MANILA (Rahnuma) : Philippine inflation jumped to an almost 10-year high in September, data showed Friday, putting pressure on President Rodrigo Duterte to act as the cost of food and fuel hit the country’s poor in the pocket.
Consumer prices have risen every month this year, with food surging further after Typhoon Mangkhut, the world’s most powerful storm in 2018, smashed into the country’s northern agricultural heartland in mid-September.
Increases have been powered by a collision of factors including Duterte’s massive spending on a broad infrastructure building effort, climbing oil prices and weak farm output.
Consumer price increases accelerated to 6.7 percent, from 6.4 percent in August, in the steepest climb since February 2009, the Philippine Statistics Authority said.
“We… understand that many are feeling the hit of a faster inflation rate, particularly those who toil so hard just to keep up,” Duterte’s economics team said.
The tens of millions who get by on less than $2 per day in the Philippines have been especially hard hit by the increase.
The government has boosted imports of rice, the national cereal staple, following shortages but authorities acknowledged Friday that grain prices remain “elevated” due to the typhoon.
Analyst Astro del Castillo told AFP the problem “will not be solved overnight” because some factors are beyond the government’s control, such as oil prices. Global crude prices are sitting at a four-year high around $85 and there are warnings it they could break $100.
However, del Castillo said the people expect the president to do something about it.
“You’ve seen the (opinion) surveys. The people would like inflation to be the government’s top priority,” he added.
The Philippine central bank last month jacked up key rates for the fourth time this year, while also raising its inflation targets for this year and next.
Passage of a law lifting import quotas on rice and extra imports of other food items “could lead to an earlier return of inflation to within the target range in 2019,” it added.
Analysts believe the pain may not be over yet, with interest rates expected to climb another full point in the next six months.
The Philippine peso has been hovering at 13-year lows, closing at 54.32 to the US dollar on Thursday — making imports more expensive — while the stock market has plunged about 17 percent since December, making it one of the world’s worst performers.
WASHINGTON: The US trade deficit increased to a six-month high in August as exports dropped further amid declining soybean shipments and imports hit a record high, suggesting that trade could weigh on economic growth in the third quarter.
The Commerce Department said on Friday the trade gap increased 6.4 percent to $53.2 billion, widening for a third straight month. Data for July was revised to show the trade deficit rising to $50.0 billion, instead of the previously reported $50.1 billion.
The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of $38.6 billion.
Economists polled by Reuters had forecast the overall trade deficit swelling to $53.5 billion in August.
The trade gap continues to widen despite the Trump administration’s “America First” policies, which have led to a bitter trade war between the United States and China.
Washington has also engaged in tit-for-tat import duties with the European Union, Canada and Mexico. The United States has since struck a trade deal with Canada and Mexico.
The Trump administration says eliminating the trade deficit will put the economy on a sustainable path of faster growth, an argument that has been dismissed by many economists as flawed given constraints such as low productivity and slow population growth.
When adjusted for inflation, the trade gap widened to $86.3 billion in August, the highest since January 2006, from $82.4 billion in July. The jump in the so-called real trade deficit suggests that trade could subtract as much as one percentage point from gross domestic product in the third quarter.
Trade contributed 1.2 percentage points to the economy’s 4.2 percent annualized growth pace in the second quarter, mostly reflecting a front-loading of soybean exports to China before Beijing’s retaliatory tariffs came into effect in early July.
Exports of goods and services fell 0.8 percent to $209.4 billion in August. Soybean exports dropped $1.0 billion and shipments of crude oil fell $0.9 billion.
Imports of goods and services increased 0.6 percent to a record $262.7 billion in August. They were boosted by imports of motor vehicles, which were the highest on record, and cellphones. There were also increases in petroleum imports.