipates overall inflation to remain within the government’s target range of 2 to 4 percent for the year, according to statements made by NEDA Secretary Arsenio Balisacan.

According to Philippines News Agency, who spoke at the 51st anniversary of the Development Academy of the Philippines, the easing of headline inflation from 3.9 percent in May to 3.7 percent in June is a positive sign, despite a slight increase in food inflation from 6.1 percent to 6.5 percent. Balisacan expressed optimism, citing the end of the El Niño weather phenomenon and hopes that the incoming La Niña would not cause severe disruptions. “The El Niño is over, hoping that the La Niña will not bring severe flooding and all that. And I think that prices will start to moderate, so I think it will enable us to achieve pa rin ‘yung (still the) target 2 to 4 percent,” he said.

While the situation is improving, Balisacan cautioned that the worst might not yet be over, but he remains hopeful that inflation will continue its downward trend in the coming months. He noted favorable price movements in non-food items last month and stressed the importance of managing potential sharp increases in utility costs.

Meanwhile, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. also commented on the recent inflation data, describing it as “slightly better than expected.” Remolona emphasized that while the trend is reassuring, it is premature to declare a definitive victory over inflation. The BSP’s projections align with the recent data, indicating that the average inflation for 2024 and 2025 is expected to meet the targeted range.

Looking forward, Governor Remolona hinted at possible adjustments in monetary policies, suggesting that the BSP Monetary Board might consider cutting policy rates as early as August this year. This move would align with the BSP’s primary mandate to maintain price stability, which is crucial for sustaining economic growth.