Despite easing inflation, high transport costs hurting poor more

by Ben O. de Vera, Philippine Daily Inquirer, 6 Oct 2020

Headline inflation eased to a four-month low of 2.3 percent year-on-year in September but the lack of public transportation, especially in Metro Manila, pushed transport costs to a 22-month high, hurting poor households the most.

National Statistician Claire Dennis S. Mapa told a press conference Tuesday that soft food prices augured well to last month’s lower rate of increase in prices of basic commodities, which brought the end-September average to 2.5 percent, well-within the government’s 2-4 percent target range.

For the remaining months of the year, inflation would likely remain in the 2.4-2.5 percent band, Mapa said.

Vegetables and rice prices posted deflation or declined year-on-year by 2.7 percent and 0.6 percent, respectively, the latest Philippine Statistics Authority (PSA) data showed.

In the case of rice, last month’s deflation was the 17th-straight month that retail prices of the Filipino staple food dropped compared to a year ago levels.

However, rice prices in Metro Manila inched up for a second straight month, posting 1.6-percent inflation last September, even as prices in areas outside the National Capital Region remained lower year-on-year.

Mapa said the rising rice prices in the NCR could be attributed to higher transport and delivery costs, which surged last month.

Transport inflation in September climbed to 8.3 percent year-on-year – the highest since November 2018’s 8.9 percent, when global oil prices hit record highs, Mapa noted.

In NCR, transport costs jumped by a faster 11.5 percent year-on-year, while prices outside NCR also rose by 7.3 percent.

Last month, tricycle fare soared by 45.7 percent year-on-year; jeepney fare, up 5.3 percent; and bus fare, up 4.5 percent.

Mapa said tricycle fare had become more expensive, averaging P18.60 per person in September from only P8.50 a year ago amid social distancing restrictions as well as lack of other mass transport options.

The climb in transport fare impacted the bottom 30-percent households more, whose consumer price index (CPI) inflation rate was a higher 2.8 percent year-on-year last September.

In particular, transport inflation among the poor jumped 16.3 percent year-on-year last month, PSA data showed.

Since April – when most parts of the country were placed under the longest and most stringent COVID-19 lockdown in the region, inflation among the poor outpaced national headline inflation.

Poor households bore the bigger burden when food prices inched up at the start of quarantine due to supply constraints, and they were also suffering more from higher transportation fares now, Mapa noted.

The faster transport inflation meant that the larger amount that the poor shell out to travel to work carves more out of their earnings which they could spend on other goods and services, such as food as well as utilities.

If the physical distancing requirements extend until yearend, commuters should expect these prevailing high transport costs to remain, Mapa said. [ac]