Wage hike seen to exert pressure on inflation

MANILA, Philippines—The increase in minimum wages in five regions outside Metro Manila and the strong inflow of foreign capital are expected to exert upward pressure in consumer prices in the coming months, Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. said.

Paderanga said the wage hikes in Western Visayas, Northern Mindanao, Caraga, and Davao would directly affect inflation, which was recorded at an 11-month low of 2.8 percent year on year in October.

Regional boards set the wage hikes at P15 for Western Visayas, raising minimum daily earnings to a range of P223-P265; P13 for Northern Mindanao workers (P229-P256); P10 for Caraga (P213-P243); and P21 for Davao (P255-P265).

Average inflation in the 10 months to October was set at 4 percent, well within the government’s full-year target range of 3.5 percent to 5.5 percent.

Also, strong capital inflows are beginning to affect inflation in Southeast Asia. But central banks across the region have already started to take action to curb the impact.

“In the Philippines, the Bangko Sentral ng Pilipinas has approved policy amendments … [which will] keep the foreign exchange regulatory framework responsive to current conditions, ensuring the competitiveness of the Philippine peso,” he explained.—Ronnel W. Domingo, Philippine Daily Inquirer