Rising prices at the pump help drive inflation spike in Philippines

Inflation in the Philippines rose to 6.1 percent in June – nearly double the figure from the same month last year – with an overall increase in fuel costs helping to drive up prices for basic commodities, the government said Tuesday. 

The transportation sector contributed heavily to the surging prices as prices at the pump swelled by 17.1 percent – up from 14.6 percent in May – according to Philippine Statistics Authority (PSA). Gasoline and diesel prices worldwide have risen as a ripple effect of Russia’s invasion of Ukraine.

In the Philippines, the price shock is deeply affecting drivers of Metro Manila’s ubiquitous jeepneys.

“Before the fuel price hikes, I could easily earn about 2,000 pesos on a good day,” Kevin Estrada, 30, who drives a commuter jeepney in central Manila, told BenarNews.

“I wonder if Filipinos can really get out of this crisis. Only the haves are saying that life is getting better, but for us, the poor, it’s always the same.”

Meanwhile, Ferdinand Marcos Jr., the country’s new president, questioned the PSA report.

“Of course the inflation rate is a problem, not only in the Philippines, but everywhere,” Marcos told reporters on Tuesday.

Despite that acknowledgment, “I think that I will have to disagree with that number. We are not that high.”

Marcos delivered the comments during his first official press conference as president after emerging from his first cabinet meeting.

He discussed the economy with members of his cabinet and stressed that his administration’s policy essentially is to use interest rates to hold down inflation.

“We are not specifically looking at the exchange rate now. What we are targeting is the inflation rate. So that’s what we are doing,” he said.

“The increase in the commodity prices are again something that happens (when) the forces push prices up beyond our control.”

The 6.1 percent figure for June – up from 3.7 percent for the same month in 2021 – was within the central bank’s forecast inflation rate of between 5.7 percent and 6.5 percent, according to the PSA. The average rate of inflation for the first six months of 2022 is 4.4 percent.

Earlier this year, the Asian Development Bank projected that the Philippines’ economy would recover strongly in 2022 despite concerns about geopolitical tensions, as loosened pandemic restrictions should propel local consumption.

Specifically, the growth is expected at 6 percent this year, one of the highest rates in Southeast Asia, and is forecast to rise by another 6.3 percent next year.