MANILA - To curb inflation, the Philippines needs to reduce transport costs and raise local food production, one of the country’s economic managers said on Tuesday.

A day after President Ferdinand Marcos Jr.touted the government’s gains in fighting inflation, the head of the National Economic and Development Authority admitted that the prices of many goods remain high.

Marcos mentioned in his second SONA that the biggest challenge of his administration has been inflation which hit a 14-year high of 8.7 percent earlier this year.

At the Post-SONA Philippine Economic Briefing, NEDA Secretary Arsenio Balisacan said that while inflation has slowed to 5.4 percent in June, the government needs to do more to bring inflation within the target range of 2 to 4 percent.

“We need to focus on raising productivity, that’s both short term and long term. We need to focus on the logistics. We need to focus on markets and the information that is available in making decisions about availability and adequacy of food supply,” Balisacan said.

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Philippine Chamber of Commerce and Industry President George Barcelon also said that logistics remains a major problem.

“The area of concern for us also is in logistics cost. There’s a study by the World Bank [that the] Philippines has one of the highest logistics costs,” Barcelon said.

“We need to have the local government looped in, to find ways to reduce those costs,” he added.

Inflation is expected to average 5.4 percent in 2023 before easing to 2.9 percent in 2024, according to Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila.

He said the projected return of inflation to within target range has given the BSP some room for “prudent pause” in interest rate hikes. The BSP kept the country’s benchmark policy rate, used by banks to price loans, at 6.25 percent.

But Dakila said the central bank remains “watchful and ready” to take action if needed.

“The BSP remains watchful and remains ready to resume monetary actions as warranted by the data on the inflation outlook and domestic demand prospects,” he said.

Inflation is going down but there is still a need for stronger decline in other segments, Economist Victor Abola told ANC.

“Inflation is actually going down quite fast–that's lower prices in terms of meat and vegetables, fruits. But we still have to see a stronger decline in fish products because there's still a lot of issues there,” he said.

For SM Investments Corporation Vice Chairman Tessie Sy-Coson, the issue of inflation is influenced by external factors. She said fighting inflation is a collective effort.

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