The government just hit its slower inflation target in February, declaring a 3.8% inflation rate. For the past four consecutive months includes November and December last year, the rate of inflation has been decelerating. This can be seen as a make-up for the 6.7% rate last September and October that shook everyone in the country. According to the statement dropped by the presidential spokesperson Salvador Panelo, the government is expecting for more improvement and disinflation in the coming months.
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Since the inflation rate last February is lower than the last couple of months, this means prices of goods today are more modulated than last year. Based on the report, the decrease in inflation rate is propelled by food, alcoholic and non-alcoholic drinks, tobacco, and transportation. This has been the slowest increase in goods prices in a whole year and this time was the first success of the government to hit a 2-4% inflation rate target after 1 year.
Last 2018, the Philippine economy has experience an inflation rate that was higher than the normal percentage. This was the time when the chili almost hit a thousand per kilo. One of the causes the government and economists consider was the Tax Reform for Acceleration and Inclusion or the TRAIN Law that was implemented during the same year. And since the administration has been exerting extra effort to address this issue on the rising prices, the inflation rate was predicted to slow down. The slowed inflation this February was welcomed by Malacanang as the “predicted” inflation drop and a positive development towards further disinflation.
One of the great benefits of lower inflation is the lower prices of goods and services. This is beneficial for Philippine economy as consumers will be encouraged to purchase goods and services. This is also a good time to borrow money because of lower interest rates at time like this. To maintain the economic benefits and stabilize the economy’s movement, government usually limit the inflation rate between 2-4%.