DAVAO CITY, Philippines — Think tank group IBON Foundation said that the decade-high 5.2 percent annual inflation rate for 2018 points to the failure of the economic managers and neoliberal policies of the Duterte administration, downplaying government’s optimism over slowing growth of inflation in the last months of previous year.
Philippine Statistics Authority (PSA) reported that the inflation last December was at 5.1 percent and the annual inflation rate settled at 5.2 percent in 2018. But still, the figure in full year 2018 inflation was higher compared to 3.2 percent in 2017 and 1.8 percent in 2016 under the current administration.
IBON said that the 5.2 percent inflation recorded for 2018 is more than double of Duterte administration’s original inflation target for the year.
“This is much higher compared to the government’s original annual inflation projection of 2-4% for 2018 and the highest since the 8.2% rate in 2008,” IBON noted.
The group also pointed out that the government already lowered its economic growth target for 2018 from 7-8 percent to 6.5-6.9 percent and the growth rate of the gross domestic product slowed to 6.3% in the first three quarters of the same year compared to 6.7 percent in 2017 and 6.9 percent in 2016.
“Inflation eased last December to 5.1 percent but the poorest half of the population still saw their real income erode by anywhere from Php3,300 to Php7,300 from the high inflation throughout 2018. Rising prices always spell more difficulty for the poor especially amid low or even stagnant incomes,” IBON said.
IBON said the government “should not be too quick to take credit” for the lower year-end inflation, adding the biggest factor easing inflation is rather the falling global oil prices.
IBON also warned that the Duterte administration’s insistence on implementing additional fuel excise taxes under the second tranche of Tax Reform for Acceleration and Inclusion (TRAIN) Law will only add inflationary pressure.
“The economic managers will fallaciously claim that relatively slower inflation in the first few months of 2019 proves that TRAIN and the additional fuel excise taxes are not inflationary,” IBON said. “Such dismissiveness of how TRAIN makes consumer goods and services more expensive however only affirms the government’s insensitivity to the plight of the Filipino people, especially the poor.”
IBON urged the government to repealing the TRAIN Law instead of implementing a progressive tax system.
The group said that this year, poor Filipino families will continue to be burdened by high prices of basic commodities if the government “does not take genuine measures to curb inflation and arrest a faltering economy.” (davaotoday.com)